As Filed with the Securities and Exchange Commission on September 14, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C>
Liberty Financial Companies, Inc. Liberty Financial Capital Trust I
Liberty Financial Capital Trust II
(Exact name of registrant as (Exact name of each registrant as
specified in its charter) specified in its Trust Agreement)
Massachusetts Delaware
(State or other jurisdiction of (State of other jurisdiction of Incorporation
incorporation or organization) or organization of each registrant)
04-3260640 Each to be Applied for
(I.R.S. Employer (I.R.S. Employer
Identification Number) Identification No.)
600 Atlantic Avenue c/o Liberty Financial Companies, Inc.
Boston, Massachusetts 02210-2214 600 Atlantic Avenue
(617) 722-6000 Boston, Massachusetts 02210-2214
(Address, including zip code, (617) 722-6000
and telephone number, including (Address, including zip code, and
area code, of registrant's telephone number, including area code, of
principal executive offices) each registrant's principal executive offices)
</TABLE>
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JOHN A. BENNING, ESQ.
Senior Vice President and General Counsel
Liberty Financial Companies, Inc.
600 Atlantic Avenue
Boston, Massachusetts 02210-2214
(617) 722-6000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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With copies to:
WILLIAM P. GELNAW, JR., ESQ. MICHAEL A. KING, ESQ.
JAMES W. HACKETT, JR., ESQ. Brown & Wood LLP
Choate, Hall & Stewart One World Trade Center
53 State Street New York, New York 10048
Boston, Massachusetts 02109 (212) 839-5300
(617) 248-4000
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<PAGE>
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is to be a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
registration statement of the earlier effective registration statement for the
same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [X]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================
Proposed Proposed
Maximum Maximum
Offering Price Aggregate
Title of Each Class of Amount to be Per Unit Offering Price Amount of
Securities to be Registered Registered(1) (1)(2)(3) (1)(2)(3) Registration Fee(2)
--------------------------- ------------- ----------- ----------- -------------------
<S> <C> <C> <C> <C>
Securities of Liberty Financial
Companies, Inc.:
Debt Securities......................
Preferred Stock, $.01 par value(4)...
Common Stock, $.01 par value.........
Warrants.............................
Stock Purchase Contracts.............
Stock Purchase Units.................
Preferred Securities of Liberty
Financial Capital Trust I...............
Preferred Securities of Liberty
Financial Capital Trust II..............
Guarantees of Preferred Securities
of Liberty Financial Capital Trust I and
Liberty Financial Capital Trust II by
Liberty Financial Companies, Inc.(5) ...
Total................................ $800,000,000 $236,000
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</TABLE>
<PAGE>
(1) Such indeterminate number or amount of Debt Securities, Preferred Stock,
Common Stock, Warrants, Stock Purchase Contracts and Stock Purchase Units
of Liberty Financial Companies, Inc. and Preferred Securities of Liberty
Financial Capital Trust I and Liberty Financial Capital Trust II as may
from time to time be issued at indeterminate prices. Junior Subordinated
Debt Securities may be issued and sold to Liberty Financial Capital Trust I
and Liberty Financial Capital Trust II in which event such Junior
Subordinated Debt Securities may later be distributed to the holders of
Preferred Securities upon a dissolution of Liberty Financial Capital Trust
I and Liberty Financial Capital Trust II and the distribution of the assets
thereof.
(2) Such amount in U.S. dollars or the equivalent thereof in foreign currencies
as shall result in an aggregate initial offering price for all securities
of $800,000,000. In addition, this Registration Statement includes such
presently indeterminate number of Offered Securities (as defined herein) as
may be issuable from time to time upon conversion or exchange of the
Offered Securities being registered hereunder.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended
("Securities Act"), and exclusive of accrued interest and dividends, if
any.
(4) The Preferred Stock may include Common Stock Purchase Rights which, prior
to the occurrence of certain events, would not be exercisable or evidenced
separately from the Preferred Stock.
(5) Liberty Financial Companies, Inc. is also registering under this
registration statement all other obligations that it may have with respect
to Preferred Securities issued by Liberty Financial Capital Trust I and
Liberty Financial Capital Trust II. No separate consideration will be
received for any Guarantee or any other such obligations.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 14, 1998
P R O S P E C T U S
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LIBERTY FINANCIAL COMPANIES, INC.
LIBERTY FINANCIAL CAPITAL TRUST I
LIBERTY FINANCIAL CAPITAL TRUST II
By this prospectus, we may offer up to $800,000,000 of our:
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
PREFERRED SECURITIES OF LIBERTY FINANCIAL CAPITAL TRUST I
PREFERRED SECURITIES OF LIBERTY FINANCIAL CAPITAL TRUST II
Liberty Financial Companies, Inc. is a Massachusetts corporation.
Liberty Financial Capital Trust I and Liberty Financial Capital Trust II are
both Delaware business trusts. We are the sponsor of the Liberty Financial
Trusts.
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 will provide the specific terms of these securities in supplements
to this prospectus. You should read this prospectus and the supplements
carefully before you invest.
We may offer the securities directly or through underwriters, agents or
dealers. The supplement will describe the terms of that plan of distribution.
"Plan of Distribution" contained in this prospectus also provides more
information on this topic.
The date of this prospectus is _____________ __, 1998.
<PAGE>
Certain persons participating in this offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities covered by
this prospectus. Those transactions include over-allotment, stabilizing
transactions, short covering transactions and penalty bids. For a description of
those activities, see "Plan of Distribution" in this prospectus. If begun, they
may discontinue those activities at any time.
WHERE YOU CAN FIND MORE INFORMATION
Liberty Financial Companies, Inc. files annual, quarterly and current
reports, proxy and information statements and other information with the SEC.
You may read and copy any document we file at the SEC's public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0330 for more information on the public reference rooms and
their copy charges. Our SEC filings are also available to the public from the
SEC's web site at http://www.sec.gov. You may also inspect our SEC reports and
other information at the National Association of Securities Dealers, Inc.,
Reports Section, 1735 K Street N.W., Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" the information we file
with them, which means we can disclose information to you by referring you to
those documents. Information incorporated by reference is part of this
prospectus. Later information filed with the SEC updates and supersedes this
prospectus.
We incorporate by reference the documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering is completed, or subsequent
to the date of the initial Registration Statement and prior to effectiveness of
the Registration Statement:
o Annual Report on Form 10-K of the Company for the year ended
December 31, 1997.
o Portions of the Proxy Statement on Schedule 14A for the Company's
Annual meeting of Shareholders held on May 11, 1998 that have been
incorporated by reference into our 10-K.
o Quarterly Reports on Form 10-Q of the Company for the quarters
ended March 31 and June 30, 1998.
These filings include important business and financial information
which we are not delivering to you. You may request a copy of those filings,
other than exhibits, at no cost, by contacting us at:
Investor Relations
Liberty Financial Companies, Inc.
600 Atlantic Avenue
Boston, Massachusetts 02210-2214
(617) 722-6000
<PAGE>
CERTAIN INFORMATION REGARDING THE OFFERING
Liberty Financial Companies, Inc., a Massachusetts corporation (the
"Company" or "Liberty Financial"), may offer and sell from time to time (i) its
unsecured senior debt securities ("Senior Debt Securities") and its unsecured
junior subordinated debt securities (the "Junior Subordinated Debt Securities"),
consisting of debentures, notes and/or other evidences of indebtedness (the
"Debt Securities"), (ii) shares of its preferred stock, $.01 par value per share
(the "Preferred Stock"), which may be represented by depositary shares as
described herein, (iii) shares of its common stock, $.01 par value per share
(the "Common Stock"), (iv) warrants to purchase any of the foregoing Debt
Securities, Preferred Stock and Common Stock (the "Warrants"), (v) stock
purchase contracts ("Stock Purchase Contracts") to purchase shares of Common
Stock or (vi) stock purchase units ("Stock Purchase Units"), each representing
ownership of a Stock Purchase Contract and any of (x) Debt Securities, (y) debt
obligations of third parties, including U.S. Treasury Securities, or (z)
Preferred Securities (as defined below) of a Liberty Financial Trust (as defined
below), securing the holder's obligation to purchase Common Stock under the
Stock Purchase Contract. Such securities may be offered in one or more separate
classes or series, in amounts, at prices and on terms to be determined by market
conditions at the time of sale and to be set forth in a supplement or
supplements to this Prospectus (a "Prospectus Supplement"). Such securities may
be sold for U.S. dollars, foreign denominated currency or currency units;
amounts payable with respect to any such securities may likewise be payable in
U.S. dollars, foreign denominated currency or currency units, in each case as
the Company specifically designates.
Liberty Financial Capital Trust I and Liberty Financial Capital Trust
II, each a statutory business trust formed under the laws of the State of
Delaware (each a "Liberty Financial Trust" and collectively, the "Liberty
Financial Trusts"), may offer, from time to time, preferred securities (the
"Preferred Securities") representing preferred undivided beneficial interests in
such Liberty Financial Trust. The Company will be the owner of the common
securities (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities") of each Liberty Financial Trust. The payment of periodic
cash distributions ("Distributions") with respect to Preferred Securities of
each of the Liberty Financial Trusts out of monies held by the Property Trustee
(as defined herein) of each of the Liberty Financial Trusts and payments on
liquidation of each Liberty Financial Trust and on redemption of Preferred
Securities of such Liberty Financial Trust, will be guaranteed by the Company as
and to the extent described herein (each, a "Guarantee"). See "Description of
Guarantees." The Company's obligation under each Guarantee is an unsecured
obligation of the Company and will rank subordinate and junior in right of
payment to all Senior Debt (as defined herein) of the Company and pari passu
with its obligations under the senior most preferred or preference stock of the
Company. Except as otherwise provided in the applicable Prospectus Supplement,
(i) concurrently with the issuance by a Liberty Financial Trust of its Preferred
Securities, such Liberty Financial Trust will invest the proceeds thereof and
any contributions made in respect of the Common Securities in a corresponding
series of the Company's Junior Subordinated Debt Securities (the "Corresponding
Junior Subordinated Debt Securities") with terms directly corresponding to the
terms of that Liberty Financial Trust's Preferred Securities (the "Related
Preferred Securities"), (ii) the Corresponding Junior Subordinated Debt
Securities will be the sole assets of each Liberty Financial Trust and (iii)
payments under the Corresponding Junior Subordinated Debt Securities and the
related Expense Agreement (as defined herein) will be the only revenue of each
Liberty Financial Trust. The Company may redeem the Corresponding Junior
Subordinated Debt Securities (and cause the redemption of the Trust Securities)
or may terminate each Liberty Financial Trust and cause the Corresponding Junior
Subordinated Debt Securities to be distributed to the holders of Preferred
Securities in liquidation of their interests in such Issuer in certain
circumstances. See "Description of Preferred Securities -- Liquidation
Distribution Upon Termination."
1
<PAGE>
Specific terms of the particular Debt Securities, Preferred Stock,
Common Stock, Warrants, Stock Purchase Contracts, Stock Purchase Units,
Preferred Securities and the related Guarantee, in respect of which this
Prospectus is being delivered (the "Offered Securities") will be set forth in an
accompanying Prospectus Supplement or Supplements, together with the terms of
the offering of the Offered Securities, the initial price thereof and the net
proceeds from the sale thereof. The Prospectus Supplement will set forth with
regard to the particular Offered Securities, certain terms thereof, including,
where applicable, (i) in the case of Debt Securities, the ranking as senior or
junior subordinated Debt Securities, the specific designation, aggregate
principal amount, purchase price, maturity, interest rate (which may be fixed or
variable), if any, the term and method of calculating interest payments, if any,
the right of the Company, if any, to defer payments of interest on the Junior
Subordinated Debt Securities and the maximum length of such deferred period,
time of payment of interest, if any, listing, if any, on a securities exchange,
authorized denomination, any exchangeability, conversion, redemption, prepayment
or sinking fund provisions, the currency or currencies or currency unit or units
in which principal, premium, if any, or interest, if any, is payable, public
offering price and any other specific terms of the Debt Securities; (ii) in the
case of Preferred Stock, the specific designation, number of shares, purchase
price and the rights, preferences and privileges thereof and any qualifications
or restrictions thereon (including dividends, liquidation value, voting rights,
terms for the redemption, conversion or exchange thereof and any other specific
terms of the Preferred Stock), listing, if any, on a securities exchange and
whether the Company has elected to offer the Preferred Stock in the form of
depositary shares; (iii) in the case of Common Stock, the number of shares
offered, the initial offering price, market price and dividend information; (iv)
in the case of Warrants, the specific designation, the number, purchase price
and terms thereof, any listing of the Warrants or the underlying securities on a
securities exchange or any other terms in connection with the offering, sale and
exercise of the Warrants, as well as the terms on which and the securities for
which such Warrants may be exercised; (v) in the case of Stock Purchase
Contracts, the designation and number of shares of Common Stock issuable
thereunder, the purchase price of the Common Stock, the date or dates on which
the Common Stock is required to be purchased by the holders of the Stock
Purchase Contracts, any periodic payments required to be made by the Company to
the holders of the Stock Purchase Contracts or vice versa, and the terms of the
offering and sale thereof; (vi) in the case of Stock Purchase Units, the
specific terms of the Stock Purchase Contracts and any Debt Securities or debt
obligations of the third parties or Preferred Securities of a Liberty Financial
Trust securing the holders' obligation to purchase the Common Stock under the
Stock Purchase Contracts, the ability of a holder of such Stock Purchase Units
to settle early the underlying Stock Purchase Contract by delivering cash in
exchange for the underlying collateral and, if applicable, whether the Company
will issue to such holder a Prepaid Stock Purchase Contract as a result of such
early settlement and the specific terms of the Prepaid Stock Purchase Contract
and the terms of the offering and sale of such Stock Purchase Units; and (vii)
in the case of Preferred Securities of a Liberty Financial Trust, the specific
designation, number of securities, liquidation amount per security, initial
public offering price, and any listing on a securities exchange, distribution
rate (or method of calculation thereof), dates on which distributions shall be
payable and dates from which distributions shall accrue, voting rights, if any,
terms for any conversion or exchange into other securities, any redemption or
sinking fund provisions, any other rights, preferences, privileges, limitations
or restrictions relating to the Preferred Securities and the terms upon which
the proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Junior Subordinated Debt Securities of the Company.
The Offered Securities may be offered in amounts, at prices and on
terms to be determined at the time of offering; provided, however, that the
aggregate offering price to the public of the Offered Securities will be limited
to $800 million. Any Prospectus Supplement relating to any Offered
2
<PAGE>
Securities will contain information concerning certain United States federal
income tax considerations, if applicable, to the Offered Securities.
The Company and/or each Liberty Financial Trust may sell the Offered
Securities directly, through agents designated from time to time or through
underwriters or dealers. See "Plan of Distribution." If any agents of the
Company and/or any Liberty Financial Trust or any underwriters or dealers are
involved in the sale of the Offered Securities, the names of such agents,
underwriters or dealers and any applicable commissions and discounts will be set
forth in the related Prospectus Supplement. The managing underwriter or
underwriters with respect to each series sold to or through underwriters will be
named in the accompanying Prospectus Supplement. See "Plan of Distribution" for
possible indemnification arrangements for dealers, underwriters and agents.
A majority of Liberty Financial's issued and outstanding shares of
Common Stock and of the combined voting power of Liberty Financial's voting
stock is indirectly owned by Liberty Mutual Insurance Company ("Liberty
Mutual").
Liberty Financial has insurance subsidiaries organized under the laws
of the State of Rhode Island. Rhode Island law prohibits any person from
directly or indirectly acquiring control of any domestic insurer unless such
person has provided certain required information to the state insurance
commission and such acquisition of control has been approved by the state's
insurance commissioner. Under these insurance laws, any person acquiring 10% or
more of the outstanding voting stock of a corporation is presumed to have
acquired control of that corporation and its subsidiaries. Consequently, no
person may acquire, directly or indirectly, 10% or more of the voting stock or
voting power of the Company outstanding unless such person has provided such
required information to the Rhode Island Insurance Commission and such
acquisition is approved by the insurance commissioner of such state.
Liberty Financial's Restated Articles of Organization (the "Restated
Articles") include provisions limiting the voting power of shares of the
Company's Voting Stock (as defined in the Restated Articles) held by holders of
20% or more of such Voting Stock (other than Liberty Mutual and its subsidiaries
and its affiliates) in certain circumstances. These provisions are designed to
prevent, under certain circumstances, a deemed assignment under the Investment
Advisers Act of 1940 or the Investment Company Act of 1940 of investment
advisory contracts to which certain of the Company's subsidiaries are or may
become parties. See "DESCRIPTION OF CAPITAL STOCK."
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, AND, WITH RESPECT TO PARTICULAR OFFERED SECURITIES, THE PROSPECTUS
SUPPLEMENT RELATING THERETO, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS
PROSPECTUS NOR SUCH PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER FOR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS OR SUCH PROSPECTUS SUPPLEMENT
NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR ANY LIBERTY FINANCIAL
TRUST SINCE THE DATE HEREOF OR THAT INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO ITS DATE.
FOR NORTH CAROLINA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF
THIS PROSPECTUS.
3
<PAGE>
LIBERTY FINANCIAL COMPANIES, INC.
Liberty Financial is a leading asset accumulation and management
company. The Company has two core product lines--retirement-oriented insurance
products and investment management products. Retirement-oriented insurance
products consist substantially of annuities. Investment management products
consist of mutual funds, wealth management and institutional asset management.
The Company sells its products through multiple distribution channels, including
brokerage firms, banks and other depository institutions, financial planners and
insurance agents, as well as directly to investors.
Liberty Financial's principal executive offices are located at 600
Atlantic Avenue, Boston, Massachusetts 02210-2214. Its telephone number is (617)
722-6000.
THE LIBERTY FINANCIAL TRUSTS
Each Liberty Financial Trust is a statutory business trust formed under
Delaware law pursuant to (i) a trust agreement executed by the Company, as
sponsor of the Liberty Financial Trust, and the Delaware Trustee (as defined
herein) of such Liberty Financial Trust and (ii) the filing of a certificate of
trust with the Delaware Secretary of State. Each trust agreement will be amended
and restated in its entirety (each, as so amended and restated, a "Trust
Agreement") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Each Trust Agreement will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Each Liberty Financial Trust exists for the exclusive
purposes of (i) issuing and selling its Trust Securities, (ii) using the
proceeds from the sale of such Trust Securities to acquire a series of
Corresponding Junior Subordinated Debt Securities issued by the Company, and
(iii) engaging in only those other activities necessary, convenient or
incidental thereto.
All of the Common Securities of each Liberty Financial Trust will be
owned, directly or indirectly, by the Company. The Common Securities of a
Liberty Financial Trust will rank pari passu, and payments will be made thereon
pro rata, with the Preferred Securities of such Liberty Financial Trust, except
that upon the occurrence and continuance of an event of default under a Trust
Agreement resulting from a Junior Subordinated Debt Security Event of Default
(as defined herein), the rights of the Company as holder of the Common
Securities to payment in respect to Distributions and payments upon liquidation,
redemption or otherwise will be subordinated to the rights of the holders of the
Preferred Securities of such Liberty Financial Trust. See "Description of
Preferred Securities -- Subordination of Common Securities." The Company will
acquire Common Securities in an aggregate liquidation amount equal to not less
than 3% of the total capital of each Liberty Financial Trust.
Unless otherwise specified in the applicable Prospectus Supplement,
each Liberty Financial Trust has a term of approximately 55 years, but may
terminate earlier as provided in the applicable Trust Agreement. Each Liberty
Financial Trust's business and affairs are conducted by its trustees, each
appointed by the Company as holder of the Common Securities. Unless otherwise
specified in the applicable Prospectus Supplement, the trustees for each Liberty
Financial Trust will be State Street Bank and Trust Company, as the Property
Trustee (the "Property Trustee"), Wilmington Trust Company, as the Delaware
Trustee (the "Delaware Trustee"), and two individual trustees (the
"Administrative Trustees") who are employees or officers of or affiliated with
the Company (collectively, the "Issuer Trustees"). State Street Bank and Trust
Company, as Property Trustee, will act as sole indenture trustee under each
Trust Agreement for purposes of compliance with the Trust Indenture Act. State
Street Bank and Trust Company will also act as trustee under the Guarantees and
the Junior Subordinated Indenture (as defined herein). See "Description of
Guarantees" and "Description of Junior Subordinated Debt Securities." The holder
of the Common Securities of
4
<PAGE>
a Liberty Financial Trust, or the holders of a majority in liquidation
preference of the related Preferred Securities if a Junior Subordinated Debt
Security Event of Default under the Trust Agreement for such Liberty Financial
Trust has occurred and is continuing, will be entitled to appoint, remove or
replace the Property Trustee and/or the Delaware Trustee for such Liberty
Financial Trust. In no event will the holders of the Preferred Securities have
the right to vote to appoint, remove or replace the Administrative Trustees;
such voting rights are vested exclusively in the holder of the Common
Securities. The duties and obligations of each Issuer Trustee are governed by
the applicable Trust Agreement. The Company will pay all fees and expenses
related to each Liberty Financial Trust and the offering of the Preferred
Securities and will pay, directly or indirectly, all ongoing costs, expenses and
liabilities of each Liberty Financial Trust.
The principal executive office of each Liberty Financial Trust is 600
Atlantic Avenue, Boston, Massachusetts 02210-2214, and its telephone number is
(617) 722-6000.
5
<PAGE>
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement
with respect to the proceeds from the sale of the particular Offered Securities
to which such Prospectus Supplement relates, the net proceeds from the sale of
the Offered Securities are expected to be used by the Company for general
corporate purposes, including repayment or redemption of outstanding debt
(including without limitation indebtedness owed to Liberty Mutual) or preferred
stock, the possible acquisition of financial services businesses or assets
thereof, investments in portfolio assets and working capital needs. The Company
routinely reviews opportunities to acquire financial services businesses or
assets thereof. Each Liberty Financial Trust will use all proceeds received from
the sale of its Trust Securities to purchase Junior Subordinated Debt Securities
of the Company. The specific allocations, if any, of the proceeds of any of the
Offered Securities will be described in the Prospectus Supplement relating
thereto.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's historical consolidated
ratios of earnings to fixed charges and earnings to combined fixed charges and
preferred stock dividends for the six months ended June 30, 1998 and 1997 and
for each of the years in the five-year period ended December 31, 1997.
<TABLE>
<CAPTION>
Six Months Ended
June 30 Year Ended December 31
---------------------- ------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges: (1)
Excluding interest on fixed annuities
and financial products (2) 8.00 x 8.14 x 8.42 x 7.11 x 6.55 x 13.07 x 24.23 x
------ ------ ------ ------ ------ ------- -------
Including interest on fixed annuities
and financial products 1.30 x 1.31 x 1.31 x 1.25 x 1.20 x 1.17 x 1.12 x
------ ------ ------ ------ ------ ------ ------
Ratio of earnings to combined fixed
charges and preferred stock dividends: (1)
Excluding interest on
fixed annuities and
financial products (2) 7.58 x 7.74 x 7.99 x 6.73 x 6.22 x 13.07 x 24.23 x
------ ------- ------ ------ ------- ------- -------
Including interest on
fixed annuities and
financial products 1.30 x 1.31 x 1.31 x 1.25 x 1.20 x 1.17 x 1.12 x
------ ------ ------ ------ ------ ------ ------
</TABLE>
(1) For purposes of determining these ratios, earnings consist of pretax income
plus fixed charges. Fixed charges consist of (i) interest on indebtedness,
(ii) the portion of operating leases that are representative of the
interest factor, (iii) accretion to face value of redeemable convertible
preferred stock, and (iv) interest on fixed annuities and financial
products.
(2) These ratios are included to assist the reader in analyzing the impact of
interest on annuities and financial products, which is not generally
required to be paid in cash in the period it is recognized. These ratios
exclude interest credited to annuities and financial products of $282.3
million and $294.5 million for the six months ended June 30, 1998 and 1997,
respectively, and $594.1 million, $572.7 million, $555.8 million, $481.9
million, and $504.2 million for the years ended December 31, 1997, 1996,
1995, 1994 and 1993, respectively.
6
<PAGE>
DESCRIPTION OF THE SENIOR DEBT SECURITIES
The Senior Debt Securities (for purposes of this Section only, the
"Debt Securities") may be issued in one or more series under an Indenture, as
supplemented from time to time (as so supplemented, the "Indenture"), between
the Company and State Street Bank and Trust Company, as trustee (the "Trustee").
This summary of certain terms and provisions of the Indenture does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to the Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and to the Trust Indenture Act.
The Indenture is qualified under the Trust Indenture Act. Parenthetical
references in this Section are to provisions of the Indenture. Certain terms
defined in the Indenture are capitalized in this Prospectus. Whenever particular
defined terms of the Indenture are referred to herein or in a Prospectus
Supplement, such defined terms are incorporated herein or therein by reference.
GENERAL
The Debt Securities will be unsecured and will rank on the parity with
all other unsecured and unsubordinated indebtedness of the Company.
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued up to the
aggregate principal amounts which may be authorized from time to time by the
Company. Reference is made to the Prospectus Supplement for the following terms
of Debt Securities being offered thereby: (i) the title, aggregate principal
amount and authorized denominations of Debt Securities; (ii) the percentage of
their principal amount at which such Debt Securities will be issued; (iii) date
or dates on which Debt Securities will mature; (iv) the rate or rates per annum
(which may be fixed or variable), if any, at which Debt Securities will bear
interest (or the method of determination or calculation thereof); (v) the times
at which any such interest will be payable; (vi) the currency or units based on
or relating to currencies in which the Debt Securities are denominated and in
which principal, premium, if any, any interest and Additional Amounts (as
defined below) will or may be payable; (vii) the dates, if any, on which and the
price or prices at which the Debt Securities will, pursuant to any mandatory
sinking fund provisions, or may, pursuant to any optional sinking fund
provisions, be redeemed by the Company, and other terms and provisions of such
sinking fund; (viii) any redemption terms or any terms for repayment of
principal amount at the option of the holder; (ix) whether and under what
circumstances the Company will pay additional amounts ("Additional Amounts") in
respect of certain taxes imposed on certain holders or as otherwise provided;
(x) the terms and conditions upon which such Debt Securities may be convertible
into shares of Common Stock or other securities of the Company, including the
conversion price, conversion period and other conversion provisions; (xi) the
defeasance provisions, if any, that are applicable to such Debt Securities
(other than those described herein); (xii) whether the Debt Securities are to be
issuable in global form and, if so, the terms and conditions, if any, upon which
interests in such Debt Securities in global form may be exchanged, in whole or
in part, for the individual Debt Securities represented thereby and the initial
Depository with respect to such global Debt Security; (xiii) the person to whom
any interest on a Registered Security is payable, if other than the registered
holder thereof, or the manner in which any interest is payable on a Bearer
Security if other than upon presentation of the coupons pertaining thereto, as
the case may be; or (xiv) any other specific terms of such Debt Securities.
Principal, interest and premium and Additional Amounts, if any, will be
payable in the manner, at the places and subject to the restrictions set forth
in the Indenture, the Debt Securities and the Prospectus Supplement relating
thereto.
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Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Debt Securities will be issued in fully registered form without
coupons. Where Debt Securities of any series are issued in bearer form, the
special restrictions and considerations, including special offering restrictions
and special Federal income tax considerations, applicable to any such Debt
Securities and to payment on and transfer and exchange of such Debt Securities
will be described in the applicable Prospectus Supplement.
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or at a rate which at the time of issuance is below market
rates) to be sold at the substantial discount below their stated principal
amount. Federal income tax consequences and other special considerations
applicable to any such discounted Debt Securities will be described in the
Prospectus Supplement relating thereto.
If the purchase price of any Debt Securities is payable in one or more
foreign currencies or currency units or if any Debt Securities are denominated
in one or more foreign currencies or currency units or if the principal of,
premium, if any, or interest, if any, on any Debt Securities is payable in one
or more foreign currencies or currency units, the restrictions, elections,
certain Federal income tax considerations, specific terms and other information
with respect to such issue of Debt Securities and such foreign currency or
currency units will be set forth in the applicable Prospectus Supplement.
Debt Securities may be presented for exchange, and registered Debt
Securities may be presented for transfer, in the manner, at the places and
subject to the restrictions set forth in the Indenture, the Debt Securities and
the Prospectus Supplement relating thereto. Debt Securities in bearer form and
the coupons, if any, appertaining thereto will be transferable by delivery. No
service charge will be made for any transfer or exchange of Debt Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Section 2.06)
Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the Indenture and the Debt Securities would not
necessarily afford Holders of the Debt Securities protection in the event of a
highly leveraged or other transaction involving the Company that may adversely
affect Holders.
If the Debt Securities are convertible into shares of Common Stock, the
conversion price payable and the number of shares purchasable upon conversion
may be subject to adjustment in certain events as set forth in the applicable
Prospectus Supplement.
FORM, REGISTRATION, TRANSFER AND EXCHANGE
The Debt Securities of a series may be issued solely as Registered
Securities, solely as Bearer Securities (with or without coupons attached) or as
both Registered Securities and Bearer Securities. Debt Securities of a series
may be issuable in whole or part in the form of one or more global Debt
Securities ("Global Securities"), as described below under "Book-Entry Debt
Securities".
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series or any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and as Bearer Securities,
at the option of the holder, subject to the terms of the Indenture, Bearer
Securities (accompanied by all unmatured coupons, except as provided below, and
all matured coupons in default) of such series will be exchangeable for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. Unless otherwise indicated in the
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applicable Prospectus Supplement, any Bearer Security surrendered in exchange
for a Registered Security between a record date or a special record date for
defaulted interest and the relevant date for payment of interest will be
surrendered without the coupon relating to such date for payment of interest and
interest will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the holder of
such coupon when due in accordance with the terms of the Indenture. Bearer
Securities will not be issued in exchange for Registered Securities. (Sections
2.06, 2.12 and 4.01)
Debt Securities may be presented for exchange as provided above, and
unless otherwise indicated in the applicable Prospectus Supplement, Registered
Securities may be presented for registration of transfer (duly endorsed, or
accompanied by a duly executed written instrument of transfer), at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in the applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon such transfer agent being satisfied with the documents of
title and identity of the person making the request. The Company may at any time
rescind the designation of any transfer agent, 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 Debt
Securities of such series. The Company may at any time designate additional
transfer agents with respect to any series of Debt Securities. (Sections 2.06
and 4.02)
In the event of any redemption of Debt Securities of any series, the
Company will not be required to (i) register the transfer of or exchange Debt
Securities of that series during a period of 15 days next preceding the
selection of securities of such series to be redeemed; (ii) register the
transfer of or exchange any Registered Security, or portion thereof, called for
redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption
except, to the extent provided with respect to any series of Debt Securities and
referred to in the applicable Prospectus Supplement, to exchange such Bearer
Security for a Registered Security of that series and of like tenor and
principal amount that is immediately surrendered for redemption. (Section 2.06)
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal, premium, if any, interest and Additional Amounts, if any,
on Registered Securities will be made at the office of such paying agent or
paying agents as the Company may designate from time to time, except that at the
option of the Company payment of any interest and any Additional Amounts may be
made by check or draft mailed to the address of the Person entitled thereto as
such address shall appear in the Debt Security Register. Unless indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such Registered
Security is registered at the close of business on the record date for such
interest. (Section 4.01)
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal, premium, if any, interest and Additional Amounts, if any,
on Bearer Securities will be payable, subject to any applicable laws and
regulations, at the offices of such paying agents outside the United States as
the Company may designate from time to time, or by check or by transfer to an
account maintained by the payee outside the United States. Unless otherwise
indicated in the applicable Prospectus Supplement, any payment of interest on
any Bearer Securities will be made only against surrender of the coupon relating
to such interest installment. (Sections 2.06 and 4.02)
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Any paying agents in or outside the United States initially designated
by the Company for the Debt Securities will be named in the applicable
Prospectus Supplement. If the Debt Securities of a series are listed on a stock
exchange located outside the United Sates, and such stock exchange shall so
require, the Company will maintain a paying agent with respect to such series in
London, Luxembourg or any other city so required located outside the United
States so long as the Debt Securities of such series are listed on such
exchange. The Company may at any time designate additional paying agents or
rescind the designation of any paying agent, 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. (Section
4.20)
All monies paid by the Company to a paying agent for the payment of
principal of or interest or Additional Amounts, if any, on any Debt Security
which remain unclaimed at the end of one year after such principal, interest or
Additional Amounts shall have become due and payable will be repaid to the
Company and the holder of such Debt Security or any coupon will thereafter look
only to the Company for payment thereof. (Section 4.03)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in the form of one or
more Global Securities that will be deposited with a Depository or its nominee
identified in the applicable Prospectus Supplement. In such a case, one or more
Global Securities will be issued in a denomination or aggregate denominations
equal to the portion of the aggregate principal amount of outstanding Debt
Securities of the series to be represented by such Global Security or Global
Securities. Unless and until it is exchanged in whole or in part for Debt
Securities in registered form, a Global Security may not, subject to certain
exceptions, be registered for transfer or exchange except to the Depository for
such Global Security or a nominee of such Depository. (Section 2.06)
The specific terms of the depository arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the provisions described below will be applicable to depository
arrangements.
Unless otherwise specified in the applicable Prospectus Supplement,
Debt Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depository will be represented by a Global Security
registered in the name of such Depository or its nominee. Upon the issuance of
such Global Security and the deposit of such Global Security with or on behalf
of the Depository for such Global Security, the Depository will credit on its
book-entry registration and transfer system the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depository or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in such Global Security will be limited to participants or persons
that may hold interests through participants. Ownership of beneficial interest
by participants in such Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by the
Depository for such Global Security. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities
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represented by such Global Security for all purposes under the Indenture. Unless
otherwise specified in the applicable Prospective Supplement, owners of
beneficial interests in such Global Security will not be entitled to have Debt
Securities of the Series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in certificated form and will not be considered the
holders thereof for any purposes under the Indenture. (Sections 2.06 and 11.03)
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depository and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest to exercise any rights of a holder under the Indenture. The Company
understands that, under existing industry practices, if the Company requests any
action of holders or an owner of a beneficial interest in such Global Security
desires to give any notice or take any action a holder is entitled to give or
take under the Indenture, the Depository would authorize the participants to
give such notice or take such action, and participants would authorize
beneficial owners owning through such participants to give such notice or take
such notice or would otherwise act upon the instructions of beneficial owners
owning through them.
Principal of and any premium, interest and Additional Amounts on a
Global Security will be payable in the manner described in the applicable
Prospectus Supplement.
LIMITATION ON LIENS ON STOCK OF RESTRICTED SUBSIDIARIES
Unless otherwise specified in the applicable Prospectus Supplement, the
Company will not, nor will it permit any Restricted Subsidiary to, issue, assume
or guarantee any indebtedness for borrowed money (hereinafter referred to as
"Debt") secured by a mortgage, security interest, pledge, lien or other
encumbrance upon any shares of stock of any Restricted Subsidiary without
effectively providing that the Debt Securities (together with, if the Company
shall so determine, any other indebtedness of or guarantee by the Company
ranking equally with the Debt Securities and then existing or thereafter
created) shall be secured equally and ratably with such Debt. (Section 4.06)
For purposes of the Indenture, "Restricted Subsidiary" means any
operating subsidiary that accounts for 10% or more of the consolidated revenues
and/or assets of the Company.
LIMITATION ON ISSUANCE OR DISPOSITION OF STOCK OF RESTRICTED SUBSIDIARIES
The Company will not, nor will it permit any Restricted Subsidiary to,
issue, sell, assign, transfer or otherwise dispose of, directly or indirectly,
any Capital Stock (other than nonvoting preferred stock) of any Restricted
Subsidiary, except for (i) the purpose of qualifying directors; (ii) sales or
other dispositions to the Company or one or more Restricted Subsidiaries; (iii)
the disposition of all or any part of the Capital Stock of any Restricted
Subsidiary for consideration which is at least equal to the fair value of such
Capital Stock as determined by the Company's Board of Directors (acting in good
faith); or (iv) an issuance, sale, assignment, transfer or other disposition
required to comply with an order of a court or regulatory authority of competent
jurisdiction, other than an order issued at the request of the Company or any
Restricted Subsidiary. (Section 4.07)
For the purposes of the Indenture, "Capital Stock" means any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) corporate stock.
(Section 1.01)
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DEFAULTS AND REMEDIES
An Event of Default with respect to Debt Securities of any series is
defined in the Indenture as being: (a) default for thirty (30) days in payment
of any interest or Additional Amounts on the Debt Securities of such series; (b)
default in payment of principal or premium, if any, on the Debt Securities of
such series when due either at maturity, upon redemption, by declaration or
otherwise (except a failure to make payment resulting from mistake, oversight or
transfer difficulties not continuing for more than three (3) Business Days
beyond the date on which such payment is due); (c) default in payment of any
sinking fund installment when due and payable (except a failure to make payment
result from mistake, oversight or transfer difficulties not continuing for more
than three (3) Business Days beyond the date on which such payment is due); (d)
default by the Company in the performance or breach of any other covenant or
warranty of the Company in respect of the Debt Securities of such series for a
period of sixty (60) days after notice thereof to the Company or Trustee (other
than a covenant default which is specifically designed as having a different
time period); (e) certain events involving the bankruptcy or insolvency of the
Company; or (f) other Events of Default as specified in the Supplemental
Indenture or Board Resolution under which such series of Debt Securities was
issued. (Section 6.01)
The Indenture provides that (1) if an Event of Default described in
clauses (a), (b), (c) or, in the event of a default with respect to less than
all Outstanding series under the Indenture, (d) above shall have occurred and be
continuing with respect to one or more series, either the Trustee or the holders
of 25% in aggregate principal amount of the Debt Securities of such series then
Outstanding (each such series voting as a separate class) may declare the
principal (or, in the case of original issue discount Debt Securities, the
portion thereof specified in the terms thereof) of all Outstanding Debt
Securities of such series and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and payable immediately
and (2) if an Event of Default described in clause (d) (in the event of a
default with respect to all Outstanding series) or (e) above shall have occurred
and be continuing, either the Trustee or the holders of 25% in principal amount
of all Debt Securities then Outstanding (voting as one class) may declare the
principal (or, in the case of original issue discount Debt Securities, the
portion of the principal amount thereof specified in the terms thereof) of all
Debt Securities then Outstanding and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and payable immediately,
but upon certain conditions such declarations may be annulled and past defaults
(except for defaults in the payment of principal of, or premium, interest or
Additional Amounts, if any, on such Debt Securities) may be waived by the
holders of a majority in principal amount of the Debt Securities of such series
(or of all series, as the case may be) then Outstanding. (Sections 6.01 and
6.10)
Holders may not enforce the Indenture or the Debt Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Debt Securities unless it receives indemnity satisfactory to it. Subject to
certain limitations, holders of a majority in principal amount of the Debt
Securities of any series may direct the Trustee in its exercise of any trust or
power. The Company is required to deliver annually to the Trustee an officer's
statement indicating whether the signer knows of any default by the Company in
performing any of its obligations under the Indenture. The Trustee may withhold
from Holders notice of any continuing default (except a default in payment of
principal, premium, if any, interest or Additional Amounts, if any, or any
sinking or purchase fund installment) if it determines that withholding notice
is in their interest. (Sections 4.05, 6.06, 6.09, 6.11, 7.01 and 7.05)
DEFEASANCE
Unless otherwise described in a Prospectus Supplement with respect to
any series of Debt Securities, the Company, at its option, (a) will be
discharged from any and all obligations in respect of such Debt Securities
(except in each
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case for certain obligations to register the transfer or exchange of such Debt
Securities, replace stolen, lost or mutilated Debt Securities, maintain paying
agencies and hold moneys for payment in trust) on the ninety-first day after
satisfaction of all conditions thereto or (b) effective upon the satisfaction of
all conditions thereto, need not comply with certain restrictive covenants
(including any covenants or agreements applicable with respect to a particular
series of Debt Securities) under the Indenture and will not be limited by any
restrictions with respect to merger, consolidation or sales of assets, in each
case if the Company deposits with the Trustee, in trust, (x) money or (y)
Government Obligations or a combination of (x) and (y) which, through the
payment of interest thereon and principal thereof in accordance with their
terms, will in the written opinion of independent public accountants selected by
the Company, provide money in an amount sufficient to pay all the principal
(including any mandatory sinking fund payments) of, and interest and Additional
Amounts, if any, and premium, if any, on, such Debt Securities on the dates such
payment are due in accordance with the terms of such series. (Section 8.02) In
order to avail itself of either of the foregoing options, no Event of Default
shall have occurred and be continuing under the Indenture and the Company must
provide to the Trustee (i) an opinion of counsel to the effect that holders of
the Debt Securities of such series will not recognize income, gain or loss for
Federal income tax purposes as a result of the Company's exercise of its option
and will be subject to Federal income tax on the same amount and in the same
manner, and at the same time as would have been the case if such option had not
been exercised and, in the case of Debt Securities being discharged, such
opinion shall be accompanied by a private letter ruling to that effect received
from the United States Internal Revenue Service (the "Service") or a revenue
ruling pertaining to a comparable form of transaction to that effect published
by the Service, (ii) an officers' certificate to the effect that no Event of
Default or event which with the giving of notice or lapse of time, or both,
would become an Event of Default, with respect to such Debt Securities shall
have occurred and be continuing on the date of the deposit, and (iii) if the
Debt Securities are listed on the New York Stock Exchange, an opinion of counsel
to the effect that the exercise of such option will not cause the Debt
Securities to be delisted. (Section 8.02) "Governmental Obligations" means
generally direct noncallable obligations of the government which issued the
currency in which the Debt Securities of the applicable series are denominated,
noncallable obligations the payment of the principal of and interest on which is
fully guaranteed by such government, and noncallable obligations on which the
full faith and credit of such government is pledged to the payment of the
principal thereof and interest thereon. (Section 1.01). In addition, the Company
may obtain a discharge under the Indenture with respect to all the Debt
Securities of a series by depositing with the Trustee, in trust, moneys or
Government Obligations sufficient to pay at maturity or upon redemption
principal of, premium, if any, and any interest and Additional Amounts on, all
of the Debt Securities of such series, provided that all of the Debt Securities
of such series are by their terms to become due and payable within one year or
are to be called for redemption within one year. No opinion of counsel or ruling
relating to the tax consequences to holders is required with respect to a
discharge pursuant to the provisions described in the immediately preceding
sentence. (Section 8.01) In the event of any discharge of Debt Securities
pursuant to the terms of the Indenture described above, the holders of such Debt
Securities will thereafter be able to look solely to such trust fund, and not to
the Company, for payments of principal, premium, if any, and interest and
Additional Amounts, if any. (Sections 8.01 and 8.02)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Unless otherwise specified in the applicable Prospectus Supplement, the
Company may not consolidate with or merge into, or sell, lease or convey all or
substantially all of its assets to, another corporation unless (i) the successor
or transferee corporation, which shall be a corporation organized and existing
under the laws of the United States or a State thereof, assumes by supplemental
indenture all the obligations of the Company under the Debt Securities and the
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Indenture and (ii) the Company or successor corporation, as the case may be,
will not, immediately after such consolidation or merger or sale, lease or
conveyance, be in default in the performance of any covenant or condition with
respect to the Debt Securities or the Indenture. The Company will deliver to the
Trustee an Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture comply
with the terms of the Indenture. Upon any consolidation or merger, or any sale,
lease or conveyance of all or substantially all of the assets of the Company,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under the Indenture.
Sections 5.01 and 5.02). Thereafter all obligations of the predecessor
corporation shall terminate. (Section 5.01)
MODIFICATION OF THE INDENTURE
The Indenture permits the Company and the Trustee to amend or
supplement the Indenture or the Debt Securities without notice to or consent of
any holder of a Debt Security for certain purposes, including without
limitation, to cure any ambiguity, defect or inconsistency, to comply with
Section 5.01 (relating to when the Company may consolidate, merge or sell all or
substantially all of its assets), to provide for uncertificated Debt Securities,
to establish the form or terms of Debt Securities of any series or to make any
change that does not adversely affect the rights of any holder of a Debt
Security. (Section 9.01) Certain modifications and amendments of the Indenture
may be made by the Company and the Trustee only with the consent of the holders
of at least a majority in aggregate principal amount of the Outstanding Debt
Securities of each series issued under the Indenture which is affected by the
modification or amendment (voting as one class). However, no such modification
or amendment may, without the consent of the holder of each Debt Security
affected thereby, (i) reduce the aforesaid percentage of Debt Securities whose
holders must consent to an amendment, supplement or waiver; (ii) reduce the rate
or rates or extend the time for payment of interest or Additional Amounts, if
any, on any Debt Security; (iii) reduce the principal of or premium, if any, on
or extend the fixed maturity of any Debt Security; (iv) modify or effect in any
manner adverse to the holders of Debt Securities the terms and conditions of the
obligations of the Company in respect of its obligations under the Indenture;
(v) waive a default in the payment of principal of or premium or interest or
Additional Amounts, if any, on any Debt Security; (vi) impair the right to
institute a suit for the enforcement of any payment on or with respect to any
series of Debt Securities; (vii) change a Place of Payment; or (viii) make any
Debt Security payable in currency other than that stated in the Debt Security.
(Section 9.02)
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities may be issued in one or more
series under a Junior Subordinated Indenture, as supplemented from time to time
(as so supplemented, the "Junior Subordinated Indenture"), between the Company
and State Street Bank and Trust Company as trustee (the "Junior Subordinated
Indenture Trustee"). This summary of certain terms and provisions of the Junior
Subordinated Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the Junior Subordinated Indenture,
the form of which is filed as an exhibit to the Registration Statement of which
this prospectus forms a part, and to the Trust Indenture Act. The Junior
Subordinated Indenture is qualified under the Trust Indenture Act. Parenthetical
references in this Section are to provisions of the Junior Subordinated
Indenture. Certain terms defined in the Junior Subordinated indenture are
capitalized in this Prospectus. Whenever particular defined terms of the Junior
Subordinated Indenture are referred to herein or in a Prospectus Supplement,
such defined terms are incorporated herein or therein by reference.
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GENERAL
Each series of Junior Subordinated Debt Securities will rank PARI PASSU
with all other series of Junior Subordinated Debt Securities and will be
unsecured and subordinate and junior in right of payment to the extent and in
the manner set forth in the Junior Subordinated Indenture to all Senior Debt (as
defined below) of the Company. See "--Subordination." The Company is a
non-operating holding company and substantially all of the operating assets of
the Company and its consolidated subsidiaries are owned by such subsidiaries.
The Company relies primarily on dividends from such subsidiaries to meet its
obligations. The payment of dividends by Keyport is limited under the insurance
company holding company laws of the State of Rhode Island. Accordingly, the
Junior Subordinated Debt Securities will be effectively subordinated to all
existing and future liabilities of the Company's subsidiaries, and holders of
Junior Subordinated Debt Securities should look only to the assets of the
Company for payments on the Junior Subordinated Debt Securities. Except as
otherwise provided in the applicable Prospectus Supplement, the Junior
Subordinated Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of the Company, whether under the Junior Subordinated
Indenture, any other indenture that the Company may enter into in the future or
otherwise. See "-- Subordination" and the Prospectus Supplement relating to any
offering of Offered Securities.
The Junior Subordinated Debt Securities will be issuable in one or more
series pursuant to an indenture supplemental to the Junior Subordinated
Indenture or a resolution of the Company's Board of Directors or a committee
thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Junior Subordinated Debt Securities: (1) the
title of the Junior Subordinated Debt Securities; (2) any limit upon the
aggregate principal amount of the Junior Subordinated Debt Securities; (3) the
date or dates on which the principal of the Junior Subordinated Debt Securities
is payable (the "Stated Maturity") or the method of determination thereof; (4)
the rate or rates, if any, at which the Junior Subordinated Debt Securities
shall bear interest, the Interest Payment Dates on which any such interest shall
be payable, the right, if any, of the Company to defer or extend an Interest
Payment Date, and the Regular Record Date for any interest payable on any
Interest Payment Date or the method by which any of the foregoing shall be
determined; (5) the place or places where, subject to the terms of the Junior
Subordinated Indenture as described below under "Payment and Paying Agents", the
principal of and premium, if any, and interest on the Junior Subordinated Debt
Securities will be payable and where, subject to the terms of the Junior
Subordinated Indenture as described below under "--Denominations, Registration
and Transfer," the Junior Subordinated Debt Securities may be presented for
registration of transfer or exchange and the place or places where notices and
demands to or upon the Company in respect of the Junior Subordinated Debt
Securities and the Junior Subordinated Indentures may be made ("Place of
Payment"); (6) any period or periods within or date or dates on which, the price
or prices at which and the terms and conditions upon which Junior Subordinated
Debt Securities may be redeemed, in whole or in part, at the option of the
Company or a holder thereof; (7) the obligation or the right, if any, of the
Company or a holder thereof to redeem, purchase or repay the Junior Subordinated
Debt Securities 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 the Junior Subordinated Debt
Securities shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation; (8) the denominations in which any Junior Subordinated Debt
Securities shall be issuable if other than denominations of $25 and any integral
multiple thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Junior Subordinated Debt Securities shall be
payable, or in which the Junior Subordinated Debt Securities shall be
denominated; (10) any additions, modifications or deletions in the
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Events of Default or covenants of the Company specified in the Junior
Subordinated Indenture with respect to the Junior Subordinated Debt Securities;
(11) if other than the principal amount thereof, the portion of the principal
amount of Junior subordinated Debt Securities that shall be payable upon
declaration of acceleration of the maturity thereof; (12) any additions or
changes to the Junior Subordinated Indenture with respect to a series of Junior
Subordinated Debt Securities as shall be necessary to permit or facilitate the
issuance of such series in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; (13) any index or indices used
to determine the amount of payments of principal of and premium, if any, on the
Junior Subordinated Debt Securities and the manner in which such amounts will be
determined; (14) the terms and conditions relating to the issuance of a
temporary Global Security representing all of the Junior Subordinated Debt
Securities of such series and the exchange of such temporary Global Security for
definitive Junior Subordinated Debt Securities of such series; (15) subject to
the terms described under "--Global Junior Subordinated Debt Securities",
whether the Junior Subordinated Debt Securities of the series shall be issued in
whole or in part in the form of one or more Global Securities and, in such case,
the Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Exchange Act; (16) the appointment of any Paying
Agent or Agents; (17) the terms and conditions of any obligation or right of the
Company or a holder to convert or exchange the Junior Subordinated Debt
Securities into Preferred Securities; (18) the form of Trust Agreement and
Guarantee Agreement, if applicable; (19) the relative degree, if any, to which
such Junior Subordinated Debt Securities of the series shall be senior to or be
subordinated to other series of such Junior Subordinated Debt Securities or
other indebtedness of the Company in right of payment, whether such other series
of Junior Subordinated Debt Securities or other indebtedness are outstanding or
not; and (20) any other terms of the Junior Subordinated Debt Securities not
inconsistent with the provisions of the Junior Subordinated Indenture.
Junior Subordinated Debt Securities may be sold at a substantial
discount below their stated principal amount, bearing no interest or interest at
a rate which at the time of issuance is below market rates. Certain United
States Federal income tax consequences and special considerations applicable to
any such Junior Subordinated Debt Securities will be described in the applicable
Prospectus Supplement.
If the purchase price of any of the Junior Subordinated Debt Securities
is payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debt Securities are denominated in one or more foreign currencies
or currency units or if the principal of, premium, if any, or interest, if any,
on any Junior Subordinated Debt Securities is payable in one or more foreign
currencies or currency units, the restrictions, elections, certain United States
Federal income tax consequences, specific terms and other information with
respect to such issue of Junior Subordinated Debt Securities and such foreign
currency or currency units will be set forth in the applicable Prospectus
Supplement.
If any index is used to determine the amount of payments of principal
of, premium, if any, or interest on any series of Junior Subordinated Debt
Securities, special United States Federal income tax, accounting and other
considerations applicable thereto will be described in the applicable Prospectus
Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debt Securities will be issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof.
Junior Subordinated Debt Securities of any series will be exchangeable for other
Junior Subordinated Debt Securities of the same issue and series, of any
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authorized denominations, of a like aggregate principal amount, of the same
Original Issue Date and Stated Maturity and bearing the same interest rate.
Junior Subordinated Debt Securities may be presented for exchange as
provided above, and may be presented for registration of transfer (with the form
of transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate Securities Registrar or at the
office of any transfer agent designated by the Company for such purpose with
respect to any series of Junior Subordinated Debt Securities and referred to in
the applicable Prospectus Supplement, without service charge and upon payment of
any taxes and other governmental charges as described in the Junior Subordinated
Indenture. The Company will appoint the Trustee as Securities Registrar under
the Junior Subordinated indenture. If the applicable Prospectus Supplement
refers to any transfer agents (in addition to the Securities Registrar)
initially designated by the Company with respect to any series of Junior
Subordinated Debt Securities, the Company may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, provided that the Company maintains
a transfer agent in each Place of Payment for such series. The Company may at
any time designate additional transfer agents with respect to any series of
Junior Subordinated Debt Securities.
In the event of any redemption, neither the Company nor the Junior
Subordinated Indenture Trustee shall be required to (i) issue, register the
transfer of or exchange Junior Subordinated Debt Securities of any series during
a period beginning at the opening of business 15 days before the day of
selection for redemption of Junior Subordinated Debt Securities of that series
and ending at the close of business on the day of mailing of the relevant notice
of redemption or (ii) transfer or exchange any Junior Subordinated Debt
Securities so selected for redemption, except, in the case of any Junior
Subordinated Debt Securities being redeemed in part, any portion thereof not to
be redeemed.
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GLOBAL JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities of a series may be issued in
whole or in part in the form of one or more Global Junior Subordinated Debt
Securities that will be deposited with, or on behalf of, a depositary (the
"Depositary") identified in the Prospectus Supplement relating to such series.
Global Junior Subordinated Debt Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Junior Subordinated Debt
Securities represented thereby, a Global Junior Subordinated Debt Security may
not be transferred except as a whole by the depositary for such Global Junior
Subordinated Debt Security to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
the Depositary or any nominee to a successor Depositary or any nominee of such
successor.
The specific terms of the depositary arrangement with respect to a
series of Junior Subordinated Debt Securities will be described in the
Prospectus Supplement relating to such series. The Company anticipates that the
following provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debt security, and
the deposit of such Global Junior Subordinated Debt Security with or on behalf
of the Depositary, the Depositary for such Global Junior Subordinated Debt
Security or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the individual Junior Subordinated
Debt Securities represented by such Global Junior Subordinated Debt Security to
the accounts of persons that have accounts with such Depositary
("Participants"). Such accounts shall be designated by the dealers, underwriters
or agents with respect to such Junior Subordinated Debt Securities or by the
Company if such Junior Subordinated Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Junior
Subordinated Debt Security will be limited to participants or persons that my
hold interests through Participants. Ownership of beneficial interests in such
Global Junior Subordinated Debt Security will be shown on, and the transfer of
that ownership will be effected only through, records maintained by the
applicable Depositary or its nominee (with respect to interests of Participants)
and the records of participants (with respect to interests of persons who hold
through Participants). The laws of some states require that certain purchasers
of securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Junior Subordinated Debt Security.
So long as the Depositary for a Global Junior Subordinated Debt
Security, or its nominee, is the registered owner of such Global Junior
Subordinated Debt Security, such Depositary or such nominee, as the case may be,
will be considered the sole owner or holder of the Junior Subordinated Debt
Securities represented by such Global Junior Subordinated Debt Security for all
purposes under the Junior Subordinated Indenture governing such Junior
Subordinated Debt Securities. Except as provided below, owners of beneficial
interests in a Global Junior Subordinated Debt Security will not be entitled to
have any of the individual Junior Subordinated Debt Securities of the series
represented by such Global Junior Subordinated Debt Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Junior Subordinated Debt Securities of such series in definitive form and will
not be considered the owners or holders thereof under the Junior Subordinated
Indenture.
Payments of principal of (and premium, if any) and interest on
individual Junior Subordinated Debt Securities represented by a Global Junior
Subordinated Debt Security registered in the name of a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner of the Global Junior Subordinated Debt Security representing
such Junior Subordinated Debt Securities. None of the Company, the Junior
Subordinated
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Indenture Trustee, any Paying Agent, or the Securities Registrar for such Junior
Subordinated Debt Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Junior Subordinated Debt Security representing
such Junior Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Junior
Subordinated Debt Securities or its nominee, upon receipt of any payment of
principal, premium or interest in respect of a permanent Global Junior
Subordinated Debt Security representing any of such Junior Subordinated Debt
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Junior Subordinated Debt Security for such Junior
Subordinated Debt Securities as shown on the records of such Depositary or its
nominee. The Company also expects that payments by Participants to owners of
beneficial interests in such Global Junior Subordinated Debt Security held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if
a Depositary for a series of Junior Subordinated Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Junior Subordinated Debt Securities of such series in exchange
for the Global Junior Subordinated Debt Security representing such series of
Junior Subordinated Debt Securities. In addition, the Company may at any time
and in its sole discretion, subject to any limitations described in the
Prospectus Supplement relating to such Junior Subordinated Debt Securities,
determine not to have any Junior Subordinated Debt Securities of such series
represented by one or more Global Junior Subordinated Debt Securities and, in
such event, will issue individual Junior Subordinated Debt Securities of such
series in exchange for the Global Junior Subordinated Debt Security or
Securities representing such series of Junior Subordinated Debt Securities.
Further, if the Company so specifies with respect to the Junior Subordinated
Debt Securities of a series, an owner of a beneficial interest in a Global
Junior Subordinated Debt Security representing Junior Subordinated Debt
Securities of such series may, on terms acceptable to the Company, the Junior
Subordinated Indenture Trustee and the Depositary for such Global Junior
Subordinated Debt Security, receive individual Junior Subordinated Debt
Securities of such series in exchange for such beneficial interests, subject to
any limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debt Securities. In any such instance, an owner of a beneficial
interest in a Global Junior Subordinated Debt Security will be entitled to
physical delivery of individual Junior Subordinated Debt Securities of the
series represented by such Global Junior Subordinated Debt Security equal in
principal amount to such beneficial interest and to have such Junior
Subordinated Debt Securities registered in its name. Individual Junior
Subordinated Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $25 and integral
multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of (and premium, if any) and any interest on Junior
Subordinated Debt Securities will be made at the office of the Junior
Subordinated Indenture Trustee in the City of New York or at the office of such
Paying Agent or Paying Agents as the Company may designate from time to time in
the applicable Prospectus Supplement, except that at the option of the Company
payment of any interest may be made (i), except in the case of Global Junior
Subordinated Debt Securities, by check mailed to the address of the Person
entitled thereto as such
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address shall appear in the Securities Register or (ii) by transfer to an
account maintained by the Person entitled thereto as specified in the Securities
Register, provided that proper transfer instructions have been received by the
Regular Record Date. Unless otherwise indicated in the applicable Prospectus
Supplement, payment of any interest on Junior Subordinated Debt Securities will
be made to the Person in whose name such Junior Subordinated Debt Securities are
registered at the close of business on the Regular Record Date for such
interest, except in the case of Defaulted Interest. The Company may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however the Company will at all times be required to maintain a Paying
Agent in each Place of Payment for each series of Junior Subordinated Debt
Securities.
Any moneys deposited with the Junior Subordinated Indenture Trustee or
any Paying Agent, or then held by the Company in trust, for the payment of the
principal of (and premium, if any) or interest on any Junior Subordinated Debt
Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall, at the request of
the Company, be repaid to the Company and the holder of such Junior Subordinated
Debt Security shall thereafter look, as a general unsecured creditor, only to
the Company for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable Prospectus Supplement, the Company shall
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debt Securities to defer payment of interest for such
number of consecutive interest payment periods as may be specified in the
applicable Prospectus Supplement (each, an "Extension Period"), subject to the
terms, conditions and covenants, if any, specified in such Prospectus
Supplement, PROVIDED that such Extension Period may not extend beyond the Stated
Maturity of such series of Junior Subordinated Debt Securities. Certain United
States Federal income tax consequences and special considerations applicable to
any such Junior Subordinated Debt Securities will be described in the applicable
Prospectus Supplement.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement,
Junior Subordinated Debt Securities will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company may, at its option, redeem the Junior Subordinated Debt Securities of
any series in whole at any time or in part from time to time. Junior
Subordinated Debt Securities in denominations larger than $25 may be redeemed in
part but only in integral multiples of $25. Except as otherwise specified in the
applicable prospectus Supplement, the redemption price for any Junior
Subordinated Debt Security so redeemed shall equal any accrued and unpaid
interest thereon to the redemption date, plus the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement,
if a Junior Subordinated Debt Security Tax Event (as defined below) in respect
of a series of Junior Subordinated Debt Securities shall occur and be
continuing, the Company may, at its option, redeem such series of Junior
Subordinated Debt Securities in whole (but not in part) at any time within 90
days of the occurrence of such Junior Subordinated Debt Security Tax Event, at a
redemption price equal to 100% of the principal amount of such junior
Subordinated Debt Securities then outstanding plus accrued and unpaid interest
to the date fixed for redemption.
"Junior Subordinated Debt Security Tax Event" means the receipt by the
Company of an opinion of counsel experienced in such matters to the effect that,
as a result of any amendment to, or change (including any announced prospective
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change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the applicable series of Junior Subordinated Debt Securities under the Junior
Subordinated Indenture, there is more than an insubstantial risk that interest
payable by the Company on such series of Junior Subordinated Debt Securities is
not, or within 90 days of the date of such opinion will not be, deductible by
the Company, in whole or in part, for United States Federal income tax purposes.
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 Junior Subordinated
Debt Securities to be redeemed at its registered address. Unless the Company
defaults in payment of the redemption price, on and after the redemption date
interest ceases to accrue on such junior Subordinated Debt Securities or
portions thereof called for redemption.
RESTRICTIONS ON CERTAIN PAYMENTS
Unless otherwise specified in the applicable Prospectus Supplement, the
Company will also covenant, as to each series of Junior Subordinated Debt
Securities, that it will not, and will not permit any subsidiary of the Company
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of the Company
(including other Junior Subordinated Debt Securities) that rank PARI PASSU with
or junior in interest to the Junior Subordinated Debt Securities or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks PARI PASSU
or junior in interest to the Junior Subordinated Debt Securities (other than (a)
dividends or distributions in common stock of the Company, (b) redemptions or
purchases of any rights pursuant to any rights plan adopted by the Company, or
any successor to any such rights plan, and the declaration of a dividend of such
rights or the issuance of stock under such plans in the future, (c) payments
under any Guarantee and (d) purchases of common stock related to the issuance of
common stock under any of the Company's benefit plans for its directors,
officers or employees) if at such time (i) there shall have occurred any event
of which the Company has actual knowledge that (a) with the giving of notice or
the lapse of time, or both, would constitute an "Event of Default" under the
Junior Subordinated Indenture with respect to the Junior Subordinated Debt
Securities of such series and (b) in respect of which the Company shall not have
taken reasonable steps to cure, (ii) if such Junior Subordinated Debt Securities
are held by a Liberty Financial Trust of a series of Related Preferred
Securities, the Company shall be in default with respect to its payment of any
obligations under the Guarantee relating to such Related Preferred Securities or
(iii) the Company shall have given notice of its selection of an Extension
Period as provided in the Junior Subordinated Indenture with respect to the
Junior Subordinated Debt Securities of such series and shall not have rescinded
such notice, or such Extension Period, or any extension thereof, shall be
continuing.
MODIFICATION OF JUNIOR SUBORDINATED INDENTURE
From time to time the Company and the Junior Subordinated Indenture
Trustee may, without the consent of the holders of any series of Junior
Subordinated Debt Securities, amend, waive or supplement the Junior Subordinated
Indenture for specified purposes, including, among other things, curing
ambiguities, defects of inconsistencies (provided that any such action does not
materially adversely affect the interest of the holders of any series of Junior
Subordinated Debt Securities or, in the case of Corresponding Junior
Subordinated Debt Securities, the holders of the Related Preferred Securities so
long as they remain
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outstanding) and qualifying, or maintaining the qualification of, the Junior
Subordinated Indenture under the Trust Indenture Act. The Junior Subordinated
Indenture contains provisions permitting the Company and the Junior Subordinated
Indenture Trustee, with the consent of the holders of not less than a majority
in principal amount of each outstanding series of Junior Subordinated Debt
Securities affected, to modify the Junior Subordinated Indenture in a manner
affecting the rights of the holders of such series of the Junior Subordinated
Debt Securities; PROVIDED, that no such modification may, without the consent of
the holder of each outstanding Junior Subordinated Debt Security so affected,
(i) change the Stated Maturity of any series of Junior Subordinated Debt
Securities, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon (except such extension as is
contemplated hereby) or (ii) reduce the percentage of principal amount of Junior
Subordinated Debt Securities of any series, the holders of which are required to
consent to any such modification of the Junior Subordinated Indenture, PROVIDED
that, in the case of Corresponding Junior Subordinated Debt Securities, so long
as any of the Related Preferred Securities remain outstanding, no such
modification may be made that adversely affects the holders of such Preferred
Securities in any material respect, and no termination of the Junior
Subordinated Indenture may occur, and no waiver of any Junior Subordinated Debt
Security Event of Default or compliance with any covenant under the Junior
Subordinated Indenture may be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation preference of such
Related Preferred Securities unless and until the principal of the Corresponding
Junior Subordinated Debt Securities and all accrued and unpaid interest thereon
have been paid in full and certain other conditions are satisfied.
In addition, the Company and the Junior Subordinated Indenture Trustee
may execute, without the consent of any holder of Junior Subordinated Debt
Securities, any supplemental Junior Subordinated Indenture for the purpose of
creating any new series of Junior Subordinated Debt Securities.
JUNIOR SUBORDINATED DEBT SECURITY EVENTS OF DEFAULT
The Junior Subordinated Indenture provides that any one or more of the
following described events with respect to a series of Junior Subordinated Debt
Securities that has occurred and is continuing constitutes a "Junior
Subordinated Debt Security Event of Default" with respect to such series of
Junior Subordinated Debt Securities:
(i) failure for 30 days to pay any interest on such series of the
Junior Subordinated Debt Securities, when due (subject to the deferral of any
due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series of
Junior Subordinated Debt Securities when due whether at maturity, upon
redemption by declaration or otherwise; or
(iii) failure to observe or perform in any material respect certain
other covenants contained in the Junior Subordinated Indenture for 90 days after
written notice to the Company from the Junior Subordinated Indenture Trustee or
the holders of at least 25% in aggregate outstanding principal amount of such
series of outstanding Junior Subordinated Debt Securities; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of
such series of Junior Subordinated Debt Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Junior Subordinated Indenture Trustee. The Junior Subordinated Indenture
Trustee or the holders of not less than 25% in aggregate outstanding principal
amount of
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such series of Junior Subordinated Debt Securities may declare the principal due
and payable immediately upon a Junior Subordinated Debt Security Event of
Default, and, in the case of Corresponding Junior Subordinated Debt Securities,
should the Junior Subordinated Indenture Trustee or such holders of such
Corresponding Junior Subordinated Debt Securities fail to make such declaration,
the holders of at least 25% in aggregate liquidation preference of the Related
Preferred Securities shall have such right. The holders of a majority in
aggregate outstanding principal amount of such series of Junior Subordinated
Debt Securities may annul such declaration and waive the default if the default
(other than the non-payment of the principal of such series of Junior
Subordinated Debt Securities which has become due solely by such acceleration)
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
Junior Subordinated Indenture Trustee. In the case of Corresponding Junior
Subordinated Debt Securities, should the holders of such Corresponding Junior
Subordinated Debt Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate liquidation preference of the
Related Preferred Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities affected thereby may, on behalf of the
holders of all the Junior Subordinated Debt Securities, waive any past default,
except a default in the payment of principal or interest (unless such 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
Junior Subordinated Indenture Trustee) or a default in respect of a covenant or
provision which under the Junior Subordinated Indenture cannot be modified or
amended without the consent of the holder of each outstanding Junior
Subordinated Debt Security. In the case of Corresponding Junior Subordinated
Debt Securities, should the holders of such Corresponding Junior Subordinated
Debt Securities fail to annul such declaration and waive such default, the
holders of a majority in aggregate liquidation preference of the Related
Preferred Securities shall have such right. The Company is required to file
annually with the Junior Subordinated Indenture Trustee a certificate as to
whether or not the Company is in compliance with all the conditions and
covenants applicable to it under the Junior Subordinated Indenture.
In case a Junior Subordinated Debt Security Event of Default shall
occur and be continuing as to a series of Corresponding Junior Subordinated Debt
Securities, the Property Trustee will have the right to declare the principal of
and the interest on such Corresponding Junior Subordinated Debt Securities, and
any other amounts payable under the Junior Subordinated Indenture, to be
forthwith due and payable and to enforce its other rights as a creditor with
respect to such Corresponding Junior Subordinated Debt Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Junior Subordinated Debt Security Event of Default has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal on the related Junior Subordinated Debt Securities
on the date such interest or principal is otherwise payable, a holder of
Preferred Securities may institute a legal proceeding directly against the
Company for enforcement of payment to such holder of the principal of or
interest on such related Junior Subordinated Debt Securities having a principal
amount equal to the aggregate Liquidation Amount of the related Preferred
Securities of such holder (a "Direct Action"). The Company may not amend the
Junior Subordinated Indenture to remove the foregoing right to bring a Direct
Action without the prior written consent of the holders of all of the Preferred
Securities. If the right to bring a Direct Action is removed, the applicable
Issue may become subject to the reporting obligations under the Exchange Act.
The Company shall have the right under the Junior Subordinated Indenture to
set-off any payment made to such holder of Preferred Securities by the Company
in connection with a
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Direct Action. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the related Junior
Subordinated Debt Securities.
The holders of the Preferred Securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Junior Subordinated Debt Securities unless there
shall have been an Event of Default under the Trust Agreement. See "Description
of Preferred Securities--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Junior Subordinated Indenture provides that 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 no Person
shall consolidate with or merge into the Company or convey, transfer or lease
its properties and assets substantially as an entirety to the Company, unless
(i) in case the Company consolidates with or merges into another Person or
conveys or transfers its properties and assets substantially as an entirety to
any Person, the successor Person is organized under the laws of the United
States or any state or the District of Columbia, and such successor Person
expressly assumes the Company's obligations on the Junior Subordinated Debt
Securities issued under the Junior Subordinated Indenture; (ii) immediately
after giving effect thereto, no Junior Subordinated Debt Security Event of
Default, and no event which, after notice or lapse of time or both, would become
a Junior Subordinated Debt Security Event of Default, shall have happened and be
continuing; (iii) in the case of Corresponding Junior Subordinated Debt
Securities, such transaction is permitted under the related Trust Agreement or
Guarantee and does not give rise to any breach or violation of the related Trust
Agreement and Guarantee, and (iv) certain other conditions as prescribed in the
Junior Subordinated Indenture are met.
The general provisions of the Junior Subordinated Indenture do not
afford holders of the Junior Subordinated Debt Securities protection in the
event of a highly leveraged or other transaction involving the Company that may
adversely affect holders of the Junior Subordinated Debt Securities.
SATISFACTION AND DISCHARGE
The Junior Subordinated Indenture provides that when, among other
things, all Junior Subordinated Debt Securities not previously delivered to the
Junior Subordinated Indenture Trustee for cancellation (i) have become due and
payable or (ii) will become due and payable at their Stated Maturity within one
year, and the Company deposits or causes to be deposited with the Junior
Subordinated Indenture Trustee trust funds, in trust, for the purpose and in an
amount in the currency or currencies in which the Junior Subordinated Debt
Securities are payable sufficient to pay and discharge the entire indebtedness
on the Junior Subordinated Debt Securities not previously delivered to the
Junior Subordinated Indenture Trustee for cancellation, for the principal (and
premium, if any) and interest to the date of the deposit or to the Stated
Maturity, as the case may be, then the Junior Subordinated Indenture will cease
to be of further effect (except as to the Company's obligations to pay all other
sums pursuant to the Junior Subordinated Indenture and to provide the officers'
certificates and opinions of counsel described therein), and the Company will be
deemed to have satisfied and discharged the Junior Subordinated Indenture.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement,
the Junior Subordinated Debt Securities of any series may be convertible or
exchangeable into Preferred Securities or other securities. The specific terms
on which Junior Subordinated Debt Securities of any series may be so converted
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or exchanged will be set forth in the applicable Prospectus Supplement. Such
terms may include provisions for conversion or exchange, either mandatory, at
the option of the holder, or at the option of the Company, in which case the
number of shares of Preferred Securities or other securities to be received by
the Holders of Junior Subordinated Debt Securities would be calculated as of a
time and in the manner stated in the applicable Prospectus Supplement.
SUBORDINATION
In the Junior Subordinated Indenture, the Company has covenanted and
agreed that any Junior Subordinated Debt Securities issued thereunder will be
subordinate and junior in right of payment to all Senior Debt to the extent
provided in the Junior Subordinated Indenture. Upon any payment or distribution
of assets to creditors upon any liquidation, dissolution, winding up,
reorganization, assignment for the benefit of creditors, marshaling of assets or
any bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceeding of the Company, the
holders of Senior Debt will first be entitled to receive payment in full of
principal of (and premium, if any) and interest, if any, on such Senior Debt
before the holders of Junior Subordinated Debt Securities or, in the case of
Corresponding Junior Subordinated Debt Securities, the Property Trustee on
behalf of the holders, will be entitled to receive or retain any payment in
respect of the principal of (and premium, if any) or interest, if any, on the
Junior Subordinated Debt Securities.
In the event of the acceleration of the maturity of any Junior
Subordinated Debt Securities, the holders of all Senior Debt outstanding at the
time of such acceleration will be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of Junior Subordinated Debt Securities will be entitled to receive or
retain any payment in respect of the principal of (or premium, if any) or
interest, if any, on the Junior Subordinated Debt Securities.
No payments on account of principal (or premium, if any) or interest,
if any, in respect of the Junior Subordinated Debt Securities may be made if
there shall have occurred and be continuing a default in any payment with
respect to Senior Debt, or an event of default with respect to any Senior Debt
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or 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; and (vi) every
obligation of the type referred to in clauses (i) through (v) 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.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Junior Subordinated
Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same
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or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Junior Subordinated Debt
Securities or to other Debt which is PARI PASSU with, or subordinated to, the
Junior Subordinated Debt Securities; PROVIDED, however, that Senior Debt shall
not be deemed to include (i) any Debt of the Company which when incurred and
without respect to any election under Section 1111(b) of the Bankruptcy Code,
was without recourse to the Company, (ii) any Debt of the Company to any of its
subsidiaries, (iii) Debt to any employee of the Company, (iv) any liability for
taxes, (v) indebtedness or monetary obligations to trade creditors or assumed by
the Company or any of its subsidiaries in the ordinary course of business in
connection with the obtaining of materials or services, and (vi) any other debt
securities issued pursuant to the Junior Subordinated Indenture.
The Company is a non-operating holding company and almost all of the
operating assets of the Company are owned by such subsidiaries. The Company
relies primarily on dividends from such subsidiaries to meet its obligations for
payment of principal and interest on its outstanding debt obligations and
corporate expenses. Accordingly, the Junior Subordinated Debt Securities will be
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries, including liabilities under contracts of insurance and annuities
written by the Company's insurance subsidiaries. Holders of Junior Subordinated
Debt Securities should look only to the assets of the Company for payments of
interest and principal and premium, if any.
The Junior Subordinated Indenture places no limitation on the amount of
additional Senior Debt that may be incurred by the Company. The Company expects
from time to time to incur additional indebtedness constituting Senior Debt.
The Junior Subordinated Indenture provides that the foregoing
subordination provisions, insofar as they relate to any particular issue of
Junior Subordinated Debt Securities, may be changed prior to such issuance. Any
such change would be described in the applicable Prospectus Supplement.
GOVERNING LAW
The Junior Subordinated Indenture and the Junior Subordinated Debt
Securities will be governed by and construed in accordance with the laws of the
State of New York.
INFORMATION CONCERNING THE JUNIOR SUBORDINATED INDENTURE TRUSTEE
The Junior Subordinated Indenture Trustee shall have and be subject to
all the duties and responsibilities specified with respect to an indenture
trustee under the Trust Indenture Act. Subject to such provisions, the Junior
Subordinated Indenture Trustee is under no obligation to exercise any of the
powers vested in it by the Junior Subordinated Indenture at the request of any
holder of Junior Subordinated Debt Securities, unless offered reasonable
indemnity by such holder against the costs, expenses and liabilities which might
be incurred thereby. The Junior Subordinated Indenture Trustee is not required
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of its duties if the Junior Subordinated Indenture Trustee
reasonably believes that repayment or adequate indemnity is not reasonably
assured to it.
CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
The Corresponding Junior Subordinated Debt Securities may be issued in
one or more series of Junior Subordinated Debt Securities under the Junior
Subordinated Indenture with terms corresponding to the terms of a series of
Related Preferred Securities. In that event, concurrently with the issuance of
each Liberty Financial Trust's Preferred Securities, such Liberty Financial
Trust will invest the proceeds thereof and the consideration paid by the Company
for
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the Common Securities in a series of Corresponding Junior Subordinated Debt
Securities issued by the Company to such Liberty Financial Trust. Each series of
Corresponding Junior Subordinated Debt Securities will be in the principal
amount equal to the aggregate stated Liquidation Amount of the Related Preferred
Securities and the Common Securities of such Liberty Financial Trust and will
rank pari passu with all other series of Junior Subordinated Debt Securities.
Holders of the Related Preferred Securities for a series of Corresponding Junior
Subordinated Debt Securities will have the rights in connection with
modifications to the Junior Subordinated Indenture or upon occurrence of Junior
Subordinated Debt Security Events of Default described under "--Modification of
Junior Subordinated Indenture" and "--Junior Subordinated Debt Security Events
of Default", unless provided otherwise in the Prospectus Supplement for such
Related Preferred Securities.
If a Special Event in respect of a Liberty Financial Trust of Related
Preferred Securities shall occur and be continuing, the Company may, at its
option, redeem the Corresponding Junior Subordinated Debt Securities at any time
within 90 days of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of the Junior Subordinated Indenture. The
Redemption price for any Corresponding Junior Subordinated Debt Securities shall
be equal to 100% of the principal amount of such Corresponding Junior
Subordinated Debt Securities then outstanding plus accrued and unpaid interest
to the date fixed for redemption. For so long as the applicable Liberty
Financial Trust is the holder of all the outstanding series of Corresponding
Junior Subordinated Debt Securities, the proceeds of any such redemption will be
used by the Liberty Financial Trust to redeem the corresponding Trust Securities
in accordance with their terms. The Company may not redeem a series of
Corresponding Junior Subordinated Debt Securities in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debt Securities of such series for all interest periods terminating
on or prior to the Redemption Date.
The Company will covenant in the Junior Subordinated Indenture as to
each series of Corresponding Junior Subordinated Debt Securities, that if and so
long as (i) the Liberty Financial Trust of the related series of Trust
Securities is the holder of all such Corresponding Junior Subordinated Debt
Securities, (ii) a Tax Event in respect of Liberty Financial Trust has occurred
and is continuing and (iii) the Company has elected, and has not revoked such
election, to pay Additional Sums (as defined under "Description of Preferred
Securities-- Redemption or Exchange") in respect of such Trust Securities, the
Company will pay to such Liberty Financial Trust such Additional Sums. The
Company will also covenant, as to each series of Corresponding Junior
Subordinated Debt Securities, (i) to maintain directly or indirectly 100%
ownership of the Common Securities of the Liberty Financial Trust to which
Corresponding Junior Subordinated Debt Securities have been issued, provided
that certain successors which are permitted pursuant to the Junior Subordinated
Indenture may succeed to the Company's ownership of the Common Securities, (ii)
not to voluntarily terminate, wind-up or liquidate any Liberty Financial Trust,
except (a) in connection with a distribution of Corresponding Junior
Subordinated Debt Securities to the holders of the Preferred Securities in
liquidation of such Liberty Financial 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 the related Trust Agreement, to cause such Liberty Financial Trust
to remain classified as a grantor trust and not as an association taxable as a
corporation for United States Federal income tax purposes.
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DESCRIPTION OF CAPITAL STOCK
VOTING RIGHTS
The Company's Restated Articles of Organization (the "Restated
Articles") provide that the holders of shares of Common Stock have a right to
vote on all matters submitted to a vote of Liberty Financial stockholders,
except that no person or group other than Liberty Mutual, certain affiliates of
Liberty Mutual, certain employee benefit plans established by Liberty Financial
or certain of its subsidiaries and other persons approved in advance by the
Board of Directors of Liberty Financial shall have the right to vote more than
20% of the combined voting power of Liberty Financial's Voting Stock (as defined
in the Restated Articles and below). Accordingly, assuming such 20% voting
restriction does not apply, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. As of September 9, 1998, Liberty Mutual owned
approximately 72.7% of the outstanding Common Stock.
The provisions in the Restated Articles regarding the 20% voting
restriction are designed to prevent a deemed assignment under the Advisers Act
or the Investment Company Act of investment contracts that Liberty Financial's
subsidiaries have with their clients. The Advisers Act and the Investment
Company define the term "assignment" to include any "direct or indirect
transfer" of "a controlling block of the voting securities" of the issuer's
outstanding voting securities. The Investment Company Act presumes that any
person holding 25% of the voting stock of Liberty Financial "controls" Liberty
Financial. The Restated Articles provide that a person or "group" (which
includes affiliates and associates of a person, as defined in the Restated
Articles) that owns (as defined in the Restated Articles) more than 20% of the
voting shares of Liberty Financial's issued and outstanding capital stock
("Voting Stock") shall have the right to vote not more than 20% of the
outstanding shares of Voting Stock entitled to vote. The remaining shares of
Voting Stock owned by such person or group ("Excludable Shares") shall have no
voting rights and shall not be counted for quorum or stockholder approval
purposes. These provisions do not apply to Liberty Mutual, affiliates of Liberty
Mutual, direct or indirect subsidiaries of Liberty Financial and certain
employee plans established or to be established by Liberty Financial or certain
of its subsidiaries. The Board of Directors of Liberty Financial may approve the
exemption of other persons or groups from the provisions described above. The
foregoing limitation is intended to have the effect of decreasing the chance of
any assignment occurring for purposes of the Advisers Act and the Investment
Company Act, including in connection with future issuances on sales of Common
Stock. However, no assurances can be given that such an "assignment" will not
occur under these or other circumstances.
The 20% voting restriction may be viewed as having the effect of making
more difficult or of discouraging, absent the support of Liberty Mutual, a proxy
contest, a merger or other combination involving Liberty Financial, a tender
offer, an open-market purchase program or other purchase of Common Stock that
could give Liberty Financial stockholders an opportunity to realize a premium
over the then-prevailing market price for their shares. However, given the fact
that Liberty Mutual owns, and will continue to own following the offering
contemplated in this Prospectus, more than 67% of the outstanding Voting Stock,
this effect is not considered significant.
OTHER PROVISIONS PERTAINING TO A CHANGE IN CONTROL
The Restated Articles and Restated By-Laws of Liberty Financial (the
"Restated By-Laws") also contain certain provisions that are intended to enhance
the likelihood of continuity and stability in the composition of the Board of
Directors of Liberty Financial and in the policies formulated by the Board.
These provisions may serve to delay, defer or present a change in control of
Liberty Financial if the Board of Directors determines that such a change in
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control is not in the Company's best interests. These provisions, which are
summarized below, could have the effect of discouraging certain attempts to
acquire Liberty Financial or remove incumbent management even if some or a
majority of Liberty Financial's stockholders deemed such an attempt to be in
their best interest.
Although the Company has elected to be exempt from the statutory
staggered board provisions of Massachusetts General Laws, Chapter 156B ("Chapter
156B"), ss.50A, the Restated Articles provide that, except for Liberty Financial
directors elected by holders of shares of any outstanding series of Preferred
Stock having the right to elect directors, the Liberty Financial directors shall
be elected on a staggered basis. This means that Liberty Financial's Board of
Directors is divided into three classes whose members each serve for staggered
three-year terms, with one class being elected each year.
The Restated Articles and Restated By-Laws contain provisions
concerning the removal of directors and the filling of vacancies. Directors may
be removed only for cause (as defined in the Restated Articles) and only upon
the affirmative vote of the holders of at least 67% of the outstanding shares of
Voting Stock entitled to vote thereon, voting as a single class. The number of
directors may be increased to a maximum of 30 or decreased to a minimum of three
(but only to eliminate vacancies) by a majority of the directors. No decrease in
the number of directors may reduce the term of any incumbent director. A
majority of the remaining directors then in office are empowered to fill any
vacancy on the Board of Directors.
The Restated Articles and Restated By-Laws establish procedures with
regard to the nomination of candidates for election as directors who have not
been nominated by the Company's Board of Directors. In general, notice must be
received by the Company not less than 60 days and no more than 90 days prior to
the applicable stockholder meeting and must contain certain specified
information concerning the persons to be nominated and the stockholder
submitting the proposal. In addition, any such nomination of candidates for
election as a director must be accompanied by a petition signed by at least 100
record holders of capital stock entitled to vote in the election of the
Company's directors, representing in the aggregate at least 1% of the
outstanding Liberty Financial capital stock entitled to vote thereon. The
Restated Articles and Restated By-Laws also establish procedures with regard to
stockholder proposals for bringing business for consideration at stockholder
meetings, which procedures apply to proposals that Liberty Financial
stockholders are entitled to make under applicable law. In general, notice must
be received by the Company not less than 60 days and no more than 90 days prior
to the applicable stockholder meeting and must contain certain specified
information concerning the business desired to be brought before the meeting and
the stockholder submitting the proposal. The Restated By-Laws provide that a
special meeting of stockholders shall be called at the request of stockholders
only upon the application of the holders of shares of Voting Stock representing
at least 67% of the outstanding shares of Voting Stock entitled to vote
generally in the election of directors.
The Board of Directors is permitted pursuant to Massachusetts law and
the Restated Articles to consider special factors when evaluating proposed
tender or exchange offers or certain consolidations, mergers or other
fundamental transactions. These special factors may include, but are not limited
to, social, legal and economic effects upon employees, suppliers, customers and
others having similar relationships with Liberty Financial, the communities in
which the Company conducts its business, and its future prospects.
The affirmative vote of stockholders representing a majority of the
combined voting power of the outstanding shares of Voting Stock, voting as a
single class, is required to amend certain provisions of the Restated Articles
and Restated by-Laws, including the provisions discussed herein concerning the
inability to vote certain shares of Voting Stock defined as Excludable Shares,
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the staggered term of the Board of Directors, the removal of directors, the
filling of vacancies on the Board of Directors and increasing and decreasing the
size of the Board of Directors, the regulation of stockholder nominations of
candidates for election as directors and of stockholder proposals, and the
special factors which may be considered by the Board of Directors in evaluating
tender or exchange offers or certain mergers or fundamental transactions. In
addition, the Restated Articles require the affirmative vote of stockholders
representing a majority of the combined voting power of the outstanding shares
of Voting Stock for adoption, amendment or repeal of the Restated By-laws by the
stockholders.
EXCULPATION AND INDEMNIFICATION FOR OFFICERS AND DIRECTORS
As permitted by Chapter 156B, the Restated Articles contain a provision
which eliminates the personal liability of directors of the Company for monetary
damages for breach of their fiduciary duty of care as a director. Under current
Massachusetts law and the Restated Articles, liability is not eliminated for (i)
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) unlawful payment of dividends or stock
purchases or redemptions pursuant to Section 61 and Section 62 of Chapter 156B,
or (iv) any transaction from which the director derived an improper personal
benefit. The provision does not eliminate a stockholder's right to seek
non-monetary remedies, such as an injunction or rescission, which are equitable,
to redress action taken by directors. However, equitable remedies may not be
available in all situations, and there may be instances in which no effective
equitable remedy is available.
The Restated Articles provide that the Company shall, to the maximum
extent permitted from time to time under Massachusetts law, indemnify any person
who is or was a party or is threatened to be made a party to any threatened,
pending or completed action, suit, proceeding or claim, by reason of the fact
that such person is or was a director, officer, employee or other agent of the
Company and any person who at the request of Liberty Financial is or was serving
as a director, officer, employee or other agent of the Company and any person
who at the request of Liberty Financial is or was serving as a director,
officer, employee or other agent of another organization, including service in
any capacity with respect to employee benefit plans, against expenses (including
attorneys' fees and expenses), judgments, fines, penalties and amounts paid in
settlement incurred in connection with the investigating, preparation to defend
or defense of such action, suit, proceeding or claim. Such indemnification is
not exclusive of other indemnification rights arising under any by-law,
agreement, vote of directors or stockholders or otherwise.
Currently applicable Massachusetts law provides that officers and
directors may receive indemnification from their corporations for actual or
threatened lawsuits, except that indemnification may not be provided for any
person with respect to any matter to which such person has been adjudicated not
to have acted in good faith in the reasonable belief that such person's action
was in the best interest of the corporation or, to the extent that such matter
relates to service with respect to any employee benefit plan, in the best
interest of the participants or beneficiaries of such employee benefit plan.
Massachusetts law further provides that a corporation may purchase
indemnification insurance, such insurance providing indemnification for the
officers and directors whether or not the corporation would have the power to
indemnify them against such liability under the provisions of the Massachusetts
law. Liberty Financial currently maintains such insurance.
CERTAIN OTHER MASSACHUSETTS LAW PROVISIONS
The Restated By-Laws include a provision that will exclude Liberty
Financial from the applicability of Chapter ll0D of the Massachusetts General
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Laws, entitled "Regulation of Control Share Acquisitions." In general, Chapter
110D provides that any stockholder of a corporation subject to this statute who
acquires 20% or more of the outstanding voting stock of a corporation may not
vote such stock unless the stockholders of the corporation so authorize. Either
the Board of Directors of Liberty Financial, by majority vote, or the
stockholders by vote of stockholders representing a majority of the combined
voting power of the outstanding shares of Voting Stock entitled to vote thereon,
voting as a single class, may amend the Restated By-laws at any time to make the
Company subject to this statute prospectively.
The Restated By-Laws also include a provision that excludes Liberty
Financial from the applicability of Chapter 110F of the Massachusetts General
Laws, entitled "Business combinations with Interested Shareholders." Chapter
110F prohibits Massachusetts corporations from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person becomes an interested
stockholder, unless: (a) the interested stockholder obtains the approval of the
board of directors prior to becoming an interested stockholder, or (b) the
interested stockholder acquires 90% of the outstanding voting stock of the
corporation (excluding shares held by certain affiliates of the corporation) at
the time that he becomes an interested stockholder, or (c) the business
combination is approved by both the board of directors and two-thirds of the
outstanding voting stock of the corporation (excluding shares held by the
interested stockholder). Under Chapter 110F an "interested stockholder" is a
person who, together with affiliates and associates, owns (or at any time within
the prior three years did own) 5% or more of a corporation's voting stock. A
"business combination" includes mergers, stock and asset sales and other
transactions resulting in a financial benefit to the stockholders. Under Chapter
110F, the stockholders of the Company may, by amendment to the Restated Articles
or Restated By-Laws, provide that the provisions of Chapter 110F apply to the
Company.
Massachusetts law explicitly permits directors to adopt stockholder
rights plans (so-called "poison pills"). At present, Liberty Financial has no
plans to adopt any such plan, but may do so in the future.
GENERAL PROVISIONS REGARDING COMMON STOCK AND PREFERRED STOCK
The authorized capital stock of Liberty Financial consists of
100,000,000 shares of Common Stock, $.01 par value per share, and 10,000,000
shares of Preferred Stock, $.01 par value per share, of which 324,759 shares
have been designated as Series A Convertible Preferred Stock. The Restated
Articles and Restated By-Laws do not grant the holders of Common Stock any
preemptive, subscription, redemption or conversion rights or the right to
accumulate votes for the election of directors. Subject to prior dividend rights
and preferences of holders of shares of Preferred Stock, if any, holders of
Common Stock are entitled to receive such dividends as may be declared by the
Board of Directors of Liberty Financial from funds legally available therefor.
Holders of Common Stock are entitled to receive ratably such dividends, if any,
as may be declared by the Board of Directors of the Company out of funds,
legally available therefor, subject to any preferential dividend rights of then
outstanding Preferred Stock. Upon the liquidation, dissolution or winding up of
the Company, the holders of Common Stock are entitled to receive ratably the net
assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding Preferred Stock.
The rights, preferences and privileges of holders of Common Stock are subject to
and may be adversely affected by, the rights of the holders of shares of any
series of Preferred Stock which Liberty Financial may designate and issue in the
future.
Under the Restated Articles, the Board of Directors of the Company has
the authority, subject to any limitations prescribed by law, without further
action by or notice to the stockholders, to issue from time to time shares of
Preferred
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Stock in one or more series and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions),
liquidation preferences and the number of shares constituting any series or
designation of such series. The ability of the Board of Directors to issue
additional Preferred Stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to remove current Liberty Financial
management, even if such removal may be in the stockholders' best interest, and
may have the effect of delaying, deterring or preventing a change in control of
Liberty Financial, or of discouraging a third party from acquiring a majority of
its outstanding voting stock. Other than the Preferred Stock described below
issued in connection with the Company's acquisition of Colonial, there are no
outstanding shares of Preferred Stock and the Company has no present plans to
issue any of the Preferred Stock. Shares of Common Stock or Preferred Stock may
be issued in connection with acquisitions by the Company.
The Common Stock is listed on the New York Stock Exchange and the
Boston Stock Exchange.
SUMMARY OF TERMS OF SERIES A CONVERTIBLE PREFERRED STOCK
In connection with the Colonial acquisition, the Company issued an
aggregate of 328,209 shares of Series A Convertible Preferred Stock (the "Series
A Preferred Stock"), of which 324,759 remained outstanding as of September 9,
1998. The Series A Preferred Stock has the following preferences, voting powers,
qualifications, and special or relative rights and privileges (the following
summary is qualified in its entirety by reference to the Certificate of
Designation filed by the Company with the Massachusetts Secretary of State and
included as an Exhibit to the Registration Statement of which this Prospectus is
a part (the "Certificate")).
Dividends. The face amount of each share of Series A Preferred Stock is
$50.00. The holders of shares of the Series A Preferred Stock are entitled to
receive cumulative cash dividends at the rate of $2.875 per annum per share,
payable in equal quarterly installments. Such dividends shall be cumulative from
the date of original issue to and including the date provision for the payment
of liquidation value, or redemption price, as the case may be, plus all then
accrued and unpaid dividends, has been made whether or not such dividends are
declared and whether or note there are profits, surplus or other funds of
Liberty Financial legally available for the payment of dividends. No dividends
may be paid on the Common Stock and no Common Stock may be redeemed,
repurchased, or otherwise acquired by the Company or any of its subsidiaries
unless full cumulative dividends on the shares of Series A Preferred Stock have
been paid or declared in full and sums set aside for the payment thereof.
Redemption. The shares of the Series A Preferred Stock are redeemable
at the option of Liberty Financial and at the price set forth in the Certificate
by resolution of the Board of Directors, in whole or from time to time in part,
at any time on or after March 24, 1998; provided, however, that prior to March
24, 2000 a condition to any such redemption shall be that the Trading Price (as
defined in the Certificate) of the Common Stock shall have exceeded $39.47
(adjusted from time to time for any stock split, stock dividend, combination of
shares, recapitalization or similar event pertaining to the Common Stock) for 20
Trading Days out of the 30 consecutive Trading Days immediately preceding the
date notice of such Redemption is mailed by the Liberty Financial.
Pursuant to a Stockholder Agreement entered into in connection with the
Colonial transaction, at any time during the first sixty days after March 24,
2000, the holder of any shares of Series A Preferred Stock subject to the
Stockholders Agreement may elect to sell to Liberty Mutual, and Liberty Mutual
shall be obligated to purchase, all, but not less than all, of the Series A
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Preferred Stock then owned by such stockholder at a price of $50 per share plus
accrued but unpaid dividends on such shares through the date of purchase.
Liberty Mutual may designate Liberty Financial (without any further action or
approval by Liberty Financial), or any other person, as the purchaser of such
shares, in which event such person shall be required to pay the full purchase
price.
Voting Rights. Each share of Series A Preferred Stock is entitled to
such number of votes as equals the number of shares of Common Stock into which
such share is then convertible. Except as otherwise provided in the Certificate,
or by the Restated Articles, as amended from time to time, or by law, the shares
of Series A Preferred Stock, the shares of Common Stock and any other shares of
Preferred Stock at the time entitled to vote generally shall vote together as
one class on all matters submitted to a vote of stockholders.
Liquidation Rights. In the event of any liquidation, dissolution or
winding up of the affairs of the Company, whether voluntary or otherwise, after
payment or provision for payment of its debts and other liabilities, the holders
of shares of the Series A Preferred Stock shall be entitled to receive, in cash,
out of the remaining net assets of Liberty Financial, the amount of Fifty
Dollars ($50.00) for each share of the Series A Preferred Stock held, plus an
amount equal to all dividends accrued and unpaid on each such share up to and
including the date fixed for distribution, before any distribution shall be made
to the holders of shares of the Common Stock or before the Company shall redeem,
repurchase or otherwise acquire any shares of Common Stock. After the payment of
the full preferential amounts to the holders of shares of the Series A Preferred
Stock or funds necessary for such payment have been set aside in trust for the
holders thereof, such holders shall be entitled to no other or further
participation in the distribution of the assets of Liberty Financial.
Conversion. Holders of shares of the Series A Preferred Stock have the
right, exercisable at any time and from time to time to convert all or any such
shares of the Series A Preferred Stock into shares of Common Stock at a rate of
1.58385 shares of Common Stock for each share of the Series A Preferred Stock so
converted, subject to anti-dilution adjustment from time to time as described in
detail in Section 6 of the Certificate.
Limitations. The Certificate provides that, in addition to any other
rights provided by applicable law, so long as any shares of the Series A
Preferred Stock are outstanding, the Company shall not, without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of the
Series A Preferred Stock, voting separately, create authorize or issue any class
or series of capital stock ranking either as to payment of dividends or
distribution of assets upon liquidation prior to or on a parity with the Series
A Preferred Stock; provided, however, that no such vote of the holders of the
Series A Preferred Stock shall be required if, at or prior to the time when the
issuance of any such shares ranking prior to the Series A Preferred Stock is to
be made or any such change is to take effect, as the case may be, provision is
made for the redemption of all of the then outstanding shares of the Series A
Preferred Stock in accordance with the provisions of the Certificate.
Transfer Agent and Registrar
The transfer agent and the registrar for the Common Stock is Boston
EquiServe.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of
certain provisions of the Deposit Agreement (as defined below) and of the
Depositary Shares and Depositary Receipts summarizes the material terms of the
Deposit
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Agreement and of the Depositary Shares and Depositary Receipts, and is qualified
in its entirety by reference to, the form of Deposit Agreement and form of
Depositary Receipts relating to each series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to have shares of Preferred Stock
be represented by Depositary Shares. The shares of any series of the Preferred
Stock underlying the Depositary Shares will be deposited under a separate
deposit agreement (the "Deposit Agreement") between the Company and a bank or
trust company selected by the Company (the "Preferred Stock Depositary"). The
Prospectus Supplement relating to a series of Depositary Shares will set forth
the name and address of the Preferred Stock Depositary. Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled,
proportionately, to all the rights, preferences and privileges of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion,
exchange and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the Preferred Stock
described in the applicable Prospectus Supplement.
A holder of Depositary Shares will be entitled to receive the shares of
Preferred Stock (but only in whole shares of Preferred Stock) underlying such
Depositary Shares. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the whole number of shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or
other cash distributions in respect to the Preferred Stock to the record holders
of Depositary Receipts in proportion, insofar as possible, to the number of
Depositary Shares owned by such holders.
In the event of a distribution other than in cash in respect to the
Preferred Stock, the Preferred Stock Depositary will distribute property
received by it to the record holders of Depositary Receipts in proportion,
insofar as possible, to the number of Depositary Shares owned by such holders,
unless the Preferred Stock Depositary determines that it is not feasible to make
such distribution, in which case the Preferred Stock Depositary may, with the
approval of the Company, adopt such method as it deems equitable and practicable
for the purpose of effecting such distribution, including sale (at public or
private sale) of such property and distribution of the net proceeds from such
sale to such holders.
The amount so distributed in any of the foregoing cases will be reduced
by any amount required to be withheld by the Company or the Preferred Stock
Depositary on account of taxes.
CONVERSION AND EXCHANGE
If any Preferred Stock underlying the Depositary Shares is subject to
provisions relating to its conversion or exchange as set forth in the Prospectus
Supplement relating thereto, each record holder of Depositary Shares will have
the right or obligation to convert or exchange such Depositary Shares pursuant
to the terms thereof.
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REDEMPTION OF DEPOSITARY SHARES
If Preferred Stock underlying the Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received by
the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of the Preferred Stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the aggregate redemption
price payable with respect to the number of shares of Preferred Stock underlying
the Depositary Shares. Whenever the Company redeems Preferred Stock from the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date a proportionate number of Depositary Shares representing
the shares of Preferred Stock that were redeemed. If less than all of the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot or pro rata as may be determined by the Company.
After the date fixed for redemption, the Depositary Shares so called
for redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by the Company with
the Preferred Stock Depositary for any Depositary Shares which the holders
thereof fail to redeem shall be returned to the Company after a period of two
years from the date such funds are so deposited.
VOTING
Upon receipt of notice of any meeting at which the holders of any
shares of Preferred Stock underlying the Depositary Shares are entitled to vote,
the Preferred Stock Depositary will mail the information contained in such
notice to the record holders of the Depositary Receipts. Each record holder of
such Depositary Receipts on the record date (which will be the same date as of
the record date for the Preferred Stock) will be entitled to instruct the
Preferred Stock Depositary as to the exercise of the voting rights pertaining to
the number of shares of Preferred Stock underlying such holder's Depositary
Shares. The Preferred Stock Depositary will endeavor, insofar as practicable, to
vote the number of shares of Preferred Stock underlying such Depositary Shares
in accordance with such instructions, and the Company will agree to take all
reasonable action which may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will abstain from voting the Preferred Stock to the
extent it does not receive specific written instructions from holders of
Depositary Receipts representing such Preferred Stock.
RECORD DATE
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred Stock,
or (ii) the Preferred Stock Depositary shall receive notice of any meeting at
which holders of Preferred Stock are entitled to vote or of which holders of
Preferred Stock are entitled to notice, or of the mandatory conversion of or any
election on the part of the Company to call for the redemption of any Preferred
Stock, the Preferred Stock Depositary shall in each such instance fix a record
date (which shall be the same as the record date for the Preferred Stock) for
the determination of the holders of Depositary Receipts (x) who shall be
entitled to receive such dividend, distribution, rights, preferences or
privileges or the net proceeds of the sale thereof or (y) who shall be entitled
to give instructions for the exercise of voting rights at any such meeting or to
receive notice of such meeting or of such redemption or conversion, subject to
the provisions of the Deposit Agreement.
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AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt and any provision of the Depositary
Agreement may at any time be amended by agreement between the Company and the
Preferred Stock Depositary. However, any amendment which imposes or increases
any fees, taxes or other charges payable by the holders of Depositary Receipts
(other than taxes and other governmental charges, fees and other expenses
payable by such holders as stated under "Charges of Preferred Stock
Depositary"), or which otherwise prejudices any substantial existing right of
holders of Depositary Receipts, will not take effect as to outstanding
Depositary Receipts until the expiration of 90 days after notice of such
amendment has been mailed to the record holders of outstanding Depositary
Receipts.
Whenever so directed by the Company, the Preferred Stock Depositary
will terminate the Deposit Agreement by mailing notice of such termination to
the record holders of all Depositary Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Preferred Stock
Depositary may likewise terminate the Deposit Agreement if at any time 45 days
shall have expired after the Preferred Stock Depositary shall have delivered to
the Company a written notice of its election to resign and a successor
depositary shall not have been appointed and accepted its appointment. If any
Depositary Receipts remain outstanding after the date of termination, the
Preferred Stock Depositary thereafter will discontinue the transfer of
Depositary Receipts, will suspend the distribution of dividends to the holders
thereof, and will not give any further notices (other than notice of such
termination) or perform any further acts under the Deposit Agreement except as
provided below and except that the Preferred Stock Depositary will continue (i)
to collect dividends on the Preferred Stock and any other distributions with
respect thereto and (ii) to deliver the Preferred Stock together with such
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges or other property, without liability for interest
thereon, in exchange for Depositary Receipts surrendered. At any time after the
expiration of two years from the date of termination, the Preferred Stock
Depositary may sell the Preferred Stock then held by it at public or private
sales, at such place or places and upon such terms as it deems proper and may
thereafter hold the net proceeds of any such sale, together with any money and
other property then held by it, without liability for interest thereon, for the
pro rata benefit of the holders of Depositary Receipts which have not been
surrendered.
CHARGES OF PREFERRED STOCK DEPOSITARY
The Company will pay all charges of the Preferred Stock Depositary
including charges in connection with the initial deposit of the Preferred Stock,
the initial issuance of the Depositary Receipts, the distribution of information
to the holders of Depositary Receipts with respect to matters on which Preferred
Stock is entitled to vote, withdrawals of the Preferred Stock by the holders of
Depositary Receipts or redemption or conversion of the Preferred Stock, except
for taxes (including transfer taxes, if any) and other governmental charges and
such other charges as are expressly provided in the Deposit Agreement to be at
the expense of holders of Depositary Receipts or persons depositing Preferred
Stock.
MISCELLANEOUS
The Preferred Stock Depositary will make available for inspection by
holders of Depositary Receipts at its corporate office and its New York office,
all reports and communications from the Company which are delivered to the
Preferred Stock Depositary as the holder of Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable
if it is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
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Preferred Stock Depositary under the Deposit Agreement are limited to performing
its duties thereunder without negligence or bad faith. The obligations of the
Company under the Deposit Agreement are limited to performing its duties
thereunder in good faith. Neither the Company nor the Preferred Stock Depositary
is obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished.
The Company and the Preferred Stock Depositary are entitled to rely upon advice
of or information from counsel, accountants or other persons believed to be
competent and on documents believed to be genuine.
The Preferred Stock Depositary may resign at any time or be removed by
the Company, effective upon the acceptance by its successor of its appointment;
provided, that if a successor Preferred Stock Depositary has not been appointed
or accepted such appointment within 45 days after the Preferred Stock Depositary
has delivered a notice of election to resign to the Company, the Preferred Stock
Depositary may terminate the Deposit Agreement. See "Amendment and Termination
of Deposit Agreement" above.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants to purchase Debt Securities, Preferred
Stock (or Depositary Shares representing Preferred Stock) or Common Stock
(collectively, the "Underlying Warrant Securities"), and such Warrants may be
issued independently or together with any such Underlying Warrant Securities and
may be attached to or separate from such Underlying Warrant Securities. Each
series of Warrants will be issued under a separate warrant agreement (each a
"Warrant Agreement") to be entered into between the Company and a warrant agent
("Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the warrants of such series and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of
Warrants. The following sets forth certain general terms and provisions of the
Warrants offered hereby. Further terms of the Warrants and the applicable
Warrant Agreement are set forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of any
Warrants in respect of which this Prospectus is being delivered, including the
following: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued; (iv)
the currency or currencies, including composite currencies, in which the price
of such Warrants may be payable; (v) the designation and terms of the Underlying
Warrant Securities purchasable upon exercise of such Warrants may be purchased;
(vii) the date on which the right to exercise such Warrants shall commence and
the date on which such right shall expire; (viii) whether such warrants will be
issued in registered form or bearer form; (ix) if applicable, the minimum or
maximum amount of such Warrants which may be exercised at any one time; (x) if
applicable, the designation and terms of the Underlying Warrant Securities with
which such Warrants are issued and the number of such Warrants issue with each
such Underlying Warrant Security; (xi) if applicable, the date on and after
which such Warrants and the related Underlying Warrant Securities will be
separately transferable; (xii) information with respect to book-entry
procedures, if any; (xiii) if applicable, a discussion of certain United States
federal income tax considerations; and (xiv) any other terms of such Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Warrants.
DESCRIPTION OF PREFERRED SECURITIES OF LIBERTY FINANCIAL TRUSTS
Pursuant to the terms of the Trust Agreement for each Liberty Financial
Trust, the Issuer Trustees on behalf of such Liberty Financial Trust will issue
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the Preferred Securities and the Common Securities. The Preferred Securities of
a particular issue will represent preferred beneficial interests in the Liberty
Financial Trust and the holders thereof will be entitled to a preference in
certain circumstances with respect to Distributions and amounts payable on
redemption or liquidation over the Common Securities of such Liberty Financial
Trust, as well as other benefits as described in the corresponding Trust
Agreement. This summary of certain provisions of the Preferred Securities and
each trust Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of each Trust
Agreement, including the definitions therein of certain terms, and the Trust
Indenture Act. Wherever particular defined terms of a Trust Agreement (as
amended or supplemented from time to time) are referred to herein or in a
Prospectus Supplement, such defined terms are incorporated herein or therein by
reference. The form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Each of the
Liberty Financial Trusts is a legally separate entity and the assets of one not
available to satisfy the obligations of any of the others.
GENERAL
The Preferred Securities of a Liberty Financial Trust will rank pari
passu, and payments will be made thereon PRO RATA, with the Common Securities of
that Liberty Financial Trust except as described under "--Subordination of
Common Securities." Legal title to the Corresponding Junior Subordinated Debt
Securities will be held by the Property Trustee in trust for the benefit of the
holders of the related Preferred Securities and Common Securities. Each
Guarantee Agreement executed by the Company for the benefit of the holders of a
Liberty Financial Trust's Preferred Securities (the "Guarantee" for such
Preferred Securities) will be a guarantee on a subordinated basis with respect
to the related Preferred Securities but will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of such Preferred
Securities when the related Liberty Financial Trust does not have funds on hand
available to make such payments. See "Description of Guarantees."
DISTRIBUTIONS
Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any date
on which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect to any such delay) except that, if such Business Day
is in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or 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 a day on which the corporate trust office of
the Property Trustee or the Junior Subordinated Indenture Trustee (as defined
herein) is closed for business.
Each Liberty Financial Trust's Preferred Securities represent preferred
beneficial interests in the applicable Liberty Financial Trust, and the
Distributions on each Preferred Security will be payable at a rate specified in
the Prospectus Supplement for such Preferred Securities. The amount of
Distributions payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months unless otherwise specified in the applicable
Prospectus Supplement. Distributions to which holders of Preferred Securities
are entitled will accumulate additional Distributions at the rate per annum if
and as specified in the applicable Prospectus Supplement. The term
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"Distributions" as used herein includes any such additional Distributions unless
otherwise stated.
If provided in the applicable Prospectus Supplement, the Company has
the right under the Junior Subordinated Indenture, pursuant to which it will
issue the Corresponding Junior Subordinated Debt Securities, to defer the
payment of interest at any time or from time to time on any series of the
Corresponding Junior Subordinated Debt Securities for a period which will be
specified in such Prospectus Supplement relating to such series (each, an
"Extension Period"), PROVIDED that no Extension Period may extend beyond the
Stated Maturity of the Corresponding Junior Subordinated Debt Securities. As a
consequence of any such extension, Distributions on the corresponding Preferred
Securities would be deferred (but would continue to accumulate additional
Distributions thereon at the rate per annum set forth in the Prospectus
Supplement for such Preferred Securities) by the Liberty Financial Trust which
issues such Preferred Securities during any such Extension Period. During such
Extension period the Company may not, and may not permit any subsidiary of the
Company to, (i) declare or pay an dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or (ii) make any payment or principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank PARI PASSU with or junior in interest to the Corresponding
Junior Subordinated Debt Securities or make any guarantee payments with respect
to any guarantee by the Company of debt securities of any subsidiary of the
Company if such guarantee ranks PARI PASSU or junior in interest to the
Corresponding Junior Subordinated Debt Securities (other than (a) dividends or
distributions in common stock or the Company, (b) payments under any Guarantee
and (c) purchases of common stock related to the issuance of common stock under
any of the Company's benefit plans for its directors, officers or employees).
The revenue of each Liberty Financial Trust available for distribution
to holders of its Preferred Securities will be limited to payments under the
Corresponding Junior Subordinated Debt Securities in which the Liberty Financial
Trust will invest the proceeds from the issuance and sale of its Trust
Securities. See "Description of Junior Subordinated Debt Securities--
Corresponding Junior Subordinated Debt Securities." If the Company does not make
interest payments on such Corresponding Junior Subordinated Debt Securities, the
Property Trustee will not have funds available to pay Distributions on the
Related Preferred Securities. The payment of Distributions (if and to the extent
the Liberty Financial Trust has funds legally available for the payment of such
Distributions and cash sufficient to make such payments) is guaranteed by the
company on a limited basis as set forth herein under "Description of
Guarantees."
Distributions on the Preferred Securities will be payable to the
holders thereof as they appear on the register of such Liberty Financial Trust
on the relevant record dates, which, as long as the Preferred Securities remain
in book-entry form, will be one Business Day prior to the relevant distribution
Date. Subject to any applicable laws and regulations and the provisions of the
applicable Trust Agreement, each such payment will be made as described under
"Book-Entry Issuance." In the event any Preferred Securities are not in
book-entry form, the relevant record date for such Preferred Securities shall be
the date at least 15 days prior to the relevant Distribution Date, as specified
in the applicable Prospectus Supplement.
REDEMPTION OR EXCHANGE
MANDATORY REDEMPTION. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debt Securities, whether at
maturity or upon earlier redemption as provided in the Junior Subordinated
Indenture, the proceeds from such repayment or redemption shall be applied by
the Property Trustee to redeem a Like Amount (as defined below) of the Trust
Securities, upon not less than 30 nor more than 60 days notice, at a redemption
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price (the "Redemption Price") equal to the aggregate Liquidation Amount of such
Trust Securities plus accumulated but unpaid Distributions thereon to the date
of redemption (the "Redemption Date") and the related amount of the premium, if
any, paid by the Company upon the concurrent redemption of such Corresponding
Junior Subordinated Debt Securities. See "Description of Junior Subordinated
Debt Securities--Redemption." If less than all of any series of Corresponding
Junior Subordinated Debt Securities are to be repaid or redeemed on a Redemption
Date, then the proceeds from such repayment or redemption shall be allocated to
the redemption PRO RATA of the related Preferred Securities and the Common
Securities. The amount of premium, if any, paid by the Company upon the
redemption of all or any part of any series of any Corresponding Junior
Subordinated Debt Securities to be repaid or redeemed on a Redemption Date shall
be allocated to the redemption PRO RATA of the related Preferred Securities and
the Common Securities.
The Company will have the right to redeem any series of Corresponding
Junior Subordinated Debt Securities (i) in whole at any time or in part form
time to time, subject to the conditions described under "Description of Junior
Subordinated Debt Securities--Redemption," (ii) at any time, in whole (but not
in part), upon the occurrence of a Tax Event or an Investment Company Event
(each as defined below, a "Special Event") and subject to the further conditions
described under "Description of Junior Subordinated Debt
Securities--Redemption," or (iii) as may be otherwise specified in the
applicable Prospectus Supplement.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF CORRESPONDING JUNIOR
SUBORDINATED DEBT SECURITIES. If a Special Event in respect of a series of
Preferred Securities and Common Securities shall occur and be continuing, the
Company has the right to redeem the Corresponding Junior Subordinated Debt
Securities in whole (but not in part) and thereby cause a mandatory redemption
of such Preferred Securities and Common Securities in whole (but not in part) at
the Redemption Price within 90 days following the occurrence of such Special
Event. At any time, the Company has the right to terminate the related Liberty
Financial Trust and, after satisfaction of the liabilities of creditors of such
Liberty Financial Trust as provided by applicable law, cause such Corresponding
Junior Subordinated Debt Securities to be distributed to the holders of such
Preferred Securities and Common Securities in liquidation of the Liberty
Financial Trust. If the Company does not elect either option described above,
the applicable series of Preferred Securities will remain outstanding and, in
the event a Tax Event has occurred and is continuing, Additional Sums (as
defined below) may be payable on the Corresponding Junior Subordinated Debt
Securities.
EXTENSION OF MATURITY OF CORRESPONDING JUNIOR SUBORDINATED DEBT
SECURITIES. If provided in the applicable Prospectus Supplement, the Company
shall have the right to extend or shorten the maturity of any series of
Corresponding Junior Subordinated Debt Securities at the time that the Company
exercises its right to elect to terminate the related Liberty Financial Trust
and cause such Corresponding Junior Subordinated Debt Securities to be
distributed to the holders of such Preferred Securities and Common Securities in
liquidation of the Liberty Financial Trust, provided that it can extend the
maturity only if certain conditions specified in the applicable Prospectus
Supplement are met at the time such election is made and at the time of such
extension.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by a Liberty
Financial Trust on the outstanding Preferred Securities and Common Securities of
the Liberty Financial Trust shall not be reduced as a result of any additional
taxes, duties and other governmental charges to which such Liberty Financial
Trust has become subject as a result of a Tax Event.
"Investment Company Event" means the receipt by the applicable Liberty
Financial 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
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a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), the applicable Liberty Financial Trust is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the series of Preferred Securities issued by the Liberty Financial
Trust.
"Like Amount" means (i) with respect to a redemption of any series of
Trust Securities, Trust Securities of such series having a Liquidation Amount
(as defined below) equal to that portion of the principal amount of
Corresponding Junior Subordinated Debt Securities to be contemporaneously
redeemed in accordance with the Junior Subordinated Indenture, allocated to the
Common Securities and to the Preferred Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used to
pay the Redemption Price of such Trust Securities, and (ii) with respect to a
distribution of Corresponding Junior Subordinated Debt Securities to holders of
any series of Trust Securities in connection with a dissolution or liquidation
of the related Liberty Financial Trust, Corresponding Junior Subordinated Debt
Securities having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Corresponding Junior Subordinated
Debt Securities are distributed. "Liquidation Amount" means the stated amount of
$25 per Trust Security.
"Tax Event" means the receipt by the applicable Liberty Financial Trust
of an opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) the Liberty Financial Trust is, or will be within 90
days of the date of such opinion, subject to the United States Federal income
tax with respect to income received or accrued on the corresponding series of
Corresponding Junior Subordinated Debt Securities, (ii) interest payable by the
Company on such series of Corresponding Junior Subordinated Debt Securities is
not, or within 90 days of the date of such opinion, will not be, deductible by
the Company, in whole or in part, for United States Federal income tax purposes,
or (iii) the applicable Liberty Financial 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.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debt Securities for any series of Preferred Securities (i)
such series of Preferred Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company ("DTC") or its nominee, as the record holder
of such series of Preferred Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debt Securities to be delivered upon such distribution and (iii) any
certificates representing such series of Preferred Securities not held by DTC or
its nominee will be deemed to represent the Corresponding Junior Subordinated
Debt Securities having a principal amount equal to the stated liquidation
preference of such series of Preferred Securities, and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions on
such series of Preferred Securities until such certificates are presented to the
Administrative Trustees or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debt Securities that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation
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of a Liberty Financial Trust were to occur. Accordingly, the Preferred
Securities that an investor may purchase, or the Corresponding Junior
Subordinated Debt Securities that the investor may receive on dissolution and
liquidation of a Liberty Financial Trust, may trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debt Securities. Redemptions
of the Preferred Securities shall be made and the Redemption Price shall be
payable on each Redemption Date only to the extent that the related Liberty
Financial Trust has funds on hand available for the payment of such Redemption
Price. See also "--Subordination of Common Securities."
If Liberty Financial Trust gives a notice of redemption in respect of
its Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, to the extent funds are available, the Property Trustee will
deposit irrevocably with DTC funds sufficient to pay the applicable Redemption
Price and will give DTC irrevocable instructions and authority to pay the
Redemption Price to the holders of such Preferred Securities. See "Book-Entry
Issuance." If such Preferred Securities are no longer in book-entry form, the
Property Trustee, to the extent funds are available, will irrevocably deposit
with the paying agent for such Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such Preferred Securities.
Notwithstanding the foregoing, distributions payable on or prior to the
Redemption Date for any Preferred Securities called for redemption shall be
payable to the holders of such Preferred Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of the holders of such Preferred Securities so called for redemption will
cease, except the right of the holders of such Preferred Securities to receive
the Redemption Price, but without interest on such Redemption Price, and such
Preferred Securities will cease to be outstanding. In the event that any date
fixed for redemption of Preferred Securities is not a Business Day, then payment
of the Redemption Price payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price in respect of Preferred
Securities called for redemption is improperly withheld or refused and not paid
either by the Liberty Financial Trust or by the Company pursuant to the
Guarantee as described under "Description of Guarantees", Distributions on such
Preferred Securities will continue to accrue at the then applicable rate, from
the Redemption Date originally established by the Liberty Financial Trust for
such Preferred 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.
Subject to applicable law (including, without limitation, United States
Federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debt Securities to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
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liquidation date, as applicable; PROVIDED, HOWEVER, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be a date at least 15 days prior to the
Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities
issued by an issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
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 not more than 60 days prior to the Redemption Date by the Property Trustee
from the outstanding Preferred Securities not previously called for redemption,
by such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $25. The Property Trustee
shall promptly notify the trust registrar in writing of the Preferred Securities
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of each Trust Agreement, unless the context otherwise requires, all
provision 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 which
has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the Redemption Price on the Corresponding Junior Subordinated Debt Securities,
on and after the Redemption Date interest ceases to accrue on such Junior
Subordinated Debt Securities or portions thereof (and distributions cease to
accrue on the Related Preferred Securities or portions thereof) called for
redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Liberty
Financial Trust's Preferred Securities and Common Securities, as applicable,
shall be made PRO RATA based on the Liquidation Amount of such Preferred
Securities and Common Securities; PROVIDED, HOWEVER, that if on any Distribution
Date or Redemption Date a Junior Subordinated Debt Security Event of Default
shall have occurred and be continuing, no payment of any Distribution on, or
Redemption Price of any of the Liberty Financial Trust's Common Securities, and
no other payment on account of the redemption, liquidation or other acquisition
of such Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the Liberty Financial Trust's
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 of the Liberty Financial Trust's outstanding
Preferred Securities then called for redemption, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or Redemption
Price of, the Liberty Financial Trust's Preferred Securities then due and
payable.
In the case of any Event of Default resulting from a Junior
Subordinated Debt Security Event of Default, the Company as holder of such
Liberty Financial Trust's Common Securities will be deemed to have waived any
right to act with respect to any such Event of Default under the applicable
Trust Agreement until the effect of all such Events of Default with respect to
such Preferred Securities have been cured, waived or otherwise eliminated. Until
any such
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Events of Default under the applicable 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 such Preferred
Securities and not on behalf of the Company as holder of the Liberty Financial
Trust's Common Securities, and only the holders of such Preferred Securities
will have the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Liberty Financial Trust shall
automatically terminate upon expiration of its term and shall terminate on the
first to occur of: (i) certain events of bankruptcy, dissolution or liquidation
of the Company; (ii) the distribution of a Like Amount of the Corresponding
Junior Subordinated Debt Securities to the holders of its Trust Securities, if
the Company, as Depositor, has given written direction to the Property Trustee
to terminate such Liberty Financial Trust (which direction is optional and
wholly within the discretion of the Company, as Depositor); (iii) the redemption
of all of the Liberty Financial Trust's Trust Securities following a Special
Event; (iv) redemption of all of the Preferred Securities as described under
"Description of Preferred Securities" --Redemption or Exchange--Mandatory
Redemption", and (v) the entry of an order for the dissolution of the Liberty
Financial Trust by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (v)
above, the Liberty Financial 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 such Liberty Financial Trust
as provided by applicable law, to the holders of such Trust Securities a Like
Amount of the Corresponding Junior Subordinated Debt Securities, unless such
distribution is determined by the Property Trustee not to be practical, in which
event such holders will be entitled to receive out of the assets of the Liberty
Financial Trust available for distribution to holders, after satisfaction of
liabilities to creditors of such Liberty Financial Trust as provided by
applicable law, an amount equal to, in the case of holders of Preferred
Securities, the aggregate of the Liquidation Amount plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Liberty Financial Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by such Liberty Financial Trust on its Preferred Securities shall be paid on a
PRO RATA basis. The holder(s) of such Liberty Financial Trust's Common
Securities will be entitled to receive distributions upon any such liquidation
PRO RATA with the holders of its Preferred Securities, except that if a Junior
Subordinated Debt Security Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities. A
supplemental Indenture may provide that if an early termination occurs as
described in clause (v) above, the Corresponding Junior Subordinated Debt
Securities may be subject to optional redemption in whole (but not in part).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (an "Event of Default") with respect to the Preferred
Securities issued thereunder (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):
(i) the occurrence of a Junior Subordinated Debt Security Event of Default
under the Junior Subordinated Indenture (see "Description of Junior
Subordinated Debt Securities -- Junior Subordinated Debt Security Events
of Default"); or
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(ii) default by the Property Trustee in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period
of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption Price of
any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which
or the breach of which is dealt with in clause (ii) 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 defaulting
Issuer Trustee or Trustees by the holders of at least 25% in aggregate
liquidation preference of the outstanding Preferred Securities of the
applicable Liberty Financial Trust, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" under such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with respect
to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Liberty Financial Trust's
Preferred Securities, the Administrative Trustees and the Company, as Depositor,
unless such Event of Default shall have been cured or waived. The Company, as
Depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under each Trust
Agreement.
If a Junior Subordinated Debt Security Event of Default has occurred
and is continuing, the Preferred Securities shall have a preference over the
Common Securities upon termination of each Liberty Financial Trust as described
above. See "--Liquidation Distribution Upon Termination." The existence of an
Event of Default does not entitle the holders of Preferred Securities to
accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES
Unless a Junior Subordinated Debt Security Event of Default shall have
occurred and be continuing, any Issuer Trustee may be removed at any time by the
holder of the Common Securities. If a Junior Subordinated Debt Security Event of
Default has occurred and is continuing, the Property Trustee and the Delaware
Trustee may be removed at such time by the holders of a majority in Liquidation
Amount of the outstanding Preferred Securities. In no event will the holders of
the Preferred Securities have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested exclusively in the
Company as the holder of the Common Securities. No resignation or removal of an
Issuer Trustee and no appointment of a successor trustee shall be effective
until the acceptance of appointment by the successor trustee in accordance with
the provisions of the applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Company, as the holder of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any
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part of such Trust Property, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the applicable Trust Agreement. In case a Junior Subordinated Debt
Security Event of Default has occurred and is continuing, the Property Trustee
alone shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, 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 corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee under
each Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE LIBERTY FINANCIAL
TRUSTS
Unless otherwise provided in the applicable Prospectus Supplement, a
Liberty Financial Trust may not merge with or into, consolidated, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. A Liberty Financial Trust may, at the request of the Company,
with the consent of the Administrative Trustees and without the consent of the
holders of the Preferred Securities, 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 such Liberty Financial 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 rank the same as the
Preferred Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Company expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Corresponding Junior Subordinated Debt
Securities, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then listed, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance transfer of lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose identical in all material respects to that of the Liberty
Financial Trust, (vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an opinion
from independent counsel to the Liberty Financial Trust experienced in such
matters to the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect, and (b) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Liberty Financial Trust nor such successor entity will be required
to register as an investment company under the Investment Company Act and (viii)
the Company or any permitted successor or assignee owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity
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under the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, a Liberty Financial Trust shall not, except with
the consent of holders of 100% in Liquidation Amount 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 entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Liberty Financial
Trust or the successor entity to be classified as other than a grantor trust for
United States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees --
Amendments and Assignment" and as otherwise required by law and the applicable
Trust Agreement, the holders of the Preferred Securities will have no voting
rights.
Each Trust Agreement may be amended from time to time by the Company,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in such Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under such Trust Agreement, which shall not be inconsistent
with the other provisions of such Trust Agreement, or (ii) to modify, eliminate
or add to any provision of such Trust Agreement to such extent as shall be
necessary to ensure that the Liberty Financial Trust will be classified for
United States Federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that the Liberty Financial
Trust will not be required to register as an "investment company" under the
Investment Company Act; PROVIDED, HOWEVER, that in the case of clause (i), such
action shall not adversely affect in any material respect the interests of any
holder of Trust Securities, and any amendments of such Trust Agreement shall
become effective when notice thereof is given to the holders of Trust
Securities. Each Trust Agreement may be amended by the Issuer Trustees and the
Company with (i) the consent of holders representing not less than a majority
(based upon Liquidation Amounts) of the outstanding Trust 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 affect the Liberty Financial Trust's
status as a grantor trust for United States Federal income tax purposes or the
Liberty Financial Trust's exemption from status as an "investment company" under
the Investment Company Act, provided that without the consent of each holder of
Trust Securities, such 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 of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
So long as any Corresponding Junior Subordinated Debt Securities are
held by the Property Trustee, the Issuer Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Junior Subordinated Indenture Trustee, or executing any trust or power conferred
on the Property Trustee with respect to such Corresponding Junior Subordinated
Debt Securities, (ii) waive a past default that is waivable under Section 513 of
the Junior Subordinated Indenture, (iii) exercise any right to rescind or annul
a declaration that the principal of all the Junior Subordinated Debt Securities
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Junior Subordinated Indenture or such Corresponding Junior
Subordinated Debt Securities, where such consent shall be required, without, in
each case, obtaining the prior approval of the holders of a majority in
aggregate Liquidation Amount of all outstanding Preferred Securities; PROVIDED,
HOWEVER, that where a consent under the Junior Subordinated Indenture would
require the
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consent of each holder of Corresponding Junior Subordinated Debt Securities
affected thereby, no such consent shall be given by the Property Trustee without
the prior consent of each holder of the corresponding Preferred Securities. The
Issuer Trustees shall not revoke any action previously authorized or approved by
a vote of the holders of the Preferred Securities except by subsequent vote of
the holders of the Preferred Securities. The Property Trustee shall notify each
holder of Preferred Securities of any notice of default with respect to the
Corresponding Junior Subordinated Debt Securities. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Liberty Financial
Trust will not be classified as a corporation for United States federal income
tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given
at a meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such holders is to be taken, to
be given to each holder of record of Preferred Securities in the manner set
forth in each Trust Agreement.
No vote or consent of the holders of Preferred Securities will be
required for a Liberty Financial Trust to redeem and cancel its Preferred
Securities in accordance with the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Issuer Trustees or any
affiliate of the or any Issuer Trustees, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part
in the form of one or more Global Preferred Securities that will be deposited
with, or on behalf of, the Depositary identified in the Prospectus Supplement
relating to such series. Unless otherwise indicated in the applicable Prospectus
Supplement for such series, the Depositary will be DTC. Global Preferred
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Preferred Securities represented thereby, a Global Preferred Security
may not be transferred except as a whole by the Depositary for such Global
Preferred Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by the
Depositary or any nominee to a successor Depositary or any nominee of such
successor.
The specific terms of the depositary arrangement with respect to a
series of Preferred Securities will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will generally apply to depositary arrangements.
Upon the insurance of a Global Preferred Security, and the deposit of
such Global Preferred Security with or on behalf of the Depositary, the
Depositary for such Global Preferred Security or its nominee will credit, on its
book-entry registration and transfer system, the respective aggregate
Liquidation Amounts of the individual Preferred Securities represented by such
Global Preferred Securities to the accounts of Participants. Such accounts shall
be designated by the dealers, underwriters or agents with respect to such
Preferred Securities or by the Company if such Preferred Securities are offered
and sold directly by the Company. Ownership of beneficial interests in a Global
Preferred Security
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will be limited to participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Preferred
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of participants
(with respect to interests of persons who hold through Participants). The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Preferred
Security.
So long as the Depositary for a Global Preferred Security, or its
nominee, is the registered owner of such Global Preferred Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Preferred Securities represented by such Global Preferred
Security for all purposes under the Trust Agreement governing such Preferred
Securities. Except as provided below, owners of beneficial interests in a Global
Preferred Security will not be entitled to have any of the individual Preferred
Securities of the series represented by such Global Preferred Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Preferred Securities of such series in definitive form and
will not be considered the owners or holders thereof under the Trust Agreement.
Payments of principal of (and premium, if any) and interest on
individual Preferred Securities represented by a Global Preferred Security
registered in the name of a Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of the
Global Preferred Security representing such Preferred Securities. None of the
Company, the Property Trustee, any Paying Agent, or the Securities Registrar for
such Preferred Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Company expects that the Depositary for a series of Preferred
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
premium or Distributions in respect of a permanent Global Preferred Security
representing any of such Preferred Securities, immediately will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security for such Preferred Securities as shown on the records
of such Depositary or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Preferred Security
held through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name". Such payments will be
the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if
a Depositary for a series of Preferred Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security representing such series of Preferred Securities. In addition, the
Company may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Preferred Securities,
determine not to have any Preferred Securities of such series represented by one
or more Global Preferred Securities and, in such event, will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security or Securities representing such series of Preferred Securities.
Further, if the Company so specifies with respect to the Preferred Securities of
a series, an owner of a beneficial interest in a Global Preferred Security
representing
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Preferred Securities of such series may, on terms acceptable to the Company, the
Property Trustee and the Depositary for such Global Preferred Security, receive
individual Preferred Securities of such series in exchange for such beneficial
interests, subject to any limitations described in the Prospectus Supplement
relating to such Preferred Securities. In any such instance, an owner of a
beneficial interest in a Global Preferred Security will be entitled to physical
delivery of individual Preferred Securities of the series represented by such
Global Preferred Security equal in principal amount to such beneficial interest
and to have such Preferred Securities registered in its name. Individual
Preferred Securities of such series so issued will be issued in denominations,
unless otherwise specified by the Company, of $25 and integral multiples
thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Liberty Financial Trust's Preferred
Securities are not held by the Depositary, such payments shall be made by check
mailed to the address of the holder entitled thereto as such address shall
appear on the Register. Unless otherwise specified in the applicable Prospectus
Supplement, the paying agent (the "Paying Agent") shall initially be the
Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Company. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected
without charge by or on behalf of each Liberty Financial Trust, but upon payment
of any tax or other governmental charges that may be imposed in connection with
any transfer or exchange. The Liberty Financial Trusts will not be required to
register or cause to be registered the transfer of their Preferred Securities
after such Preferred Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in each Trust Agreement and, after such Event of Default,
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the applicable Trust Agreement at the request of any
holder of Preferred Securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby. If no Event
of Default has occurred and is continuing and the Property Trustee is required
to decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any provision
of the applicable Trust Agreement, and the matter is not one on which holders of
Preferred Securities are entitled under such Trust Agreement to vote, then the
Property Trustee shall take such action as is directed by the Company and if not
so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
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MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Liberty Financial Trusts in such a way that no
Liberty Financial Trust will be deemed to be an "investment company" required to
be registered under the Investment Company Act or classified as an association
taxable as a corporation for United States Federal income tax purposes and so
that the Corresponding Junior Subordinated Debt Securities will be treated as
indebtedness of the Company for United States Federal income tax purposes. In
this connection, the Company and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of each Liberty Financial Trust or each Trust Agreement, that the Company and
the Administrative Trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the related Preferred
Securities.
Holders of the Preferred Securities have no preemptive or similar
rights.
No Liberty Financial Trust may borrow money or issue debt or mortgage
or pledge any of its assets.
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DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by the Company concurrently
with the issuance by each Liberty Financial Trust of its Preferred Securities
for the benefit of the holders from time to time of such Preferred Securities.
State Street Bank and Trust Company will act as indenture trustee ("Guarantee
Trustee") under each Guarantee for the purposes of compliance with the Trust
Indenture Act and each Guarantee will be qualified as an indenture under the
Trust Indenture Act. This summary of certain provisions of the Guarantees does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of each Guarantee Agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. The form of
the Guarantee has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. Reference in this summary to Preferred
Securities means that Liberty Financial Trust's Preferred Securities to which a
Guarantee relates. The Guarantee Trustee will hold each Guarantee for the
benefit of the holders of the related Liberty Financial Trust's Preferred
Securities.
GENERAL
The Company will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such Liberty Financial Trust may
have or assert other than the defense of payment. The following payments with
respect to the Preferred Securities, to the extent not paid by or on behalf of
the related Liberty Financial Trust (the "Guarantee Payments"), will be subject
to the Guarantee: (i) any accumulated and unpaid Distributions required to be
paid on such Preferred Securities, to the extent that such Liberty Financial
Trust has funds on hand available therefor at such time, (ii) the Redemption
Price with respect to any Preferred Securities called for redemption to the
extent that such Liberty Financial Trust has funds on hand available therefor at
such time, or (iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of such Liberty Financial Trust (unless the Corresponding Junior
Subordinated Debt Securities are distributed to holders of such Preferred
Securities), the lesser of (a) the Liquidation Distribution and (b) the amount
of assets of such Liberty Financial Trust remaining available for distribution
to holders of Preferred Securities. The Company's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Company to the holders of the applicable Preferred Securities or by causing the
Liberty Financial Trust to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis
of the related Liberty Financial Trust's obligations under the Preferred
Securities, but will apply only to the extent that such related Liberty
Financial Trust has funds sufficient to make such payments, and is not a
guarantee of collection.
If the Company does not make interest payments on the Corresponding
Junior Subordinated Debt Securities held by the Liberty Financial Trust, the
Liberty Financial Trust will not be able to pay Distributions on the Preferred
Securities and will not have funds legally available therefor. Each Guarantee
will rank subordinate and junior in right of payment to all Senior Debt of the
Company. See "--Status of the Guarantees." The Company is a non-operating
holding company and almost all of the operating assets of the Company and its
consolidated subsidiaries are owned by such subsidiaries. The Company relies
primarily on dividends from such subsidiaries to meet its obligations for
payment of principal and interest on its outstanding debt obligations and
corporate expenses. Accordingly, the Company's obligations under the Guarantees
will be effectively subordinated to all existing and future liabilities of the
Company's subsidiaries, and claimants should look only to the assets of the
Company for payments thereunder. The payment of dividends by the Company's
insurance company subsidiaries is limited under the insurance holding company
laws in which such
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subsidiaries are domiciled. See "Liberty Financial Companies Inc." Except as
otherwise provided in the applicable Prospectus Supplement, the Guarantees do
not limit the incurrence or issuance of other secured or unsecured debt of the
Company, whether under the Indenture, any other indenture that the Company may
enter into in the future or otherwise. See the Prospectus Supplement relating to
any offering of Preferred Securities.
The Company's obligations described herein and in any accompanying
Prospectus Supplement, through the applicable Guarantee, the applicable Trust
Agreement, the Junior Subordinated Debt Securities, the Junior Subordinated
Indenture and any supplemental indentures thereto, and the Expense Agreement,
taken together, constitute a full, irrevocable and unconditional guarantee by
the Company of payments due on the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee of the Liberty Financial Trust's obligations under the Preferred
Securities. See "The Liberty Financial Trusts," "Description of Preferred
Securities," and "Description of Junior Subordinated Debt Securities."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company
and will rank subordinate and junior in right of payment to all Senior Debt.
Each Guarantee will rank PARI PASSU with all other Guarantees issued by
the Company. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held for the benefit of the holders of the related Preferred
Securities. Each Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by the Liberty Financial Trust
or upon distribution to the holders of the Preferred Securities of the
Corresponding Junior Subordinated Debt Securities. None of the Guarantees places
a limitation on the amount of additional Senior Debt that may be incurred by the
Company. The Company expects from time to time to incur additional indebtedness
constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely
affect the rights of holders of the related Preferred Securities (in which case
no vote will be required), no Guarantee may be amended without the prior
approval of the holders of not less than a majority of the aggregate Liquidation
Amount of such outstanding Preferred Securities. The manner of obtaining any
such approval will be as set forth under "Description of the Preferred
Securities--Voting Rights; Amendment of Each Trust Agreement." All guarantees
and agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the related Preferred Securities then outstanding.
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EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
the Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation amount of the
related 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 such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under such Guarantee without
first instituting a legal proceeding against the Liberty Financial Trust, the
Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance
of a default by the Company in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by any Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect
upon full payment of the Redemption Price of the related Preferred Securities,
upon full payment of the amounts payable upon liquidation of the related Liberty
Financial Trust or upon distribution of Corresponding Junior Subordinated Debt
Securities to the holders of the related Preferred Securities. Each Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of the related Preferred Securities must restore payment of
any sums paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement entered into by the Company under
each Trust Agreement (the "Expense Agreement"), the Company will irrevocably and
unconditionally guarantee to each person or entity to whom the Liberty Financial
Trust becomes indebted or liable, the full payment of any costs, expenses or
liabilities of the Liberty Financial Trust, other than obligations of the
Liberty Financial Trust to pay to the holders of any Preferred Securities or
other similar interests in the Liberty Financial Trust of the amounts due such
holders pursuant to the terms of the Preferred Securities or such other similar
interests, as the case may be.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock at a future date or dates.
The price per share of Common Stock may be fixed at the time the Stock Purchase
Contracts are issued or may be determined by reference to a specific formula set
forth in the Stock Purchase Contracts. The Stock Purchase Contracts may be
issued separately or as a part of units ("Stock Purchase Units") consisting of a
Stock Purchase Contract and either (x) Senior Debt Securities, Subordinated Debt
Securities or Junior Subordinated Debt Securities, (y) debt obligations of third
parties, including U.S. Treasury securities, or (z) Preferred Securities of a
Liberty Financial Trust, securing the holder's obligations to purchase the
Common Stock under the Stock Purchase Contracts. The Stock Purchase Contracts
may require the Company to make periodic payments to the holders of the Stock
Purchase Unites or vice versa, and such payments may be unsecured or prefunded
on some basis. The Stock Purchase Contracts may require holders to secure their
obligations thereunder in a specified manner and in certain circumstances the
Company may deliver newly issued prepaid stock purchase contracts ("Prepaid
Securities") upon release to a holder of any collateral securing such holder's
obligations under the original Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any
Stock Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to be
complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, the collateral arrangements and depositary arrangements, if
applicable, relating to such Stock Purchase Contracts or Stock Purchase Units
and, if applicable, the Prepaid Securities and the document pursuant to which
such Prepaid Securities will be issued.
BOOK-ENTRY ISSUANCE
Depository Trust Company ("DTC") will act as securities depositary for
all of the Preferred Securities and the Junior Subordinated Debt Securities,
unless otherwise referred to in the Prospectus Supplement relating to an
offering of Preferred Securities or Junior Subordinated Debt Securities. The
Preferred Securities and the Junior Subordinated Debt Securities will be issued
only as fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered global certificates will be issued for
the Preferred Securities of each Liberty Financial Trust and the Junior
Subordinated Debt Securities, representing in the aggregate the total number of
such Liberty Financial Trust's Preferred Securities or aggregate principal
balance of Junior Subordinated Debt Securities, respectively, and will be
deposited with DTC.
DTC is a limited purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others such as securities brokers and
dealers, banks and trust companies that clear through or maintain custodial
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relationships with Direct Participants, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Commission.
Purchase of Preferred Securities or Junior Subordinated Debt Securities
within the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated Debt
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security and each Junior Subordinated Debt Security ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from DTC of
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Preferred Securities or Junior
Subordinated Debt Securities. Transfers of ownership interests in the Preferred
Securities or Junior Subordinated Debt Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Preferred Securities or Junior Subordinated Debt Securities, except
in the event that use of the book-entry system for the Preferred Securities of
such Liberty Financial Trust or Junior Subordinated Debt Securities is
discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debt Securities; DTC's records reflect only
the identity of the Direct Participants to whose accounts such Preferred
Securities or Junior Subordinated Debt Securities are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications buy DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder
of the Preferred Securities or Junior Subordinated Debt Securities. If less than
all of a Liberty Financial Trust's Preferred Securities or the Junior
Subordinated Debt Securities are being redeemed, DTC's current practice is to
determine by lot the amount of the interest of each Direct Participant to be
redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debt Securities is limited to the holders of record of the
Preferred Securities or Junior Subordinated Debt Securities, in those instances
in which a vote is required, neither the DTC nor Cede & Co. will itself consent
or vote with respect to Preferred Securities or Junior Subordinated Debt
Securities. Under its usual procedures, DTC would mail an omnibus proxy (the
"Omnibus Proxy") to the relevant Trustee as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to
those Direct Participants to whose accounts such Preferred Securities or Junior
Subordinated Debt Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities or the Junior
Subordinated Debt Securities will be made by he relevant Trustee to DTC. DTC's
practice is to credit Direct Participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
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Participant and not of DTC, the relevant Trustee, the Liberty Financial Trust
thereof or the Company, subject to any statutory regulatory requirements as may
be in effect from time to time. Payment of Distributions to DTC is the
responsibility of the relevant Trustee, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursements of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depositary
with respect to any of the Preferred Securities or the Junior Subordinated Debt
Securities at any time by giving reasonable notice to the relevant Trustee and
the Company. In the event that a successor securities depositary is not
obtained, definitive Preferred Security or Junior Subordinated Debt Security
certificates representing such Preferred Securities or Junior Subordinated Debt
Securities are required to be printed and delivered. The Company, at its option,
may decide to discontinue use of the system of book-entry transfers through DTC
(or a successor depositary). After a Junior Subordinated Debt Security Event of
Default, the holders of a majority in liquidation preference of Preferred
Securities or aggregate principal amount of Junior Subordinated Debt Securities
may determine to discontinue the system of book-entry transfers through DTC. In
any such event, definitive certificates for such Preferred Securities or Junior
Subordinated Debt Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Liberty Financial Trusts and the
Company believe to be accurate, but the Liberty Financial Trusts and the Company
assume no responsibility for the accuracy thereof. Neither the Liberty Financial
Trusts nor the Company has any responsibility for the performance by DTC or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operations.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred
Securities (to the extent the Liberty Financial Trust has funds available for
the payment of such Distributions) are irrevocably guaranteed by the Company as
and to the extent set forth under "Description of Guarantees." Taken together,
the Company's obligations under each series of Junior Subordinated Debt
Securities, the Junior Subordinated Indenture, the related Trust Agreement, the
related Expense Agreement, and the related Guarantee provide, in the aggregate,
a full, irrevocable and unconditional guarantee of payments of distributions and
other amounts due on the related series of Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Liberty Financial Trust's obligations under the
Preferred Securities. If and to the extent that the Company does not make
payments on any series of Corresponding Junior Subordinated Debt Securities,
such Liberty Financial Trust will not pay Distributions or other amounts due on
its Preferred Securities. The Guarantees do not cover payment of Distributions
when the related Liberty Financial Trust does not have sufficient funds to pay
such Distributions. In such event, the remedy of a holder of a series of
Preferred Securities is to institute a legal proceeding directly against the
Company for enforcement of payment of such Distributions to such holder. The
obligations of the Company under each Guarantee are subordinate and junior in
right of payment to all Senior Debt of the Company.
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SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debt Securities, such payments
will be sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debt Securities will be equal
to the sum of the aggregate stated Liquidation Amount of the Related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated Debt
Securities will match the Distribution rate and Distribution and other payment
dates for the related Preferred Securities; (iii) the Company shall pay for all
and any costs, expenses and liabilities of such Liberty Financial Trust except
the Liberty Financial Trust's obligations to holders of its Preferred Securities
under such Preferred Securities; and (iv) each Trust Agreement further provides
that the Liberty Financial Trust will not engage in any activity that is not
consistent with the limited purposes of such Liberty Financial Trust.
Notwithstanding anything to the contrary in the Junior Subordinated
Indenture, the Company has the right to set-off any payment it is otherwise
required to make thereunder with and to the extent the Company has theretofore
made, or is concurrently on the date of such payment making, a payment under the
related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any related Preferred Security may institute a legal
proceeding directly against the Company to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Liberty Financial Trust or any other person or entity.
A default or event of default under any Senior Debt of the Company
would not constitute a default or Event of Default. However, in the event of
payment defaults under, or acceleration of, Senior Debt of the Company, the
subordination provisions of the Junior Subordinated Indenture provide that no
payments may be made in respect of the Corresponding Junior Subordinated Debt
Securities until such Senior Debt has been paid in full or any payment default
thereunder has been cured or waived. Failure to make required payments on any
series of Corresponding Junior Subordinated Debt Securities would constitute an
Event of Default.
LIMITED PURPOSE OF LIBERTY FINANCIAL TRUSTS
Each Liberty Financial Trust's Preferred Securities evidence a
beneficial interest in such Liberty Financial Trust, and each Liberty Financial
Trust exists for the sole purpose of issuing its Preferred Securities and Common
Securities and investing the proceeds thereof in Corresponding Junior
Subordinated Debt Securities. A principal difference between the rights of a
holder of a Preferred Security and a holder of a Corresponding Junior
Subordinated Debt Security is that a holder of a Corresponding Junior
Subordinated Debt Security is entitled to receive from the Company the principal
amount of and interest accrued on Corresponding Junior Subordinated Debt
Securities held, while a holder of a Preferred Securities is entitled to receive
Distributions from such Liberty Financial Trust (or from the Company under the
applicable Guarantee) if and to the extent such Liberty Financial Trust has
funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or
liquidation of any Liberty Financial Trust involving the liquidation of the
Corresponding Junior Subordinated Debt Securities, the holders of the related
Preferred
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Securities will be entitled to receive, out of assets held by such Liberty
Financial Trust, the Liquidation Distribution in cash. See "Description of
Preferred Securities--Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Corresponding Junior Subordinated Debt Securities,
would be a subordinated creditor of the Company, subordinated in right of
payment to all Senior Debt, but entitled to receive payment in full of principal
and interest, before any stockholders of the Company receive payments or
distributions. Since the Company is the guarantor under each Guarantee and has
agreed to pay for all costs, expenses and liabilities of each Liberty Financial
Trust (other than the Liberty Financial Trust's obligations to the holders of
its Preferred Securities), the positions of a holder of such Preferred
Securities and a holder of such Corresponding Junior Subordinated Debt
Securities relative to other creditors and to stockholders of the Company in the
event of liquidation or bankruptcy of the Company are expected to be
substantially the same.
PLAN OF DISTRIBUTION
The Company and/or any Liberty Financial Trust may sell any of the
Offered Securities in any one or more of the following ways from time to time:
(i) through agents; (ii) to or through underwriters; (iii) through dealers; or
(iv) directly to purchasers.
The Prospectus Supplement with respect to the Offered Securities will
set forth the terms of the offering of the Offered Securities, including the
name or names of any underwriters, dealers or agents; the purchase price of the
Offered Securities and the proceeds to the Company and/or a Liberty Financial
Trust from such sale; any underwriting discounts and commissions or agency fees
and other items constituting underwriters' or agents' compensation; any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers and any securities exchange on which such Offered Securities may
be listed. Any initial public offering price, discounts or concessions allowed
or reallowed or paid to dealers and any securities exchange on which such
Offered Securities may be listed. Any initial public offering price, discounts
or concessions allowed or reallowed or paid to dealers may be changed from time
to time.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at prevailing market prices at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
Offers to purchase Offered Securities may be solicited by agents
designated by the Company from time to time. Any such agent involved in the
offer or sale of the Offered Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company and/or the
applicable Liberty Financial Trust to such agent will be set forth, in the
applicable Prospectus Supplement. Unless otherwise indicated in such Prospectus
Supplement, any such agent will be acting on a reasonable best efforts basis for
the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of the Offered
Securities so offered and sold.
If Offered Securities are sold by means of an underwritten offering,
the Company and/or the applicable Liberty Financial Trust will execute an
underwriting agreement with an underwriter or underwriters at the time an
agreement for such sale is reached, and the names of the specific managing
underwriter or underwriters, as well as any other underwriters, and the terms of
the transaction, including commissions, discounts and any other compensation of
the underwriters and dealers, if any, will be set forth in the Prospectus
Supplement which will be used by the underwriters to make resales of the Offered
Securities in respect of which this Prospectus is delivered to the public. If
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underwriters are utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, the Offered Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at fixed public
offering prices or at varying prices determined by the underwriter at the time
of sale. Offered Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by the
managing underwriters. If any underwriter or underwriters are utilized in the
sale of the Offered Securities, unless otherwise indicated in the Prospectus
Supplement, the underwriting agreement will provide that the obligations of the
underwriters are subject to certain conditions precedent and that the
underwriters with respect to a sale of Offered Securities will be obligated to
purchase all such Offered Securities of a series if any are purchased.
If a dealer is utilized in the sales of the Offered Securities in
respect of which this Prospectus is delivered, the Company and/or the applicable
Liberty Financial Trust will sell such Offered Securities to the dealer as
principal. The dealer may then resell such Offered Securities to the public at
varying prices to be determined by such dealer at the time of resale. Any such
dealer may be deemed to be an underwriter, as such term is defined in the
Securities Act, of the Offered Securities so offered and sold. The name of the
dealer and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Offers to purchase Offered Securities may be solicited directly by the
Company and/or the applicable Liberty Financial Trust and the sale thereof may
be made by the Company and/or the applicable Liberty Financial Trust directly to
institutional investors or others, who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales will be described in the Prospectus Supplement relating
thereto.
Agents, underwriters and dealers may be entitled under relevant
agreements to indemnification or contribution by the Company and/or the
applicable Liberty Financial Trust against certain liabilities, including
liabilities under the Securities Act.
Agents, underwriters and dealers may be customers of, engage in
transactions with, or perform services for, the Company and its subsidiaries in
the ordinary course of business.
Offered Securities may also be offered and sold, if so indicated in the
applicable Prospectus Supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for the Company and/or the applicable
Liberty Financial Trust. Any remarketing firm will be identified and the terms
of its agreement, if any, with its compensation will be described in the
applicable Prospectus Supplement. Remarketing firms may be deemed to be
underwriters, as such term is defined in the Securities Act, in connection with
the Offered Securities remarketed thereby. Remarketing firms may be entitled
under agreements which may be entered into with the Company and/or the
applicable Liberty Financial Trust to indemnification or contribution by the
Company and/or the applicable Liberty Financial Trust against certain civil
liabilities, including liabilities under the Securities Act, and may be
customers of, engage in transactions with or perform services for the Company
and its subsidiaries in the ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Company
and/or the applicable Liberty Financial Trust may authorize agents, underwriters
or dealers to solicit offers by certain types of institutions to purchase
Offered Securities from the Company and/or the applicable Liberty Financial
Trust at the
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public offering prices set forth in the applicable Prospectus Supplement
pursuant to delayed delivery contracts providing for payment and delivery on a
specified date or dates in the future. A commission indicated in the applicable
Prospectus Supplement will be paid to underwriters, dealers and agents
soliciting purchases of Offered Securities pursuant to any such delayed
contracts accepted by the Company and/or the applicable Liberty Financial Trust.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement,
certain legal matters will be passed upon for the Company and the Liberty
Financial Trusts by Choate, Hall & Stewart (a partnership including professional
corporations), Boston, Massachusetts, counsel to the Company, and for the
Liberty Financial Trusts by Richards, Layton & Finger, Wilmington, Delaware,
special Delaware counsel to the Liberty Financial Trusts. Certain legal matters
in connection with the Offered Securities will be passed upon for the
underwriter(s), dealer(s) or agent(s) by Brown & Wood LLP, New York New York.
EXPERTS
The consolidated financial statements and schedules of Liberty
Financial Companies, Inc. and subsidiaries appearing in the Company's Annual
Report on Form 10-K at and for the two years ended December 31, 1997 have been
audited by Ernst & Young LLP, independent auditors, and for the year ended
December 31, 1995 have been audited by KPMG Peat Marwick, LLP, independent
auditors, as set forth in their respective reports thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
schedules are incorporated herein by reference in reliance upon such report
given upon the authority of such firms as experts in accounting and auditing.
61
<PAGE>
=======================================
You should rely only on the
information contained in or
incorporated by reference in this
Prospectus or any Supplement hereto.
We have authorized no one to provide
you with different information.
We are not making an offer of these
securities in any location where the
offer is not permitted.
You should not assume that the
information in this Prospectus,
including information incorporated by
reference, is accurate as of any date
other than the date on the front of
the Prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Where You Can Find More
Information......................
Certain Information Regarding
the Offering.....................
Liberty Financial Companies, Inc...
The Liberty Financial Trusts.......
Special Note Regarding
Forward-Looking Statements.......
Consolidated Ratios of Earnings
to Fixed Charges and Earnings
to Combined Fixed Charges
and Preferred Stock Dividends....
Use of Proceeds....................
Description of the Senior
Debt Securities..................
Description of the Junior
Subordinated Debt Securities.......
Description of Capital Stock.......
Description of Depositary Shares...
Description of Warrants............
Description of Preferred
Securities of Liberty
Financial Trusts..................
Description of Stock
Purchase Contracts
and Stock Purchase Units.........
Description of Guarantees..........
Plan of Distribution...............
Legal Matters......................
Experts............................
=======================================
</TABLE>
=======================================
$800,000,000
LIBERTY FINANCIAL COMPANIES, INC.
Debt Securities, Preferred Stock,
Common Stock, Depositary Shares
Warrants Stock Purchase Contracts
and Stock Purchase Units of
LIBERTY FINANCIAL COMPANIES, INC.
Trust Preferred Securities of
LIBERTY FINANCIAL CAPITAL TRUST I
LIBERTY FINANCIAL CAPITAL TRUST II
PROSPECTUS
, 1998
======================================
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses (other than underwriting
discounts and commissions) expected to be incurred in connection with the
Offering described in this Registration Statement.
<TABLE>
<S> <C>
SEC Registration Fee.............................................. $236,000
Blue sky fees and expenses (including legal fees)................. $5,000*
Legal fees and expenses........................................... $150,000*
Indenture trustee's fee and expense............................... $20,000*
Accounting fees and expenses...................................... $50,000*
Printing and engraving expenses................................... $20,000*
Miscellaneous..................................................... $20,000*
----------
Total Expenses........................................... $501,000*
==========
</TABLE>
||
* Estimated
Item 15. Indemnification of Directors and Officers.
Section 67 of chapter 156B of the Massachusetts General Laws provides
that a corporation may indemnify its directors and officers to the extent
specified in or authorized by (i) the articles of organization, (ii) a by-law
adopted by the stockholders, or (iii) a vote adopted by the holders of a
majority of the shares of stock entitled to vote on the election of director. In
all instances, the extent to which a corporation provides indemnification to its
directors and officers under Section 67 is optional. In its Restated Articles of
Organization, the Company has elected to commit to provide indemnification to
its directors and officers in specified circumstances. Generally, the Restated
Articles of Organization provide that the Company shall indemnify directors and
officers of the Company against liabilities and expenses arising out of legal
proceedings brought against them by reason of their status as directors or
officers or by reason of their agreeing to serve, at the request of the Company,
as a director or officer with another organization. Under this provision, a
director or officer of the Company shall be indemnified by the Company for all
costs and expenses (including attorneys' fees), judgments, liabilities and
amounts paid in settlement of such proceedings, even if he is not successful on
the merits, if he acted in good faith in the reasonable belief that his action
was in the best interest of the Company. The Board of Directors may authorize
advancing litigation expenses to a director or officer at his request upon
receipt of an undertaking by any such director or officer to repay such expenses
if it is ultimately determined that he is not entitled to indemnification for
such expense.
Article 6 of the Company's Restated Articles of Organization eliminates
the personal liability of the Company's directors to the Company or its
stockholders for monetary damages for breach of a director's fiduciary duty,
II-1
<PAGE>
except to the extent that Chapter 156B of the Massachusetts General Laws
prohibits the elimination or limitation of such liability.
Section of the Purchase Agreement provides that the Underwriters are
obligated, under certain circumstances, to indemnify the Registrants, and
directors, officers and controlling persons against certain liabilities,
including liabilities under the Securities Act. Reference is made to the form of
Purchase Agreement filed as Exhibit 1.1 hereto.
In addition, pursuant to an Intercompany Agreement (the "Intercompany
Agreement") between the Company and Liberty Mutual, the Company will indemnify
Liberty Mutual, its subsidiaries (other than the Company and its subsidiaries),
and each of their respective officers, directors, employees, and agents, against
losses from third-party claims based on, arising out of or resulting from (i)
the activities of the Company or its subsidiaries (including without limitation
liabilities under the Securities Act, the Exchange Act and other securities
laws) and (ii) any other acts or omissions arising out of performance of the
Intercompany Agreement.
The Company maintains directors' and officers' liability insurance for
the benefit of its directors and certain of its officers.
Under each Trust Agreement, the Company will agree to indemnify each of
the Trustees of the Liberty Financial Trust or any predecessor Trustee for the
Liberty Financial Trust, and to hold the Trustee harmless against, any loss,
damage, claims, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the Trust Agreements, 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 under the Trust Agreements.
Item 16. Exhibits.
See Index to Exhibits immediately preceding the Exhibits included as
part of this Registration Statement.
Item 17. Undertakings.
(a) 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; notwithstanding the foregoing, any
increase or decrease in 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 Commission 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
"Calculation of Registration Fee" table in the effective registration
statement;
II-2
<PAGE>
(iii) 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 paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and 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 Commission by the
Registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrants' annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) If the securities to be registered are to be offered at competitive
bidding, the undersigned registrants hereby undertake: (1) to use its best
efforts to distribute prior to the opening of bids, to prospective bidders,
underwriters, and dealers, a reasonable number of copies of a prospectus which
at that time meets the requirements of Section 10(a) of the Act, and relating to
the securities offered at competitive bidding, as contained in the Registration
Statement, together with any supplements thereto, and (2) to file an amendment
to the Registration Statement reflecting the results of bidding, the terms of
the reoffering and related matters to the extent required by the applicable
form, not later than the first use, authorized by the issuer after the opening
of bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the issuer and
no reoffering of such securities by the purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
II-3
<PAGE>
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
(e) The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(f) The undersigned registrants hereby undertake to file, if necessary,
an application for the purpose of determining the eligibility of the Trustee to
act under subsection (a) of Section 310 of the Trust Indenture Act of 1939, as
amended, in accordance with the rules and regulations prescribed by the
Securities and Exchange Commission under Section 305(b)(2) of such Act.
(g) The undersigned registrants hereby undertake to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Liberty Financial Companies, Inc. certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston in The
Commonwealth of Massachusetts on September 14, 1998.
LIBERTY FINANCIAL COMPANIES, INC.
By: /s/ Kenneth R. Leibler
-----------------------------------
Kenneth R. Leibler
Chief Executive Officer,
President and Director
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Liberty Financial
Companies, Inc., hereby severally constitute and appoint Kenneth R. Leibler,
John A. Benning and James A. Hilbert, and each of them singly, our true and
lawful attorneys, with full power to them and each of them singly, to sign for
us in our names in the capacities indicated below, all pre-effective and
post-effective amendments to this Registration Statement, and generally to do
all things in our names and on our behalf in such capacities to enable Liberty
Financial Companies, Inc., to comply with the provisions of the Securities Act
of 1933, as amended, and all requirements of the Securities and Exchange
Commission.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Kenneth R. Leibler
- ---------------------------- Chief Executive Officer, September 14, 1998
Kenneth R. Leibler President and Director
/s/ James A. Hilbert
- ---------------------------- Senior Vice President, September 14, 1998
James A. Hilbert Chief Financial Officer
and Treasurer
/s/ Gary L. Countryman
- ---------------------------- Chairman and Director September 14, 1998
Gary L. Countryman
/s/ Gerald E. Anderson Director September 14, 1998
- ----------------------------
Gerald E. Anderson
/s/ Michael J. Babcock Director September 14, 1998
- ----------------------------
Michael J. Babcock
/s/ Paul J. Darling, II Director September 14, 1998
- ----------------------------
Paul J. Darling, II
/s/ David F. Figgins Director September 14, 1998
- ----------------------------
David F. Figgins
II-5
<PAGE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ John B. Gray
- ---------------------------- Director September 14, 1998
John B. Gray
/s/ John P. Hamill
- ---------------------------- Director September 14, 1998
John P. Hamill
/s/ Marian L. Heard
- ---------------------------- Director September 14, 1998
Marian L. Heard
/s/ Raymond H. Hefner, Jr.
- ---------------------------- Director September 14, 1998
Raymond H. Hefner, Jr.
/s/ Edmund F. Kelly
- ---------------------------- Director September 14, 1998
Edmund F. Kelly
/s/ Sabino Marinella
- ---------------------------- Director September 14, 1998
Sabino Marinella
/s/ Thomas J. May
- ---------------------------- Director September 14, 1998
Thomas J. May
/s/ Ray B. Mundt
- ---------------------------- Director September 14, 1998
Ray B. Mundt
/s/ Glenn P. Strehle
- ---------------------------- Director September 14, 1998
Glenn P. Strehle
/s/ Stephen J. Sweeney
- ---------------------------- Director September 14, 1998
Stephen J. Sweeney
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Liberty
Financial Capital Trust I and Liberty Financial Capital Trust II each certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston in The Commonwealth of Massachusetts on September 14, 1998.
LIBERTY FINANCIAL CAPITAL TRUST I
By Liberty Financial Corporation,
as Depositor
By: /s/ James A. Hilbert
----------------------------------
Name: James A. Hilbert
Title: Senior Vice President
LIBERTY FINANCIAL CAPITAL TRUST II
By Liberty Financial Corporation,
as Depositor
By: /s/ James A. Hilbert
----------------------------------
Name: James A. Hilbert
Title: Senior Vice President
II-7
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
1.1+ Form of Underwriting Agreement for debt Securities and Preferred Stock
1.2+ Form of Underwriting Agreement (Warrants)
1.3+ Form of Underwriting Agreement (Preferred Securities)
1.4+ Form of Underwriting Agreement (Stock Purchase Contracts)
1.5+ Form of Underwriting Agreement (Stock Purchase Units)
3.1(1) Form of Restated Articles of Organization of the Company
3.2(1) Form of Certificate of Designation of Series A Convertible Preferred
Stock of the Company
3.3(7) Restated By-laws of the Company, as amended
4.1(1) Form of Certificate for Common Stock of the Company
4.2(1) Form of Certificate for Series A Convertible Preferred Stock of the
Company
4.3 Form of Indenture between the Company and State Street Bank and Trust
Company as Trustee
4.4* First Supplemental Indenture to Indenture between the Company and State
Street Bank and Trust Company as Trustee
4.5 Form of Senior Note
4.6 Form of Junior Subordinated Indenture
4.7* Form of Junior Subordinated Debenture
4.8 Form of Guarantee Agreement for Liberty Financial Capital Trust I
4.9 Form of Guarantee Agreement for Liberty Financial Capital Trust II
4.10 Certificate of Trust of Liberty Financial Capital Trust I
4.11 Trust Agreement of Liberty Financial Capital Trust I
4.12 Form of Amended and Restated Trust Agreement for Liberty Financial
Capital Trust I (including Form of Preferred Security)
4.13 Certificate of Trust of Liberty Financial Capital Trust II
4.14 Trust Agreement of Liberty Financial Capital Trust II
4.15 Form of Amended and Restated Trust Agreement for Liberty Financial
Capital Trust II (including Form of Preferred Security)
5.1* Opinion of Choate, Hall & Stewart
5.2* Opinion of Richards, Layton & Finger as to legality of the Preferred
Securities to be issued by Liberty Financial Capital Trust I and Liberty
Financial Capital Trust II
<PAGE>
8.* Opinion of counsel as to certain federal income tax matters
12(6) Statement re computation of ratios
21(7) Subsidiaries of the Company
23.1 Consent of Ernst & Young LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3* Consent of Choate, Hall & Stewart (to be included in Exhibit 5.1)
23.4* Consent of Richards, Layton & Finger (to be included in Exhibit 5.2)
23.5* Consent of tax counsel (to be included in Exhibit 8)
24.1 Powers of Attorney (included on signature page)
25.1 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Junior Subordinated Indenture
25.3 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Amended and Restated Trust Agreement for
Liberty Financial Capital Trust I
25.4 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
to act as trustee under the Amended and Restated Trust Agreement of
Liberty Financial Capital Trust II
25.5 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
under the Guarantee for the benefit of the holders of Preferred
Securities of Liberty Financial Capital Trust I
25.6 Form T-1 Statement of Eligibility of State Street Bank and Trust Company
under the Guarantee for the benefit of the holders of Preferred
Securities of Liberty Financial Capital Trust II
99.3(1)Form of Stockholders' Agreement among the Company, Liberty Mutual
Insurance Company and certain holders of the Company's Series A
Convertible Preferred Stock
</TABLE>
- ------------------------
* To be filed by amendment.
+ To be filed under subsequent Form 8-K.
(1) Incorporated by reference to the same Exhibit Number in the Company's
Registration Statement on Form S-4 (filed under the name NEW LFC, INC.)
(Registration No. 33-88824).
(2) Incorporated by reference to the same Exhibit number in the Company's 1994
Annual Report on Form 10-K filed March 30, 1995.
(3) Incorporated by reference to the same Exhibit Number in the Company's 1995
Annual Report on Form 10-K filed March 29, 1996.
(4) Incorporated by reference to the same Exhibit Number in the Company's
Registration Statement on Form S-3 (Registration Number 333-29315).
(5) Incorporated by reference to the same Exhibit Number in the Company's 1996
Annual Report on Form 10-K filed March 28, 1997.
(6) Incorporated by reference to the same Exhibit Number in the Company's
Quarterly Report on Form 10-Q filed August 13, 1998.
<PAGE>
(6) Incorporated by reference to Prospectus contained in the Company's
Registration Statement on Form S-3 (Registration Number 333-20067).
(7) Incorporated by reference to the same Exhibit Number in the Company's 1997
Annual Report on Form 10-K filed March 31, 1998.
LIBERTY FINANCIAL COMPANIES, INC.
Issuer
-----------------------
INDENTURE
Dated as of [____]
-----------------------
[!]
Trustee
-----------------------
Providing for the Issuance of Debt Securities in Series
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA INDENTURE
SECTION SECTION
<S> <C>
310(a)(1) ........................................................7.10
310(a)(2) ........................................................7.10
310(a)(3) ........................................................N.A.
310(a)(4) ........................................................N.A.
310(a)(5) ........................................................N.A.
310(b) ...........................................................7.08; 7.10
310(c) ...........................................................N.A.
311(a) ...........................................................7.11
311(b) ...........................................................7.11
311(c) ...........................................................N.A.
312(a) ...........................................................2.05
312(b) ...........................................................13.03
312(c) ...........................................................13.03
313(a) ...........................................................7.06
313(b)(1) ........................................................N.A.
313(b)(2) ........................................................7.06
313(c) ...........................................................7.06
313(d) ...........................................................7.06
314(a) ...........................................................4.04
314(b) ...........................................................N.A.
314(c)(1) ........................................................13.04
314(c)(2) ........................................................13.04
314(c)(3) ........................................................N.A.
314(d) ...........................................................N.A.
314(e) ...........................................................13.05
314(f) ...........................................................N.A.
315(a) ...........................................................7.01(b)
315(b) ...........................................................7.05
315(c) ...........................................................7.01(a)
315(d) ...........................................................7.01(c)
315(e) ...........................................................6.12
316(a)(last sentence) ............................................13.06
316(a)(1)(A) .....................................................6.09
316(a)(1)(B) .....................................................6.10
316(a)(2) ........................................................N.A.
316(b) ...........................................................6.07
317(a)(1) ........................................................6.04
317(a)(2) ........................................................6.04
317(b) ...........................................................2.04
318(a) ...........................................................13.01
N.A. means Not Applicable
Note: This cross-reference table is not part of the Indenture.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
<S> <C> <C>
Section 1.01. Definitions............................................................................1
Section 1.02. Incorporation by Reference of Trust Indenture Act......................................6
Section 1.03. Rules of Construction..................................................................6
ARTICLE TWO
THE SECURITIES
Section 2.01. Terms and Form.........................................................................6
Section 2.02. Execution and Authentication..........................................................10
Section 2.03. Registrar and Paying Agent............................................................13
Section 2.04. Paying Agent to Hold Money in Trust...................................................13
Section 2.05. Securityholder Lists..................................................................13
Section 2.06. Transfer, Registration and Exchange...................................................14
Section 2.07. Replacement Securities................................................................16
Section 2.08. Outstanding Securities................................................................17
Section 2.09. Temporary Securities..................................................................17
Section 2.10. Securities in Global Form.............................................................18
Section 2.11. Cancellation..........................................................................18
Section 2.12. Defaulted Interest....................................................................18
Section 2.13. Persons Deemed Owners.................................................................19
Section 2.14. CUSIP Numbers.........................................................................19
ARTICLE THREE
REDEMPTION
Section 3.01. Applicability of Article..............................................................20
Section 3.02. Notice to Trustee.....................................................................20
Section 3.03. Selection of Securities to Be Redeemed................................................20
Section 3.04. Notice of Redemption..................................................................21
Section 3.05. Effect of Notice of Redemption........................................................22
Section 3.06. Deposit of Redemption Price or Securities.............................................22
Section 3.07. Securities Redeemed in Part...........................................................23
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities.................................................................23
Section 4.02. Maintenance of Office or Agency.......................................................23
Section 4.03. Money for Securities Payments to Be Held in Trust.....................................24
Section 4.04. SEC Reports...........................................................................26
Section 4.05. Statement as to Compliance............................................................26
Section 4.06. Limitations on Liens on Stock of Restricted Subsidiaries..............................26
Section 4.07. Limitations on Issue or Disposition of Stock of Restricted Subsidiaries...............27
Section 4.08. Additional Amounts....................................................................27
i
<PAGE>
Section 4.09. Waiver of Certain Covenants...........................................................28
ARTICLE FIVE
SUCCESSOR CORPORATION AND ASSUMPTION
Section 5.01. When Company May Merge, etc...........................................................28
Section 5.02. Successor Corporation Substituted.....................................................28
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.....................................................................29
Section 6.02. Collection of Indebtedness by Trustee; Trustee May Prove Debt.........................31
Section 6.03. Application of Proceeds...............................................................33
Section 6.04. Suits for Enforcement.................................................................33
Section 6.05. Restoration of Rights on Abandonments of Proceedings..................................34
Section 6.06. Limitations on Suits by Securityholders...............................................34
Section 6.07. Unconditional Right of Securityholder to Institute Certain Suits......................34
Section 6.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default...............35
Section 6.09. Control by Holders of Securities......................................................35
Section 6.10. Waiver of Past Defaults...............................................................35
Section 6.11. Trustee to Give Notice of Default, But May Withhold in Certain Circumstances..........36
Section 6.12. Right of Court to Require Filing of Undertaking to Pay Costs..........................37
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee.....................................................................37
Section 7.02. Rights of Trustee.....................................................................39
Section 7.03. Individual Rights of Trustee..........................................................39
Section 7.04. Trustee's Disclaimer..................................................................40
Section 7.05. Notice of Defaults....................................................................40
Section 7.06. Reports by Trustee to Holders.........................................................40
Section 7.07. Compensation and Indemnity............................................................40
Section 7.08. Replacement of Trustee................................................................41
Section 7.09. Successor Trustee by Merger, etc......................................................42
Section 7.10. Eligibility; Disqualification.........................................................42
Section 7.11. Preferential Collection of Claims against Company.....................................42
ARTICLE EIGHT
DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's Obligations..............................................42
Section 8.02. Termination of the Company's Obligations under Certain Circumstances..................43
Section 8.03. Application of Trust Money............................................................45
Section 8.04. Repayment to Company..................................................................45
Section 8.05. Indemnity for Government Obligations..................................................45
ii
<PAGE>
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders............................................................45
Section 9.02. With Consent of Holders...............................................................47
Section 9.03. Compliance with Trust Indenture Act...................................................48
Section 9.04. Revocation and Effect of Consents.....................................................48
Section 9.05. Notation on or Exchange of Securities.................................................48
Section 9.06. Trustee to Sign Amendments, etc.......................................................49
ARTICLE TEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 10.01. Applicability of Article..............................................................49
ARTICLE ELEVEN
CONCERNING THE SECURITYHOLDERS
Section 11.01. Evidence of Action Taken by Securityholders...........................................49
Section 11.02. Proof of Execution of Instruments and of Holding of Securities........................50
Section 11.03. Holders to be Treated as Owners.......................................................51
Section 11.04. Securities Owned by Company Deemed Not Outstanding....................................52
Section 11.05. Right of Revocation of Action Taken...................................................52
Section 11.06. Meetings of Holders...................................................................52
Section 11.07. Call, Notice and Place of Meetings....................................................53
Section 11.08. Persons Entitled to Vote at Meetings..................................................53
Section 11.09. Quorum; Action........................................................................53
Section 11.10. Determination of Voting Rights; Conduct and Adjournment of Meetings...................54
Section 11.11. Counting Votes and Recording Action of Meetings.......................................55
ARTICLE TWELVE
SINKING FUNDS
Section 12.01. Applicability of Article..............................................................55
Section 12.02. Satisfaction of Sinking Fund Payments with Securities.................................55
Section 12.03. Redemption of Securities for Sinking Fund.............................................56
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls..........................................................57
Section 13.02. Notices...............................................................................57
Section 13.03. Communication by Holders with Other Holders...........................................58
Section 13.04. Certificate and Opinion as to Conditions Precedent....................................58
Section 13.05. Statements Required in Certificate or Opinion.........................................59
Section 13.06. When Treasury Securities Disregarded..................................................59
Section 13.07. Legal Holidays........................................................................59
Section 13.08. Governing Law.........................................................................60
Section 13.09. No Adverse Interpretation of Other Agreements.........................................60
iii
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Section 13.10. Successors............................................................................60
Section 13.11. Duplicate Originals...................................................................60
Section 13.12. Securities in Foreign Currencies......................................................60
</TABLE>
iv
<PAGE>
INDENTURE dated as of _____, _____, between Liberty Financial
Companies, Inc., a company incorporated under the laws of Massachusetts (the
"Company"), and [!, a Massachusetts] banking corporation, as trustee hereunder
("Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Securities
issued hereunder:
Recitals
The Company has 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 ("Securities") to be issued in one or more
series as herein provided.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1 Definitions.
------------
"Additional Amounts" means any additional amounts which are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on certain Holders, or as otherwise specified in the terms of a Security
established pursuant to Section 2.01, and which are owing to such Holders.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notice and demands. See Section 2.03.
"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 the meanings correlative to
the foregoing.
"Authorized Newspaper" means a newspaper printed in the official
language or in the English language of the country of publication and
customarily published at least once a day on each Business Day in each calendar
week and of general circulation in New York, New York or in any other place as
required in this Indenture, whether or not such newspaper is published on Legal
Holidays, or, with respect to the Securities of any series, such other
newspaper(s), as may be specified in or pursuant to the Board Resolution of the
Company or supplement to this Indenture pursuant to which such series of
Securities is issued. Whenever, under the provisions of this Indenture or such
Board Resolutions, two or more publications of a notice or other communication
are required or permitted, such publications may be in the same or different
newspapers. If, because of temporary or permanent suspension of publication or
general circulation of any newspaper or for any other reason, it is impossible
or impracticable to publish
1
<PAGE>
any notices required by this Indenture or a Board Resolution in the manner
provided, then such publication in lieu thereof or such other notice as shall be
made with the approval of the Trustee shall constitute a sufficient publication
of such notice.
"Bankruptcy Law" shall have the meaning set forth in Section 7.07.
"Bearer Security" means any Security in the form established pursuant
to Section 2.01 which is payable to bearer.
"Board of Directors" means the Board of Directors of the Company or the
Executive Committee or any other committee of the Board of Directors duly
authorized to act for the Company hereunder.
"Board Resolution" means a copy of the resolutions certified by the
Secretary or an Assistant Secretary of the Company as properly adopted by the
Board of Directors of the Company and in full force and effect and delivered to
the Trustee.
"Business Day", except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, with respect to any Place of Payment means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a Legal Holiday in that Place of
Payment.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) corporate stock.
"Company" means the party named in the first paragraph of this
Indenture until a successor replaces it pursuant to the Indenture and thereafter
means such successor.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman of the Board,
the President, the Chief Financial Officer or the Treasurer thereof or any other
officer specifically authorized to act by the Board of Directors of the Company
as certified to the Trustee, 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 principally
administered, which office at the date hereof is located at [______], Boston,
Massachusetts [______].
"Corporation" includes corporations, associations, companies and
business trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Debt" shall have the meaning set forth in Section 4.06.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Discharged" shall have the meaning set forth in Section 8.02.
2
<PAGE>
"Event of Default" shall have the meaning set forth in Section 6.01.
"Government Obligations" with respect to any series of Securities means
direct noncallable obligations of the government which issued the currency in
which the Securities of that series are denominated, noncallable obligations the
payment of the principal of and interest on which is fully guaranteed by such
government, and noncallable obligations on which the full faith and credit of
such government is pledged to the payment of the principal thereof and interest
thereon, and shall also include a depositary receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of such depositary receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depositary receipt.
"Holder" or "Securityholder" means, with respect to a Registered
Security, a Person in whose name such Security is registered on the Security
Register and, with respect to a Bearer Security or any coupon, the bearer
thereof.
"Indenture" means this Indenture, as it may from time to time be
amended or supplemented and shall include the forms and terms of particular
series of Securities established as contemplated herein.
"Independent Public Accountants" means independent public accountants
or a firm of independent public accountants who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such public accountants or firm shall be entitled to rely
upon any Opinion of Counsel as to the interpretation of any legal matters
relating to the Indenture or certificates required to be provided hereunder.
"Legal Holiday" shall have the meaning set forth in Section 13.07.
"Lien" means any mortgage, pledge, security interest or lien, or other
encumberance of any nature whatsoever.
"Notice of Default" shall have the meaning set forth in Section 6.01.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or Secretary thereof or any other officer specifically
authorized to act by the Board of Directors of the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer other than the Secretary and an Assistant Treasurer or an
Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion of legal counsel, who
(except as otherwise expressly provided in this Indenture) may be an employee of
or counsel to or for the Company, or any other legal counsel acceptable to the
Trustee.
3
<PAGE>
"Original Issue Discount Security" means any Security which provides
that an amount less than its principal amount is due and payable upon
acceleration of the maturity thereof after an Event of Default.
"Outstanding", when used with respect to Securities or a series, shall
have the meaning set forth in Section 2.08.
"Paying Agent" shall have the meaning set forth in Section 2.03.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the maturity or
maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as contemplated by Section
2.01 with respect thereto, are to be determined by the Company, or one or more
of the Company's agents designated in an Officers' Certificate, upon the
issuance of such Securities.
"Person" means any individual, Corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Securities of any
series, means the place or places where the principal of and interest and any
Additional Amounts on the Securities of that series are payable as specified as
provided pursuant to Section 2.01.
"principal", whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any," and, whenever used with reference to any Security which by its terms
provides (or as to which mandatory provisions of law provide) that less than the
principal amount thereof shall be due and payable upon a declaration of the
acceleration of the maturity thereof, and in the contexts of such a declaration,
of proving a claim under bankruptcy, insolvency or similar laws, or of
determining whether the holders of the requisite aggregate principal amount of
the Securities of any or all series then Outstanding have concurred in any
request, demand, authorization, direction, notice, consent, waiver or other
action by Securityholders hereunder, shall mean the portion of such principal
amount so provided to be due and payable upon a declaration of acceleration of
the maturity thereof.
"Redemption Date" means the date fixed for redemption of any Security
to be redeemed pursuant to this Indenture.
"Redemption Price" means the principal amount of any Security to be
redeemed.
"Registered Security" means any Security registered in the Security
Register.
"Registrar" shall have the meaning set forth in Section 2.03.
"Restricted Subsidiary" means each of [list restricted subsidiaries],
and any successor to all or a principal part of the business or properties of
any thereof and any other subsidiary which the Board of Directors designates as
a Restricted Subsidiary.
4
<PAGE>
"SEC" means the Securities and Exchange Commission as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended, or
if at any time after the execution of this instrument such Commission is not
existing and performing the duties assigned to it under the TIA, then the body
performing such duties at such time.
"Securities" means the debt securities, as amended or supplemented from
time to time pursuant to this Indenture, that are issued under this Indenture.
"Security Register" shall have the meaning set forth in Section 2.03.
"Subsidiary" means any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the shares of Voting Stock.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section
77aaa-77bbbb), as amended from time to time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"United States" means the United States of America (including the
States and the District of Columbia), its territories and possessions and other
areas subject to its jurisdiction.
"U.S. Depository" or "Depository" means, with respect to the Securities
of any series issuable or issued in whole or in part in the form of one or more
global Securities, the Person designated as U.S. Depository pursuant to Section
2.01, which must be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, and, if so provided pursuant to Section 2.01 with
respect to the Securities of any series, any successor to such Person. If at any
time there is more than one such Person, "U.S. Depository" shall mean, with
respect to any series of Securities, the qualifying entity which has been
appointed with respect to the Securities of that series.
"Voting Stock" means stock of a Corporation of the class or classes
having general voting power under ordinary circumstances in the election of
directors, managers or trustees of such Corporation (irrespective of whether or
not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"Yield to Maturity" means the yield to maturity on a series of
Securities at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
5
<PAGE>
Section 1.02. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Securityholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "institutional trustee" means the Trustee.
"Obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings thereby assigned to them.
Section 1.03. Rules of Construction.
----------------------
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and in the plural include
the singular;
(4) an accounting term not otherwise defined has the meaning assigned
to it in accordance with United States generally accepted accounting principles;
and
(5) the Article and Section headings herein and in the Table of
Contents are for convenience only and do not constitute a part of this Indenture
and shall not affect the meaning, construction or effect of this Indenture.
ARTICLE TWO
THE SECURITIES
Section 2.01. Terms and Form.
---------------
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 of Securities and shall bear the title, interest, if any, at
the rates and from the dates, shall mature at the times, may be redeemable at
the prices and upon the terms, shall be denominated and payable at the place or
places and in the currency or currencies (which may be other than United States
6
<PAGE>
dollars), including composite currencies, and shall contain or be subject to
such other terms as shall be approved by or pursuant to a Board Resolution of
the Company or in one or more supplements to this Indenture.
The Securities of each series hereunder shall be in one or more forms
approved from time to time by or pursuant to a Board Resolution of the Company
or in one or more supplements to this Indenture establishing the following:
(1) the title or designation of the Securities and the series in which
such Securities shall be included (which, unless such Securities constitute part
of a series of Securities previously issued, shall distinguish the Securities of
the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of
such title or the Securities of such series which may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Sections 2.06, 2.07, 2.09 or 3.07);
(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both; any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series; and whether any Securities of the series
are to be issuable initially in global form and, if so, (i) whether beneficial
owners of interests in any such global Security may exchange such interest for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if
other than in the manner specified in Section 2.09 and (ii) the name of the
Depository or the U.S. Depository, as the case may be, with respect to any
global Security;
(4) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary Bearer
Security in global form (representing all of the Outstanding Bearer Securities
of the series) payable in respect of any date or dates prior to the exchange of
such temporary Bearer Security for definitive Securities of the series shall be
paid to any clearing organization with respect to the portion of such temporary
Bearer Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any such
interest payment received by a clearing organization will be credited to the
Persons entitled to interest payable on such date or dates;
(6) the date or dates on which the principal of such Securities is
payable;
(7) the rate or rates at which such Securities shall bear interest, if
any, or the method in which such rate or rates are determined, the date or dates
from which such interest shall accrue, the dates on which such interest shall be
payable and the record date for Holders entitled to the interest payable on
Registered Securities on any such date, whether and under what circumstances
Additional Amounts on such Securities shall be payable and, if so, whether the
Company has the option to redeem the affected Securities rather than pay such
Additional
7
<PAGE>
Amounts, and the basis upon which interest shall be calculated if other than as
otherwise provided in this Indenture;
(8) the place or places, if any, in addition to or other than [Boston,
Massachusetts and] The Borough of Manhattan, The City of New York, New York or
the City of Chicago, Illinois where the principal of and interest on or
Additional Amounts, if any, payable in respect of such Securities shall be
payable;
(9) the period or periods within which, the price or prices at which
and the terms and conditions upon which such Securities may be redeemed, in
whole or in part, at the option of the Company;
(10) the obligation, if any, of the Company to redeem or purchase such
Securities pursuant to a sinking fund, at the option of a Holder thereof or
otherwise and the period or periods within which, the price or prices at which
and the terms and conditions upon which such Securities shall be redeemed or
purchased in whole or in part, pursuant to such obligation, and any provisions
for the remarketing of such Securities;
(11) the denominations in which Registered Securities of the series, if
any, shall be issuable, and the denominations in which Bearer Securities of the
series, if any, shall be issuable, in either case if other than as otherwise
provided in this Indenture;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Securities which shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.02;
(13) if other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency, including composite currencies, in which
payment of the principal of or interest, if any, and any Additional Amounts in
respect of such Securities shall be payable and whether the Securities of the
series may be discharged other than as provided in Article 8;
(14) if the principal of or interest, if any, and any Additional
Amounts in respect of such Securities are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency, including composite
currencies, other than that in which the Securities are stated to be payable,
the period or periods within which, and the terms and conditions upon which,
such election may be made;
(15) if the amount of payments of principal of or interest, if any, or
any Additional Amounts in respect of such Securities may be determined with
reference to an index, formula or other method based on a coin or currency other
than that in which the Securities are stated to be payable, the manner in which
such amounts shall be determined;
(16) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and terms of such certificates,
documents or conditions;
8
<PAGE>
(17) any terms which may be related to warrants issued by the Company
in connection with, or for the purchase of, Securities of such series, including
whether and under what circumstances the Securities of any series may be used
toward the exercise price of any such warrants;
(18) the terms and conditions upon which the Securities of the series
will be convertible into shares of common stock or other securities of the
Company, including the conversion price, conversion period and other conversion
provisions.
(19) any other events of default or covenants with respect to
Securities of such series;
and
(20) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).
If the form of the Security of any series is approved by or pursuant to
a Board Resolution of the Company, an Officers' Certificate of the Company
delivered to the Trustee shall state that all conditions precedent relating to
the authentication and delivery of such Security have been complied with and
shall be accompanied by a copy of the Board Resolution of the Company by or
pursuant to which the form of such Security has been approved. The Securities
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Security shall be dated the date of its authentication. Each
Security may contain any other terms as are not inconsistent with the provisions
of this Indenture.
All Securities of any one series and coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, the time or times at
which the principal thereof may be payable, the date from which interest, if
any, shall accrue and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in the Officers' Certificate hereinabove
described or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened for issuances of additional Securities of such series or
to establish additional terms of such series of Securities.
The Securities of each series may be issued as Registered Securities
without coupons or, if provided by the terms of the instrument establishing such
series of Securities, as Bearer Securities, with or without coupons and, in
either case, may be issued initially, temporarily or permanently in global form
(as provided in Section 2.10). Unless the form of a Security for a series
provides otherwise, the Registered Securities shall be issued in denominations
of $1,000 or integral multiples thereof and Bearer Securities shall be issuable
in the denomination of $5,000.
Except as otherwise specified as contemplated by this Section 2.01 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.
9
<PAGE>
Section 2.02. Execution and Authentication.
-----------------------------
Two Officers of the Company shall sign the Securities and the coupons
for the Company by manual or facsimile signature. The Company's seal, if any,
may be reproduced on the Securities, but the Company's seal shall not be
required to be included on the Securities.
If an Officer whose signature is on a Security or coupon no longer
holds that office at the time the Trustee authenticates the Security, the
Security and coupon shall be valid and binding on the Company nevertheless.
The aggregate principal amount of Securities Outstanding hereunder at
any time shall be unlimited except that such Outstanding amount (exclusive of
any premium) may not exceed the amount authorized from time to time by the Board
of Directors of the Company and except as provided in Section 2.07. Upon receipt
of a Company Order for the authentication and delivery of Securities of a
series, the Trustee shall authenticate and deliver for original issue Securities
of a series as to which an Officers' Certificate of the Company or a
supplemental indenture has been delivered to the Trustee pursuant to Section
2.01.
No Security or any coupon appertaining thereto shall be valid until the
Trustee or the authenticating agent referred to below manually signs the
certificate of authentication on the Security. Each Registered Security shall be
dated the date of its authentication. Bearer Securities and any temporary Bearer
Security in global form shall be dated as specified in the Officers' Certificate
of the Company or in the supplements to this Indenture contemplated by Section
2.01. The signature of the Trustee or the authenticating agent referred to below
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate thereof.
Except as permitted by Section 2.07, the Trustee shall not authenticate
and deliver any Bearer Security unless all appurtenant coupons for interest then
matured have been detached and cancelled.
The Trustee's authentication shall be in the following form:
Dated:
10
<PAGE>
Trustee's Certificate of Authentication
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
[!],
as Trustee
By:______________________
Authorized Signatory
11
<PAGE>
If the forms and terms of the Securities of the series and any related
coupons have been established in or pursuant to one or more Officers'
Certificates as permitted by Section 2.01 and 2.02, in authenticating such
Securities and accepting the additional responsibilities under this Indenture in
relating to such Securities the Trustee shall be entitled to receive, and
(subject to Section 7.01) shall be fully protected in relying upon an Opinion of
Counsel to the effect that:
(a) the form and terms of such Securities and coupons, if any, have
been duly authorized and established pursuant to Sections 2.01 and 2.02 and
comply with this Indenture, and
(b) such Securities, when authenticated and delivered by the Trustee
and issued by the Company, and such coupons, if any, when 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 customary exceptions,
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures
as may be specified from time to time in a Company Order, all as
contemplated by and in accordance with a Board Resolution or any
Officers' Certificate pursuant to Section 2.01, as the case may be)
will have been, duly authorized by the Company and established in
conformity with the provisions of this Indenture; and
(y) that such Securities, together with the coupons, if any,
appertaining thereto, when (1) executed by the Company, (2) completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and (3) 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 customary exceptions.
(z) With respect to Securities of a series subject to a Periodic
Offering, the Trustee may conclusively rely, as to the authorization
by the Company of any of such Securities, the form and terms thereof
and the legality, validity, binding effect and enforceability thereof,
upon the Opinion of Counsel and other documents delivered pursuant to
Section 2.01 and this Section, as applicable, at or prior to the time
of the first authentication of Securities of such series unless and
until it has received written notification that such opinion or other
documents have been superseded or revoked. In connection with the
authentication and delivery of Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to assume that the
Company's instructions to authenticate and deliver such Securities do
not violate any rules, regulations or orders of any governmental
agency or commission having jurisdiction over the Company.
12
<PAGE>
Section 2.03. Registrar and Paying Agent.
---------------------------
The Company shall designate a Registrar who shall maintain an office or
agency where Securities may be presented for registration of transfer and where
each series of Registered Securities may be presented for exchange ("Registrar")
and a Paying Agent who shall maintain an office or agency where Securities and
coupons may be presented for payment ("Paying Agent") and an office or agency
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Registrar shall keep a register ("Security
Register") of each series of Registered Securities and of their transfer and
exchange. The Company may have one or more co-Registrars and one or more
additional Paying Agents and shall maintain the Registrar or a co-Registrar and
a Paying Agent in each place required by Section 4.02. The term "Paying Agent"
includes any additional paying agent. In the event that the Trustee shall not be
the Registrar, it shall have the right to examine the Security Register at all
reasonable times.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, or the Company fails to maintain an agent
for service of notices, process and demands, or the Company fails to give the
foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee to be the Registrar, Paying
Agent and agent for services of notices and demands.
Section 2.04. Paying Agent to Hold Money in Trust.
------------------------------------
Each Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or any interest or Additional Amounts on the Securities,
and shall notify the Trustee of any default by the Company (or any other obligor
on the Securities) in making any such payment. If the Company or a Subsidiary
acts as Paying Agent, it shall on or before each due date of the principal of or
any interest or Additional Amounts on any Securities segregate the money and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay to the trustee all sums so held in trust
by such Paying Agent. Upon doing so the Paying Agent shall have no further
liability for the money.
Section 2.05. Securityholder Lists.
---------------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of Registered Securities. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee from information in the possession or
control of the Company (a) on or before each interest payment date, as of the
relevant record date, for any series of Securities, (b) pursuant to the form of
Security for each series of non-interest bearing Securities and (c) at such
other times as the Trustee may request in
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writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders, provided that if the
provisions of (a) or (b) do not provide for the furnishing of such information
at stated intervals of not more than six months, at least as frequently as
semiannually, not later than May 15 and November 15 of each year.
Section 2.06. Transfer, Registration and Exchange.
------------------------------------
When a Registered Security is presented at an office or agency
maintained for that series pursuant to Section 4.02 in proper form for
registration of transfer with a request to register a transfer, the Registrar or
co-Registrar at that office shall register the transfer as requested.
At the option of the Securityholder, Registered Securities of any
series may be exchanged upon surrender to the Registrar or a co-Registrar for
Registered Securities of the same series of like aggregate principal amount,
stated maturity and tenor and of other authorized denominations upon surrender
at any office or agency maintained for that series pursuant to Section 4.02.
If so provided with respect to Securities of a series, at the option of
the Holder, Bearer Securities of any such series may be exchanged for Registered
Securities of the same series containing identical terms and provisions, of any
authorized denominations and aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any office or agency maintained for that
series pursuant to Section 4.02, with all unmatured coupons and all matured
coupons in default thereto appertaining. If the Holder of a Bearer Security is
unable to produce any such unmatured coupon or coupons or matured coupon or
coupons in default, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company and the Trustee in an
amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent for that series harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent for
that series any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that except as otherwise provided in Section 4.02,
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency maintained for that series pursuant
to Section 4.02 in exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on any record
date for the payment of interest and any Additional Amounts thereon and before
the opening of business at such office or agency on the relevant payment date
therefor, such Bearer Security shall be surrendered without the coupon relating
to such payment date or proposed date of payment, as the case may be (or if such
coupon is so surrendered with such Bearer Security, such coupon shall be
returned to the person so surrendering the Bearer Security), and interest will
not be payable on such payment date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
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Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Registrar or co-Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-Registrar's request.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 2.01, any global Security shall be exchangeable only if
(i) the Securities Depository is at any time unwilling, unable or ineligible to
continue as Securities Depository and a successor Depository is not appointed by
the Company within 90 days of the date the Company is so informed in writing,
(ii) the Company executes and delivers to the Trustee a Company Order to the
effect that such global Security shall be so exchangeable, or (iii) an Event of
Default has occurred and is continuing with respect to the Securities. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for Securities of such series and of like tenor and principal
amount of any authorized form and denomination, as specified as contemplated by
Section 2.01, then without unnecessary delay but in any event not later than the
earliest date on which such interests may be so exchanged, Company shall deliver
to the Trustee definitive Securities of that series in aggregate principal
amount equal to the principal amount of such global Security, executed by the
Company. On or after the earliest date on which such interests may be so
exchanged, such global Securities shall be surrendered from time to time by the
U.S. Depository or such other Depository as shall be specified in the Company
Order with respect thereto, and in accordance with instructions given to the
Trustee and the U.S. Depository or such Depository, as the case may be, which
instructions shall be in writing but need not be accompanied by an Officers'
Certificate of the Company or an Opinion of Counsel, as shall be specified in
the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose, to be exchanged, in whole or in part, for definitive
Securities of the same series without charge. The Trustee shall authenticate and
make available for delivery, in exchange for each portion of such surrendered
global Security, a like aggregate principal amount of definitive Securities of
the same series of authorized denominations and of like tenor as the portion of
such global Security to be exchanged which shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof (unless the Securities of the series
are not issuable both as Bearer Securities and as Registered Securities, in
which case the definitive Securities exchanged for the global Security shall be
issuable only in the form in which the Securities are issuable, as specified as
contemplated by Section 2.01); provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending on the relevant
Redemption Date; and provided, further, that (unless otherwise specified as
contemplated by Section 2.01) no Bearer Security delivered in exchange for a
portion of a global Security shall be mailed or otherwise delivered to any
location in the United States. Promptly following any such exchange in part,
such global Security shall be returned by the Trustee to such depository or the
U.S. Depository referred to above in accordance with the instructions of the
Company referred to above. If a Registered Security is issued in exchange for
any portion of a global Security after the close of business at the office or
agency where such exchange occurs on any record date for the payment of interest
or any Additional Amounts thereon, and before the opening of business at such
office or agency on the relevant payment date therefor, interest and any
Additional Amounts in respect of such
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Registered Security will not be payable on such payment date, but will be
payable on such payment date only to the Person to whom interest or any
Additional Amounts in respect of such portion of such global Security is payable
in accordance with the provisions of this Indenture.
No service charge shall be made for any registration of transfer or
exchange, or redemption 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 2.09, 3.07 or 9.05 not involving any
transfer.
The Company shall not be required (a) to issue, register the transfer
of, or exchange any Securities of any series for a period of 15 days next
preceding the day of any selection of Securities of such series to be redeemed
pursuant to Section 3.03, or (b) to register the transfer of or exchange any
Securities of any series selected, called or being called for redemption in
whole or in part except, in the case of any Registered Security to be redeemed
in part, the portion thereof not so to be redeemed or (c) to exchange any Bearer
Security so selected for redemption except, to the extent provided with respect
to Securities of a series, that such a Bearer Security may be exchanged for a
Registered Security of that series, provided that such Registered Security shall
be immediately surrendered for redemption with written instruction for payment
consistent with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
endorsed thereon surrendered upon such registration of transfer or exchange.
Section 2.07. Replacement Securities.
-----------------------
If the Holder of a mutilated or defaced Security or a Security with a
mutilated or defaced coupon appertaining to it surrenders such Security to the
Trustee or if the Holder of a Security presents evidence to the satisfaction of
the Company and the Trustee that the Security has been lost, destroyed or
wrongfully taken or that a coupon has been lost, stolen or wrongfully taken and
surrenders the Security to which such coupon appertains with all appurtenant
coupons not so lost, stolen or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series and of like
tenor, with coupons corresponding to the coupons, if any, appertaining to the
surrendered Security. In case any such mutilated, defaced, lost, destroyed or
wrongfully taken Security or coupon has or is about to become due and payable,
the Company may pay the Security or coupon instead of issuing a new Security or
coupon; provided, however, that payment of principal of and any interest on and
Additional Amounts with respect to Bearer Securities shall, except as otherwise
provided in Section 4.02, be payable only at an office or agency located outside
the United States and, unless otherwise specified as contemplated by Section
2.01, any interest on Bearer Securities shall be payable only upon presentation
and surrender of the coupons appertaining thereto. If required by the Trustee or
the Company, an indemnity bond must be provided which is sufficient in the
judgment of the Company and the Trustee to protect the Company and the Trustee
or any Agent from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their fees and
expenses in replacing a Security.
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Every replacement Security of any series, with its coupons, if any, is
an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with any and all other
Securities of that series and their coupons, if any, duly issued under this
Indenture.
Section 2.08. Outstanding Securities.
-----------------------
Securities Outstanding at any time are all Securities authenticated by
the Trustee except for those cancelled by it and those described in this
Section. A Security does not cease to be Outstanding because the Company or one
of its Affiliates holds the Security except as provided in Section 13.06.
If a Security is replaced pursuant to Section 2.07, it ceases to be
Outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a Redemption Date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be Outstanding and interest on them ceases to accrue,
provided that, if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
If the Company is deemed to be discharged from its obligations with
respect to the Securities of any series pursuant to Section 8.01 or 8.02, the
Securities of such series shall cease to be Outstanding.
In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 6.01, as adjusted
pursuant to Section 13.12 if applicable.
Section 2.09. Temporary Securities.
----------------------
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities and, if Bearer Securities, temporary coupons shall be substantially
in the form of definitive Securities and, if Bearer Securities, definitive
coupons but may have variations in form that the Company considers appropriate
for temporary Securities. In the case of Bearer Securities of any series, such
temporary Securities may be in global form representing all of the Outstanding
Bearer Securities of such series. Except in the case of temporary Securities in
global form (which shall be exchanged in accordance with the provisions
thereof), without unreasonable delay, the Company shall prepare definitive
Securities (accompanied by any unmatured coupons pertaining thereto) of like
tenor as the temporary Securities.
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After the preparation of definitive Securities of a series, the
temporary Securities of such series shall be exchangeable upon request for
definitive Securities of such series containing identical terms and provisions
upon surrender of the temporary Securities of such series at an office or agency
of the Company maintained for such purpose pursuant to Section 4.02, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations of the same series containing
identical terms and provisions; provided, however, that no definitive Bearer
Security, except as provided pursuant to Section 2.01, shall be delivered in
exchange for a temporary Registered Security; and provided, further, that a
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security only in compliance with the conditions set forth therein. Unless
otherwise specified as contemplated by Section 2.01 with respect to a temporary
global Security, 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 2.10. Securities in Global Form.
--------------------------
If Securities of a series are issuable in global form, any such
Security may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, or
changes in the rights of Holders, of Outstanding Securities represented thereby
shall be made in such manner and by such Person or Persons as shall be specified
therein.
Section 2.11. Cancellation.
-------------
The Company at any time may deliver Securities or coupons to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment and
all coupons surrendered for payment. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment or cancellation and all coupons
surrendered for payment and return such cancelled Securities to the Company upon
Company Order, provided, however, that the Trustee may but shall not be required
to destroy cancelled Securities unless the Company directs their return to the
Company. The Company may not issue new Securities to replace Securities that it
has paid or delivered to the Trustee for cancellation.
Section 2.12. Defaulted Interest.
-------------------
If the Company defaults in a payment of interest or any Additional
Amounts on any series of Registered Securities, the Company shall pay the
defaulted interest and any Additional Amounts to Persons who are Holders of
Registered Securities of such series on a subsequent special record date in the
following manner. The Company shall fix the special record date (which shall be
between 10 and 30 days before the payment date) for the payment of such
defaulted interest and any Additional Amounts on such Securities and the payment
date for such defaulted interest. At least 15 days before the special record
date, the Company shall mail each
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Holder of Registered Securities a notice that states the special record date,
the payment date and the amount of defaulted interest and any Additional Amounts
to be paid, provided the Company has made arrangements satisfactory to the
Trustee for payment of the aggregate amount to be paid on such payment date. On
such payment date the Trustee shall pay out of funds provided by the Company
such defaulted interest and any Additional Amounts. In case a Bearer Security of
any series is surrendered at the office or agency of the Company maintained
pursuant to Section 4.02 in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such office or
agency on any special record date and before the opening of business at such
office or agency on the related proposed date for payment of defaulted interest
and any Additional Amounts, such Bearer Security shall be surrendered without
the coupon relating to such proposed date of payment and defaulted interest and
any Additional Amounts will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon on or after such payment
date in accordance with the provisions of this Indenture. The Company may pay
defaulted interest and any Additional Amounts in any other lawful manner.
Section 2.13. Persons Deemed Owners.
----------------------
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payments of
principal of and (subject to Sections 2.06 and 4.01) interest on and Additional
Amounts with respect to such Registered Security and for all other purposes
whatsoever, whether or not such Registered Security shall 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.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon shall 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.
Section 2.14. 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 a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
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ARTICLE THREE
REDEMPTION
Section 3.01. Applicability of Article.
-------------------------
This Article shall apply to the Securities of each series, if any, that
by their terms are subject to redemption at the option of the Company or
pursuant to the operation of a sinking fund or otherwise are required to be
redeemed pursuant to the terms of the Securities. If the terms of any Security
shall conflict with any provision of this Article, the terms of such Security
shall govern.
Section 3.02. Notice to Trustee.
------------------
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. If the Company wants to redeem Securities of any series
in whole or in part pursuant to the terms of the Securities of that series, the
Company shall notify the Trustee of the Redemption Date therefor and the
principal amount and other terms and provisions of the Securities to be
redeemed. Each such notice shall be accompanied by an Officers' Certificate of
the Company stating that any conditions to such redemption as provided in such
Security and in this Article have been complied with. If the Company elects to
redeem less than all of the Securities of a series with the same terms and
provisions, the Company shall notify the Trustee of such Redemption Date and of
the principal amount of such Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 3.03.
If Securities of any series by their terms are redeemable pursuant to
the operation of a sinking fund or pursuant to another mandatory redemption
provision of the Securities, the Company shall notify the Trustee by an
Officers' Certificate of the amount of the next sinking fund payment or amount
required to satisfy such mandatory redemption payment and the portion of such
payment which is to be satisfied by delivering and crediting Securities of the
same series pursuant to Section 3.06.
If the Company wants to reduce pursuant to the terms of such Securities
the principal amount of Securities to be redeemed, it shall notify the Trustee
by Officers' Certificate of the amount of the reduction and the basis for it. If
the Company wants to credit against any such redemption Securities of the same
series it has not previously delivered to the Trustee for cancellation, it shall
deliver the Securities with such Officers' Certificate.
The Company shall give each notice and an Officers' Certificate
provided for in this Section at least 45 days before the applicable Redemption
Date (unless shorter notice is satisfactory to the Trustee or a shorter or
longer notice is required by the applicable Security).
Section 3.03. Selection of Securities to Be Redeemed.
---------------------------------------
If less than all the Securities of a series with the same terms and
provisions are to be redeemed, the Trustee shall select the Securities to be
redeemed by a method the Trustee considers fair and appropriate. The Trustee
shall make the selection from such Securities Outstanding not previously called
for redemption. The Trustee may select for redemption
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portions of the principal of Registered Securities of such series that have
denominations larger than the minimum authorized denominations for Registered
Securities of that series. Securities and portions thereof the Trustee selects
shall be in amounts equal to the smallest authorized denominations or an
integral multiple thereof. Provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Registered Securities called for
redemption.
The Trustee shall promptly notify the Company and the Registrar (if
other than itself) in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal of such Securities which has been or is to be redeemed.
Section 3.04. Notice of Redemption.
---------------------
At least 30 days but not more than 60 days before a Redemption Date
(unless a shorter or longer period is specified in the Securities to be
redeemed), the Company shall give notice of such redemption to the Holders of
the Securities to be redeemed as a whole or in part, with respect to Registered
Securities, by mailing a notice of such redemption by first-class mail to each
Holder of Registered Securities to be redeemed and, with respect to Bearer
Securities, by publishing in an Authorized Newspaper notice of such redemption
on two separate days.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price, including premium, if any, accrued interest
and Additional Amounts, if any;
(3) if less than all Securities of a series Outstanding are to be
redeemed, the identification (and, if any Security is to be redeemed in part,
the principal amount) of the particular Securities to be redeemed;
(4) the name or names and address or addresses of the Paying Agent;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price, including premium, if any, accrued
interest and Additional Amounts, if any;
(6) that interest on Securities called for redemption ceases to accrue
on and after the Redemption Date;
(7) that the redemption is pursuant to a sinking fund, if such is the
case;
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(8) the Place or Places of Payment where such Securities are to be
surrendered for payment for the Redemption Price; and
(9) the CUSIP number, if any, of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.05. Effect of Notice of Redemption.
-------------------------------
Once notice of redemption is given pursuant to Section 3.04, Securities
called for redemption shall become due and payable on the Redemption Date
therefor and at the applicable Redemption Price. Upon surrender to the Paying
Agent for such Securities of such Securities together with all unmatured
coupons, if any, appertaining thereto, such Securities shall be paid at the
applicable Redemption Price, plus accrued interest to the Redemption Date and
any Additional Amounts payable with respect thereto; provided, however, that any
regular payment of interest and any Additional Amounts payable with respect
thereto becoming due on the Redemption Date shall be payable, in the case of
Bearer Securities, to bearers of the coupons for such interest and Additional
Amounts upon surrender thereof and in the case of Registered Securities to the
Holders of such Securities in accordance with their terms.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of each missing
coupon or coupons may be waived by the Company and the Trustee if there shall be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent for such Security harmless. If thereafter the Holder
of such Security shall surrender to the Trustee or any Paying Agent for such
Security any such missing coupon in respect of which a deduction shall have been
made from the Redemption Price, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest (and any Additional
Amounts) represented by coupons shall be payable only upon presentation and
surrender of these coupons at an office or agency located outside of the United
States except as otherwise provided in Section 4.02.
Section 3.06. Deposit of Redemption Price or Securities.
------------------------------------------
On or before the Redemption Date, the Company shall deposit with the
applicable Paying Agent (or if the Company is its own Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price of and
accrued interest and Additional Amounts, if any, on all Securities to be
redeemed on that date.
If any Security by its terms permits any sinking fund payment
obligation to be satisfied by delivering and crediting Securities, the Company
shall deliver such Securities to the Trustee for crediting against such payment
obligation in accordance with the terms of such Securities and this Indenture.
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Section 3.07. Securities Redeemed in Part.
----------------------------
Upon surrender of a Security that is redeemed in part at any office or
agency maintained by the Company pursuant to Section 4.02, the Company shall
execute and Trustee shall authenticate for the Holder a new Security of the same
series equal in principal amount to the unredeemed portion of the Security
surrendered.
If a Security in global form is surrendered upon redemption in part,
the Company shall execute, and the Trustee shall authenticate and deliver to the
U.S. Depository or other Depository for such Security in global form as shall be
specified in the Company Order to the Trustee with respect thereto, without
service charge, a new Security in global form in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Security in global
form so surrendered.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Securities.
----------------------
The Company shall pay the principal of and any interest or Additional
Amounts, if any, on the Securities of each series on the dates and in the manner
provided in the Securities, any coupons appertaining thereto and this Indenture.
At the Company's option, it can pay any interest or Additional Amounts, if any,
on Registered Securities of any series by mailing checks or drafts to the
Holders of such Securities at their addresses as shown in the Security Register.
Any interest due on and any Additional Amounts payable in respect of Bearer
Securities on or before their maturity, in respect of the principal of such a
Security shall be payable only upon presentation and surrender of the several
coupons for such interest installments as are evidenced thereby as they
severally mature.
The Company shall pay interest on overdue principal of any Security at
the rate borne by such Security; it shall pay interest on overdue installments
of interest or Additional Amounts, if any, at the same rate to the extent
lawful.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any record date established
to determine the Person to whom interest or Additional Amounts are payable on
the next following interest payment date therefor and before the opening of
business (at such office or agency) on such interest payment date, such Bearer
Security shall be surrendered without the coupon relating to such interest
payment date and interest will not be payable on such interest payment date in
respect of the Registered Security issued in exchange of such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
Section 4.02. Maintenance of Office or Agency.
--------------------------------
The Company shall maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be
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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 Company in respect of the Securities of that series and
this Indenture may be served.
If Securities of a series are issuable as Bearer Securities, the
Company shall maintain, subject to any laws or regulations applicable thereto,
an office or agency in a Place of Payment for such series which is located
outside the United States where Securities of such series and the related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of such series); provided, however,
that if the Securities of such series are listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland Limited or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain a
Paying Agent in London, Luxembourg or any other city so required located outside
the United States, as the case may be, so long as the Securities of such series
are listed on such exchange. 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 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, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Bearer Securities of
that series) at the place specified for that purpose pursuant to Section 2.01.
Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal or interest or Additional Amounts on Bearer Securities shall be made
at any office or agency of the Company in the United States or by check mailed
to any address in the United States or by transfer to an account maintained with
a bank located in the United States; provided, however, payment of principal of
and interest in U.S. dollars (including Additional Amounts payable in respect
thereof) on any Bearer Security may be made at the office of the Paying Agent in
the Borough of Manhattan, The City of New York, New York, or in the City of
Boston, State of Massachusetts if (but only if) payment of the full amount of
such principal, interest or Additional Amounts at all offices outside the United
States maintained for that purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may 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 4.03. 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 shall, on or before each due date of the
principal of, or interest or Additional
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Amounts on, any of the Securities of that series, segregate and hold in trust
for the benefit of the Person entitled thereto a sum sufficient to pay the
principal or interest or Additional Amounts so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
shall 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, on or prior to each due date of the principal of,
or interest or Additional Amounts on, any Securities of that series, deposit
with any Paying Agent a sum sufficient to pay the principal or interest and
Additional Amounts so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, interest or Additional Amounts, and
(unless such Paying Agent is the Trustee) the Company shall promptly notify the
Trustee of its action or failure so to act.
The Company shall 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 shall:
(1) hold all sums held by it for the payment of the principal of or
interest or any Additional Amounts on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any Default by the Company in the making
of any payment of principal or interest or any Additional Amounts on the
Securities of that series; and
(3) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
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
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
terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Except as otherwise provided in the form of Securities of any
particular series pursuant to the provisions of this Indenture, 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 interest or any Additional Amounts
on any Security of any series and remaining unclaimed for one year after such
principal or interest has or Additional Amounts have become due and payable
shall be paid to the Company upon receipt of a Company Order to that effect, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security or any coupon appertaining thereto shall 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 an Authorized Newspaper in each Place of Payment or to be
mailed to Holders of Registered Securities, or both,
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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
or mailing nor shall it be later than one year after such principal or interest
or Additional Amount has become due and payable, any unclaimed balance of such
money then remaining shall be repaid to the Company.
Section 4.04. SEC Reports.
-------------
The Company shall file with the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended. The Company also shall comply with the other provisions of TIA
Section 314(a).
Section 4.05. Statement as to Compliance.
---------------------------
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, commencing ______ ___, 19__ (no more than one year
after closing), a written statement, which need not comply with Section 13.05
hereof, signed by a principal executive officer, principal financial officer or
principal accounting officer, stating, as to the signer thereof, that
(1) a review of the activities of the Company during such year
and of performance under this Indenture has been made under his
supervision, and
(2) to the best of his knowledge, based on such review, (a) the
Company has fulfilled its obligations under this Indenture throughout
such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to him and the
nature and status thereof, and (b) no event has occurred and is
continuing which is, or after notice or lapse of time or both would
become, an Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.
(b) The Company shall deliver to the Trustee, within thirty days after
the Company obtains knowledge of the occurrence thereof, written notice of any
Default.
Section 4.06. Limitations on Liens on Stock of Restricted Subsidiaries.
---------------------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary to,
issue, assume or guarantee any debt for money borrowed (hereafter in this
Section referred to as "Debt") secured by a mortgage, security interest, pledge,
lien or other encumbrance upon any shares of stock of any Restricted Subsidiary
(whether such shares of stock are now owned or hereafter acquired) without in
any such case effectively providing concurrently with the issuance, assumption
or guarantee of any such Debt that the Securities (together with, if the Company
shall so determine, any other indebtedness of or guarantee by the Company
ranking equally with the Securities and then existing or thereafter created)
shall be secured equally and ratably with such Debt.
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Section 4.07. Limitations on Issue or Disposition of Stock of
Restricted Subsidiaries.
-----------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary to,
issue, sell, assign, transfer or otherwise dispose of, directly or indirectly,
any of the Capital Stock (other than nonvoting preferred stock) of any
Restricted Subsidiary (except to the Company or to one or more Restricted
Subsidiaries or for the purpose of qualifying directors); provided, however,
that this covenant shall not apply if:
(1) all or any part of such Capital Stock is sold, assigned,
transferred or otherwise disposed of in a transaction for consideration which is
at least equal to the fair value of such Capital Stock, as determined by the
Board of Directors (acting in good faith); or
(2) the issuance, sale, assignment, transfer or other disposition is
required to comply with the order of a court or regulatory authority of
competent jurisdiction, other than an order issued at the request of the Company
or of one of its Restricted Subsidiaries.
Section 4.08. Additional Amounts.
------------------
If any Securities of a series provide for the payment of Additional
Amounts, the Company agrees to pay to the Holder of any such Security or any
Coupon appertaining thereto Additional Amounts as provided in or pursuant to
this Indenture or such Securities. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding the payment of Additional Amounts in those
provisions hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture or the
Securities of the applicable series, if the Securities of a series provide for
the payment of Additional Amounts, at least 10 days prior to the first interest
payment date with respect to such series of Securities (or if the Securities of
such series shall not bear interest prior to maturity, the first day on which a
payment of principal is made), and at least 10 days prior to each date of
payment of principal or interest if there has been any change with respect to
the matters set forth in the below-mentioned Officers' Certificate, the Company
shall furnish to the Trustee and the principal Paying Agent or Paying Agents, if
other than the Trustee, an Officers' Certificate instructing the Trustee and
such Paying Agent or Paying Agents whether such payment of principal of and
premium, if any, or interest on the Securities of such series shall be made to
Holders of Securities of such series or the Coupons appertaining thereto who are
United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of such
series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or Coupons, and the Company
agrees to pay to the Trustee or such Paying Agent the Additional Amounts
required by the terms of such Securities. The Company covenants to
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indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section.
Section 4.09. Waiver of Certain Covenants.
----------------------------
The Company may omit in any particular instance, to comply with any
covenant or condition set forth in Sections 4.06 or 4.07, if before or after the
time for such compliance the Holders of at least a majority in principal amount
of all Outstanding Securities, and the Holders of at least a majority in
principal amount of the Outstanding Securities of each series to be affected,
shall 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 Company
and the duties of the Trustee in respect of any such covenant or condition shall
remain in full force and effect.
ARTICLE FIVE
SUCCESSOR CORPORATION AND ASSUMPTION
Section 5.01. When Company May Merge, etc.
----------------------------
The Company shall not consolidate with or merge into, or sell, lease or
convey all or substantially all of its assets to, another Corporation unless the
successor or transferee Corporation expressly assumes by supplemental indenture,
in form satisfactory to the Trustee, all the obligations of the Company with
respect to the Securities and this Indenture, and the Company or successor
Corporation, as the case may be, (i) shall be a Corporation organized under the
laws of one of the states in the United States and (ii) shall not, immediately
after such consolidation or merger or sale, lease or conveyance, be in default
in the performance of any covenant or condition with respect to the Securities
or the Indenture. The Company shall deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture comply with this Indenture.
Thereafter all such obligations of the predecessor corporation shall terminate.
Section 5.02. Successor Corporation Substituted.
----------------------------------
Upon any consolidation or merger, or any sale, lease or conveyance of
all or substantially all of the assets of the Company in accordance with Section
5.01, the successor Corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Corporation had been
named as the Company herein.
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ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
------------------
An "Event of Default" occurs with respect to the Securities of any
series upon:
(a) default in the payment of any installment of interest upon or any
Additional Amounts payable in respect of any of the Securities of such series as
and when the same shall become due and payable, and continuance of such default
for a period of 30 days; or
(b) default in the payment of all or any part of the principal on any
of the Securities of such series as and when the same shall become due and
payable either at maturity, upon redemption, by declaration or otherwise (except
the failure to make payment when due and payable if such failure results solely
from nonpayment by reason of mistake, oversight or transfer difficulties and
does not continue beyond 3 Business Days after the day on which such payment is
due and payable); or
(c) default in the payment of any sinking fund installment as and when
the same shall become due and payable by the terms of the Securities of such
series (except the failure to make payment when due and payable if such failure
results solely from nonpayment by reason of mistake, oversight or transfer
difficulties and does not continue beyond 3 Business Days after the day on which
such payment is due and payable); or
(d) default in the performance, or breach, of any covenant or warranty
of the Company in respect of the Securities of such series (other than a
covenant or warranty in respect of the Securities of such series a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities (determined pursuant to Section
2.08) of all series affected thereby, a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) a court having jurisdiction in the premises entering a decree or
order for relief in respect of the Company in an involuntary case under the
Bankruptcy Law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of the
Company or for any substantial part of its property or ordering the winding up
or liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(f) the Company commencing a voluntary case under any applicable
Bankruptcy Law now or hereafter in effect, or consent to the entry of an order
for relief in an involuntary case under any such law, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Company or for
any substantial part of its property, or making any general assignment for the
benefit of creditors; or
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(g) any other Event of Default provided in the supplemental indenture
or Board Resolutions under which such series of Securities is issued or in the
form of Security for such series.
If an Event of Default described in clause (a), (b), (c) or (d) above
(if the Event of Default under clause (d) is with respect to less than all
series of Securities then Outstanding) occurs and is continuing, then, and in
each and every such case, unless the principal of all of the Securities of such
series shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Securities of
such series then Outstanding hereunder (each such series voting as a separate
class) by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all
Securities of such series and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and payable immediately,
and upon any such declaration the same shall become immediately due and payable.
If an Event of Default described in Clause (d) (if the Event of Default under
clause (d) is with respect to all series of Securities then Outstanding), (e) or
(f) occurs and is continuing, then and in each and every such case, unless the
principal of all the Securities shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of all the Securities then Outstanding hereunder (treated as one class),
by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if any Securities are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms thereof) of all the Securities then Outstanding and
interest accrued thereon and Additional Amounts payable in respect thereof, if
any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable.
The foregoing provisions, however are subject to the condition that if,
at any time after the principal (or, if the Securities are Discount Securities,
such portion of the principal as may be specified in the terms thereof) of the
Securities of any series (or of all the Securities, as the case may be) shall
have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon and any Additional
Amounts payable in respect of all the Securities of such series (or of all the
Securities, as the case may be) and the principal of any and all Securities of
such series (or of all the Securities, as the case may be) which shall have
become due otherwise than by acceleration (with interest upon such principal
and, to the extent that payment of such interest is enforceable under applicable
law, on overdue installments of interest or any Additional Amounts, at the same
rate as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series (or at the
respective rates of interest or Yields to Maturity of all the securities, as the
case may be, to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the trustee except as a result of negligence or bad faith, and
if any and all Events of Default under the Indenture, other than the non-payment
of the principal of Securities which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein -- then
the Holders of a majority in aggregate
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principal amount of all the Securities of such series, each series voting as a
separate class (or of all the Securities, as the case may be, voting as a single
class) then Outstanding, by written notice to the Company and to the Trustee,
may waive all defaults with respect to such series (or with respect to all the
Securities, as the case may be) and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full or such Original Issue
Discount Securities.
Section 6.02. Collection of Indebtedness by Trustee; Trustee May
Prove Debt.
--------------------------------------------------
The Company covenants that (a) in the case default shall be made in the
payment of any installment of interest on or any Additional Amounts payable in
respect of any of the Securities of any series when such interest or Additional
Amounts shall have continued for a period of 30 days or (b) in case principal
shall have become due and payable, and such default shall be made in the payment
of all or any part of the principal of any of the Securities of any series when
the same shall have become due and payable, whether upon maturity of the
Securities of such series, or upon any redemption or by declaration or otherwise
- -- then, upon demand of the Trustee, the Company will pay to the Trustee for the
benefit of the Holders of the Securities of such series the whole amount that
then shall have become due and payable on all Securities of such series, and
such coupons, for principal, interest or Additional Amounts, if any, as the case
may be (with interest to the date of such payment upon the overdue installments
of interest or any Additional Amounts at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series); and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection including reasonable compensation to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, and any expenses and
liabilities incurred, and all advances made, by the Trustee and predecessor
Trustee except as a result of its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Company or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Company or
any other obligor upon the Securities under Bankruptcy Law, or in case a
receiver, assignee or trustee in
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bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Company or its property or
such other obligor, or in case of any other comparable judicial proceedings
relative to the Company or other obligor upon the Securities or any series, or
to the creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of any Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest (or, if the Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) and any Additional Amounts owing and unpaid in respect
of the Securities of any series, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Securityholders allowed in any judicial proceedings
relative to the Company or other obligor upon the Securities of any series, or
to the creditors or property of the Company or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders to make payments to the
Trustee, and in the event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the trustee
and each predecessor Trustee except as a result of negligence or bad faith and
all other amounts due to the Trustee or any predecessor Trustee under this
Indenture.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or coupons appertaining to such
Securities, may be enforced by the
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Trustee without the possession of any of the Securities of such series or
coupons appertaining to such Securities or the production thereof at any trial
or other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery or judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Securities or of coupons appertaining to such
Securities in respect of which action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or coupons appertaining to such Securities in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities or coupons appertaining to such Securities parties to any such
proceedings.
Section 6.03. Application of Proceeds.
------------------------
Any moneys collected by the Trustee pursuant to this Article with
respect to the Securities of any series shall be applied in the following order
at the date or dates fixed by the Trustee and, in case of the distribution of
such moneys on account of principal, interest or any Additional Amounts, upon
presentation of the several Securities and coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereof the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid.
FIRST: to the Trustee and any predecessor Trustee for amounts due under
Section 7.07.
SECOND: to the Holders of Securities of such series or coupons
appertaining thereto for amounts due and unpaid on the Securities and coupons
for principal, interest and Additional Amounts, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
and coupons for principal, interest and Additional Amounts, respectively; and
THIRD: to the Person or Persons lawfully entitled thereto.
Section 6.04. Suits for Enforcement.
----------------------
In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise, whether for
the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture or to
enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
33
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Section 6.05. Restoration of Rights on Abandonments of Proceedings.
-----------------------------------------------------
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discounted or abandoned for
any reason, or shall have been determined adversely to the Trustee, then and in
every such case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Company, the Trustee and the Securityholders shall continue as though no
such proceedings had been taken.
Section 6.06. Limitations on Suits by Securityholders.
----------------------------------------
No Holder of any Security of any series or of any coupon appertaining
thereto shall have any right by virtue or by availing of any provision of this
Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or for
the appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of not less than
25% in aggregate principal amount of the Securities of such series then
Outstanding shall have made written request upon the Trustee to institute such
action or proceedings in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee, it being understood and intended, and being expressly covenanted by the
taker and Holder of every Security or coupon with every other taker and Holder
and the Trustee, that no one or more Holders of Securities of any series or
coupons appertaining to such Securities shall have any right in any manner
whatever by virtue or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other such Holder of Securities or
coupons appertaining to such Securities, or to obtain or seek to obtain priority
over or preference to any other such Holder or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of the applicable series and coupons
appertaining to such Securities. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 6.07. Unconditional Right of Securityholder to Institute
Certain Suits.
--------------------------------------------------
Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security or coupon to receive
payment of the principal of, interest on and any Additional Amounts in respect
of such Security or coupon on or after the respective due dates expressed in
such Security or coupon, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
34
<PAGE>
Section 6.08. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default.
-------------------------------------------------
Except as provided in Section 6.06, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of Securities or coupons is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 6.06, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
coupons may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders of Securities or coupons.
Section 6.09. Control by Holders of Securities.
---------------------------------
The Holders of a majority in aggregate principal amount of the
Securities of each series affected (with each series voting as a separate class)
at the time Outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and provided further that (subject to the provisions of Section 6.01)
the Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good faith by its
board of directors, the executive committee, or a trust committee of two or more
directors or responsible officers of the Trustee, which may include Trust
Officers, shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected not joining in the giving of said
direction, it being understood that the Trustee shall have no duty to ascertain
whether or not such actions or forebearances are unduly prejudicial to such
Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
Section 6.10. Waiver of Past Defaults.
------------------------
Prior to the declaration of the acceleration of the maturity of the
Securities of any series as provided in Section 6.01, the Holders of a majority
in aggregate principal amount of the
35
<PAGE>
Securities of such series at the time Outstanding may on behalf of the Holders
of all the securities of such series waive any past default or Event of Default
described in clause (c) of Section 6.01 (or, in the case of an event specified
in clause (d) of Section 6.01 which relates to less than all series of
Securities then Outstanding, the Holders of a majority in aggregate principal
amount of the Securities then Outstanding affected thereby (each series voting
as a separate class) may waive any such default or Event of Default, or, in the
case of an event specified in clause (d) (if the Event of Default under clause
(d) relates to all series of Securities then Outstanding),(e) or (f)of Section
6.01 the Holders of Securities of a majority in principal amount of all the
Securities then Outstanding (voting as one class) may waive any such default or
Event of Default), and its consequences except a default in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each Security affected. In the case of any such waiver,
the Company, the Trustee and the Holders of the Securities of such series shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 6.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances.
-----------------------------------------------------
The Trustee shall, within ninety days after the occurrence of a default
with respect to the Securities of any series, give notice of all defaults with
respect to that series known to the Trustee (i) if any Bearer Securities of that
series are then Outstanding, to the Holders thereof, by publication at least
once in an Authorized Newspaper in the Place of Payment, (ii) if any Bearer
Securities of that series are then Outstanding, to all Holders thereof who have
filed their names and addresses with the Trustee, by mailing such notice to such
Holders at such addresses and (iii) to all Holders of then Outstanding
Registered Securities of that series, by mailing such notice to such Holders at
their addresses as they shall appear in the registry books, unless in each case
such defaults shall have been cured before the mailing or publication of such
notice (the term "defaults") for the purpose of this Section being hereby
defined to mean any event or condition which is, or with notice or lapse of time
or both would become, an Event of Default); provided that, except in the case of
default in the payment of the principal of or interest or Additional Amounts, if
any, on any of the Securities of such series or in the payment of any sinking or
purchase fund installment, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee comprised of two or more directors or trustees and/or
responsible officers of the Trustee, which may include Trust Officers, in good
faith determines that the withholding of such notice is in the interests of the
Securityholders of such series.
36
<PAGE>
Section 6.12. Right of Court to Require Filing of Undertaking to
Pay Costs.
--------------------------------------------------
All parties to this Indenture agree, and each Holder of any Security or
coupon 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, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit (other than the Trustee) 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 Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Outstanding Securities of such series, or, in
the case of any suit relating to or arising under clause (d) of Section 6.01 (if
the suit relates to Securities of more than one but less than all series), 10%
in aggregate principal amount of Securities Outstanding affected thereby, or in
the case of any suit relating to or arising under clause (d) (if the suit under
clause (d) relates to all the Securities then Outstanding), (e) or (f) of
Section 6.01, 10% in aggregate principal amount of all Securities Outstanding,
or to any suit instituted by any Securityholder for the enforcement of the
payment of the principal of or interest on any Security on or after the due date
expressed in such Security or any date fixed for redemption.
The Holders of a majority in principal amount of the Outstanding
Securities of such series by notice to the Company and the Trustee may rescind
an acceleration and its consequences if (i) all existing Events of Default with
respect to the Securities of such series, other than the non-payment of the
principal of the Securities which have become due solely by such declaration of
acceleration, have been cured or waived, (ii) the Company has paid or deposited
with the Trustee a sum sufficient to pay the whole amount then due and payable
on such Securities and any coupons appertaining thereto for principal and
interest and Additional Amounts, if any, with interest upon the overdue
principal and, to the extent that payment of such interest shall be legally
enforceable, upon overdue installments of interest or any Additional Amounts, at
the rate or rates borne by or provided for 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, and (iii) the
rescission would not conflict with any judgment or decree. No such rescission
shall have any effect on any subsequent default or impair any right consequent
thereon.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee.
------------------
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers hereunder and use the same degree of care
and skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
<PAGE>
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. The Trustee, however, shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer or officers of the
Trustee, which may include Trust Officers, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.09.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
except to the extent required by law. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company.
(g) The Trustee shall not be liable with respect to any action taken or
omitted to be taken or with respect to exercising any trust or power conferred
upon the Trustee, under this Indenture, by it in good faith in accordance with
the direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series given pursuant to Section 6.09 of this
Indenture, relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee; and
(h) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability other than for
its own negligence, willful misconduct or bad faith, 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.
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<PAGE>
Section 7.02. Rights of Trustee.
------------------
Except as provided in Section 7.01:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person or Persons. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate of the Company or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith and in
reliance on such Officers' Certificate or Certificates or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(e) Any demand, request, direction or notice from the Company mentioned
herein shall, unless otherwise specifically provided, be sufficiently evidenced
by a Company Request or Company Order and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution.
(f) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel, shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(g) 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, to
the extent necessary and consistent with each inquiry or investigation, the
books, records and premises of the Company, personally or by agent or attorney.
Section 7.03. Individual Rights of Trustee.
-----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities or coupons and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee, however, must
comply with Sections 7.10 and 7.11.
39
<PAGE>
Section 7.04. Trustee's Disclaimer.
---------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for the Company's
use of the Securities or the proceeds from the Securities; and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
Section 7.05. Notice of Defaults.
-------------------
If a Default occurs and is continuing with respect to Securities and if
it is known to the Trustee, the Trustee shall give to each Holder of Securities
of any series to which such Default relates, in the manner and to the extent
provided in TIA Section 313(c), and otherwise as provided in Section 13.02 of
this Indenture, notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest or Additional
Amounts, if any, on a Security of any series, or in the payment of any sinking
or purchase fund installment, the Trustee may withhold the notice if and so long
as the board of directors of the Trustee, the executive committee or a trust
committee of directors and/or of responsible officers, which may include Trust
Officers, of the Trustee in good faith determines that withholding the notice is
in the interests of Holders of Securities of such series or the coupon
appertaining thereto.
Section 7.06. Reports by Trustee to Holders.
------------------------------
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b)(2). Reports to Holders
pursuant to this Section 7.06 shall be transmitted in the manner and to the
extent provided in TIA Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which any Securities are
listed.
The Company agrees to notify the Trustee whenever the Securities of any
series become listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
---------------------------
The Company shall pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree in
writing 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). The Company shall reimburse the Trustee and any predecessor
Trustee upon request for all reasonable out-of-pocket expenses and advances
incurred or made by it. Such expenses shall include the reasonable compensation
and expenses of the Trustee's agents and counsel. The Company shall indemnify
each of the Trustee and any predecessor Trustee against any loss damage claim,
expense or liability (including legal fees and expenses) incurred by it in
connection with the acceptance and administration of the trust and the
performance of its duties hereunder, including the costs and expenses and
disbursements 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 notify the Company promptly of any
40
<PAGE>
claim asserted against it for which it may seek indemnity; provided, however,
that the failure to give the Company any notice of any claim shall not in any
way affect the rights of the Trustee hereunder to indemnification for such
claim. The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee or any predecessor Trustee to the extent
due to its own negligence, willful misconduct or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest or Additional Amounts, if any, on the Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (e) and (f) occurs, the expenses and the
compensation for services are intended to constitute expenses of administration
under any Bankruptcy Law. The term "Bankruptcy Law" means Title 11, U.S. Code.
The provisions of this Section 7.07 shall survive termination of this
Indenture or the resignation and removal of the Trustee.
Section 7.08. Replacement of Trustee.
-----------------------
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Outstanding Securities may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee with
respect to the Securities. The Company may by or pursuant to a Board Resolution
remove the Trustee with respect to all Securities if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As soon as possible
after that, the retiring Trustee shall, upon payment of its charges, transfer
all property held by it as Trustee to the successor Trustee, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall give notice of its succession to each
Holder of Securities.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the Outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
41
<PAGE>
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Section 7.09. Successor Trustee by Merger, etc.
---------------------------------
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
------------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall have a combined capital
and surplus of at least $5,000,000 as set forth in its most recent published
annual report of condition. If any series of Securities is admitted to trading
on the New York Stock Exchange, Inc., or any successor thereto, the Trustee
shall maintain an office or agency in The Borough of Manhattan, The City of New
York, New York as long as such series of Securities shall be so admitted. The
Trustee shall comply with TIA Section 310(b).
Section 7.11. Preferential Collection of Claims against Company.
--------------------------------------------------
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE EIGHT
DISCHARGE OF INDENTURE
Section 8.01. Termination of the Company's Obligations.
-----------------------------------------
The Company may terminate all of its obligations under the Securities
of any series and this Indenture with respect to such series if all Securities
of such series previously authenticated and delivered (other than destroyed,
lost or stolen Securities of such series which have been replaced or paid) and
all coupons appertaining thereto (other than (i) coupons appertaining to Bearer
Securities surrendered for exchange for Registered Securities and maturing after
such exchange, whose surrender is not required or has been waived as provided in
Section 2.06, (ii) Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.07, and
(iii) Securities and coupons for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section 4.03
or 8.04) have been delivered to the Trustee for cancellation or if:
(1) the Securities of such series mature within one year or all
of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of
redemption;
42
<PAGE>
(2) the Company irrevocably deposits in trust with the Trustee
money or Government Obligations sufficient to pay principal of and any
interest and Additional Amounts on the Securities of such series to
maturity or redemption, as the case may be (other than moneys paid to
the Company or discharged from trust in accordance with Section 4.03
or 8.04); and
(3) the Company shall have 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.
The Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
7.07, 7.08, and 8.03 with respect to the Securities of such series, however,
shall survive so long as any principal of, interest, if any, or any Additional
Amounts on the Securities of such series, and coupons appertaining thereto,
remains unpaid. Thereafter the Company's obligations in Section 7.07
shall survive.
After a deposit of such moneys, and delivery of the Officers'
Certificate and Opinion of Counsel required by clause (3) above, the Trustee
upon request shall acknowledge in writing the discharge of the Company's
obligations under the Securities of such series and this Indenture with respect
to the Securities of such series except for those surviving obligations
specified above.
Section 8.02. Termination of the Company's Obligations under Certain
Circumstances.
------------------------------------------------------
Unless otherwise provided in a Board Resolution of the Company
delivered to the Trustee pursuant to Section 2.01 or an indenture supplemental
hereto with respect to the Securities of any series, the Company, at its option,
either (a) shall be deemed to have been Discharged (as defined below) from its
obligations with respect to the Securities of any series, and coupons
appertaining thereto, on the ninety-first day after the applicable conditions
set forth below have been satisfied or (b) shall cease to be under any
obligation to comply with any term, provision or condition set forth in Sections
4.04, 4.05, 4.06 and 4.07 and Sections 6.01 and 6.02 as they relate to Section
6.01(d), with respect to the Securities of any series and any coupons
appertaining thereto and any other covenants provided in the Board Resolution of
the Company (except Section 7.07) delivered to the Trustee pursuant to Section
2.01 or an indenture supplemental hereto with respect to the Securities of such
series and any coupons appertaining thereto at any time after the applicable
conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series and any coupons appertaining
thereto (A) money in an amount, or (B) Government Obligations which
through the payment of interest and principal in respect thereof in
accordance with their terms will provide, not later than one day (or,
if such day is a Legal Holiday, the first day preceding such day which
is not a Legal Holiday)
43
<PAGE>
before the due date of any payment, money in an amount, or (C) a
combination of (A) and (B), sufficient, in the opinion of a recognized
firm of Independent Public Accountants selected by the Company
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge each installment of principal (including
mandatory sinking fund payments) of, and interest, if any, and
Additional Amounts, if any, on the Outstanding Securities of such
series on the dates such installments of principal, interest, if any,
and Additional Amounts, if any, are due (taking into account any
redemption pursuant to optional sinking fund payments notice of which
redemption is provided to the Trustee at the time of the deposit
referred to in this paragraph (1));
(2) if the Securities of such series are then listed on the New
York Stock Exchange, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Company's exercise of its
option under this paragraph would not cause such Securities to be
delisted;
(3) no Event of Default, or event which with the giving of notice
or lapse of time, or both, would become an Event of Default, with
respect to the Securities of such series shall have occurred and be
continuing on the date of such deposit and the Company shall have
furnished to the Trustee an Officers' Certificate to such effect; and
(4) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders of the Securities of such series
will not recognize income, gain or loss for United States Federal
income tax purposes as a result of the exercise of the option under
this Section 8.02 and will be subject to United States Federal income
tax on the same amount and in the same manner and at the same times as
would have been the case if such option had not been exercised, and,
in the case of Securities being Discharged, such opinion shall be
accompanied by a private letter ruling to that effect received from
the United States Internal Revenue Service or a revenue ruling
pertaining to a comparable form of transaction to that effect
published by the United States Internal Revenue Service.
"Discharged" means, for purposes of this Section 8.02, that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by, and obligations under, the Securities of any series and to have satisfied
all the obligations under this Indenture relating to the Securities of such
series (and the Trustee, at the expense of the Company, shall execute such
instruments as may be requested by the Company acknowledging the same), except
(A) the rights of Holders of Securities of such series or the coupons, if any,
appertaining thereto, as the case may be, to receive, solely from the trust fund
described above, payment of the principal of and interest, if any, and
Additional Amounts, if any, on such Securities when such payments are due; (B)
the Company's obligations with respect to such Securities under Sections 2.03,
2.04, 2.05, 2.06, 2.07, 7.07, 7.08 and 8.03; and (C) the rights, powers, duties
and immunities of the Trustee hereunder. Notwithstanding the satisfaction and
discharge of this Indenture with respect
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to any series of Securities, the obligations of the Company to the Trustee and
any predecessor Trustee under Section 7.07 shall survive.
Section 8.03. Application of Trust Money.
---------------------------
All moneys and Government Obligations deposited with the Trustee
pursuant to Sections 8.01 and 8.02 and, with respect to Government Obligations,
the principal and interest in respect thereof, with respect to Securities of any
series shall be held irrevocably in trust and applied by it to the payment in
accordance with the provisions of the Securities of such series and this
Indenture, either directly or through any Paying Agent for the Securities of
that series (including the Company if acting as its own Paying Agent), to the
Holders of the Securities of such series or the coupons, if any, appertaining
thereto, as the case may be, for the payment or redemption of which such money
has been deposited with the Trustee, of all sums due and to become due thereon
for principal, interest, if any, and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Section 8.04. Repayment to Company.
---------------------
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time under this
Article Eight. Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, under this Article Eight in trust for the payment of the
principal of, interest or Additional Amounts, if any, on any Security and
remaining unclaimed for two years after such principal, interest or Additional
Amounts have become due and payable shall be paid to the Company on 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.
Section 8.05. Indemnity for Government Obligations.
-------------------------------------
The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited Government
Obligations or the principal and interest received on such Government
Obligations.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
---------------------------
The Company, when authorized by a Board Resolution, and the Trustee may
amend or supplement this Indenture or the Securities without notice to or
consent of any Securityholder:
(a) to convey, transfer, assign, mortgage or pledge to the trustee as
security for the Securities of one or more series any property or assets;
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(b) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Company pursuant to Article
Five;
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as its Board of Directors and the Trustee
shall consider to be for the protection of the Holders of Securities or coupons
appertaining thereto, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement of all
or any of the several remedies provided in this Indenture as herein set forth;
provided, that in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for immediate enforcement
upon such an Event of Default or may limit the remedies available to the Trustee
upon such an Event of Default or may limit the right of the Holders of a
majority in aggregate principal amount of the Securities of such series to waive
such an Event of Default.
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as the Board of Directors may deem
necessary or desirable, provided that no such action shall adversely affect the
interests of the Holders of the Securities or coupons appertaining thereto;
(e) to establish the form or terms of Securities of any series or of
the coupons appertaining to such Securities as permitted by Section 2.01;
(f) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series;
(g) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions (including restrictions relating to payment in the
United States) on the payment of principal of any premium or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange for Registered
Securities, to permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations or to permit the issuance of
Securities in uncertificated form, provided that any such actions shall not
adversely affect the interest of the Holders of the Securities of any series or
any related coupons in any material respect; or
(h) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or more series
of Securities), provided that any such addition, change or elimination shall
neither (A) apply to any Security or any series created prior to the execution
of such supplemental indenture and entitled to the benefit of such provision nor
(B) modify the rights of the Holder of any such Security with respect to such
provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may
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be therein contained and to accept the conveyance, transfer, assignment,
mortgage or pledge of any property thereunder, but the Trustee 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.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time Outstanding, notwithstanding any of the provisions of Section 9.02.
Section 9.09 With Consent of Holders.
------------------------
With the consent of the Holders of not less than a majority of the
principal amount of the Securities at the time Outstanding in each series
affected by such supplemental indenture (voting as one class), the Company, when
authorized by a resolution of its Board of Directors, and the Trustee may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the coupons appertaining to such
Securities; provided, that no such supplemental indenture shall, without the
consent of each Securityholder affected:
(1) reduce the amount of Securities whose Holders must consent to
an amendment, supplement or waiver or reduce the requirements of
Section 11.09 establishing a quorum or voting or amend this Section
9.02;
(2) reduce the rate or rates of or extend the time for payment of
interest or Additional Amounts, if any, on any Security;
(3) reduce the principal of or extend the fixed maturity of any
Security;
(4) modify or effect in any manner adverse to the Holders of
Securities the terms and conditions of the obligations of the Company
in respect of its obligations hereunder;
(5) waive a default in the payment of the principal of or
interest or Additional Amounts, if any, on any Security;
(6) impair the right to institute suit for the enforcement of any
payment on or with respect to any series of Securities;
(7) change a Place of Payment; or
(8) make any Security payable in currency other than that stated
in the Security.
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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 Holders of Securities of such series, or of coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series or of the coupons appertaining to Securities of such other
series.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give a notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security Register, (ii) if any Bearer Securities of a series affected thereby
are then Outstanding, to the Holders thereof who have filed their names and
addresses with the Trustee, by mailing a notice thereof by first-class mail to
such Holders at such addresses as were so furnished to the Trustee and (iii) if
any Bearer Securities of a series affected thereby are then Outstanding, to all
Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in the Place of Payment, and in each case such notice shall
set forth in general terms the substance of such supplemental indenture. Any
failure the Trustee to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 9.03. Compliance with Trust Indenture Act.
------------------------------------
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
----------------------------------
A consent to an amendment, supplement or waiver to any other action
hereunder by a Holder of a Security of any series shall bind the Holder and
every subsequent Holder of a Security or portion of a Security of that series
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to his Security or portion
of a Security. Such revocation shall be effective only if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver or
other action becomes effective.
After an amendment, supplement or waiver with respect to a series of
Securities becomes effective, it shall bind every Holder of Securities of that
series.
Section 9.05. Notation on or Exchange of Securities.
--------------------------------------
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may request the Holder of the Security to deliver it to the Trustee.
The Trustee may then place an appropriate notation on the Security about the
changed terms and return it to the Holder.
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Alternatively, if the Company so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms.
Section 9.06 Trustee to Sign Amendments, etc.
--------------------------------
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities (present or potential), or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment or supplement, the Trustee shall be entitled to receive and (subject
to Sections 7.01 and 7.02) shall be fully protected in relying upon an Opinion
of Counsel stating that such amendment or supplement is authorized or permitted
by this Indenture.
ARTICLE TEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 10.01. Applicability of Article.
-------------------------
Securities of any series which are repayable at the option of the
Holders thereof before their maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their maturity shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the Company, at its option, shall deliver or surrender the same to the Trustee
with a directive that such Securities be cancelled. Notwithstanding anything to
the contrary contained in this Article Ten, in connection with any repayment of
Securities, the Company may arrange for the purchase of any Securities by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Holders of such Securities on or before the
close of business on the repayment date an amount not less than the repayment
price payable by the Company on repayment of such Securities, and the obligation
of the Company to pay the repayment price of such Securities shall be satisfied
and discharged to the extent such payment is so paid by such purchasers.
ARTICLE ELEVEN
CONCERNING THE SECURITYHOLDERS
Section 11.01. Evidence of Action Taken by Securityholders.
--------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Securityholders in person or by
agent duly appointed in writing. If Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of such series may, alternatively, be embodied in and evidenced by
the record of Holders of Securities of such series voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities of such series duly called and held in accordance with the
provisions of Sections 11.06 through 11.11, or a combination of such instruments
such record. Except as herein otherwise
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expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments and
any such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such instrument
or instruments and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding by any
Person of a Security, be sufficient for any purpose of this Indenture and
(subject to Section 7.02) conclusive in favor of the Trustee and the Company, if
made in the manner provided in Section 11.02. The record of any meeting of
Holders of Securities shall be proved in the manner provided in Section 11.11.
Section 11.02. Proof of Execution of Instruments and of Holding of
Securities.
---------------------------------------------------
The execution of any instrument by a Securityholder or his agent or
proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any instrument
may be proved by the certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgements of deeds or administer oaths
that the person executing such instruments acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is by or on behalf of
any legal entity other than an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority of the person executing the
same. The fact of the holding by any Holder of a Bearer Security of any series,
and the identifying number of such Security and the date of his holding the
same, may be proved by the production of such Security or by a certificate
executed by any trust company, bank, banker or recognized securities dealer
wherever situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall be dated
and shall state that on the date thereof a Security of such series bearing a
specified identifying number was deposited with or exhibited to such trust
company, bank, banker or recognized securities dealer by the person named in
such certificate. Any such certificate may be issued in respect of one or more
Bearer Securities of one or more series specified therein. The holding by the
person named in any such certificate of any Bearer Security or Securities of any
series specified therein shall be presumed to continue for a period of one year
from the date of such certificate unless at the time of any determination of
such holding (1) another certificate bearing a later date issued in respect of
the same Security or Securities shall be produced, or (2) the Security or
Securities of such series specified in such certificate shall be produced by
some other person, or (3) the Security or Securities of such series specified in
such certificate shall have ceased to be Outstanding. Subject to Section 7.02,
the fact and date of the execution of any such instrument and the amount and
numbers of Securities of any series held by the person so executing such
instrument and the amount and numbers of any Security or Securities for such
series may also be proven in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee for such series or in any other
manner which the Trustee for such series may deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security Register or by a certificate of the
Security Registrar.
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(c) 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.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to an Officers' Certificate delivered to the
Trustee, fix in advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite percentage of Outstanding Securities or Outstanding Securities of a
series, as the case may be, have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for that purpose the Outstanding Securities or Outstanding Securities of the
series, as the case may be, shall be computed as of such record date.
Section 11.03. Holders to be Treated as Owners.
--------------------------------
The Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the person in whose name any Security shall be registered
upon the Security Register for such series as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of
this Indenture, interest on and any Additional Amounts payable in respect of
such Security and for all other purposes; and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary. The Company, the Trustee and any agent of the Company or
the Trustee may treat the Holder of any Bearer Security and the Holder of any
coupon as the absolute owner of such Bearer Security or coupon (whether or not
such Bearer Security or coupon shall be overdue) for the purpose of receiving
payment thereof or on account thereof and for all other purposes and neither the
Company, the Trustee, nor any agent of the Company or the Trustee shall be
affected by any notice to the contrary. All such payments so made to any such
person, or upon his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Security or coupon.
None of the Company, the Trustee or any paying agent or the Security
Registrar 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 Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
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Section 11.04. Securities Owned by Company Deemed Not Outstanding.
---------------------------------------------------
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of any or all series have concurred in any
direction, consent or waiver under this Indenture, Securities which are owned by
the Company or any other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of the Company or any such
obligor shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which the Trustee knows are 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 any other obligor on the Securities. In case of a dispute as to
such right, the advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice. Upon request of the
Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the Company
to be owned or held by or for the account of any of the above-described persons;
and, subject to Section 7.02, 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 such determination.
Section 11.05. Right of Revocation of Action Taken.
------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 11.01, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Securities of any or all series,
as the case may be, specified in this Indenture in connection with such action,
any Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article, revoke such action
so far as concerns such Security. Except as aforesaid any such action taken by
the Holder of any Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Security and of any Securities issued
in exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon any
such Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Securities
affected by such action.
Section 11.06. Meetings of Holders.
--------------------
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Section 11.06 to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
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Section 11.07. Call, Notice and Place of Meetings.
-----------------------------------
(a) The Trustee may at any time call a meeting of Holders of Securities
of any series for any purpose specified in Section 11.06, to be held at such
time and at such place in the Borough of Manhattan, The City of New York, or in
[Boston, Massachusetts] as the Trustee shall determine or, with the approval of
the Company, at any other place. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 13.02 not less than 21 nor more than
180 days prior to the date fixed for the meeting.
(b) In case at any time the Company or the Holders of at least 10% in
principal amount of the Outstanding Securities of any series shall have
requested the Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 11.06, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, the Company or the
Holders of Securities of such series in the amount above specified, as the case
may be, may determine the time and the place in the Borough of Manhattan, The
City of New York, the City of Boston, Massachusetts, or in such other place as
shall be determined and approved by the Company, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
Subsection (a) of this Section.
Section 11.08. Persons Entitled to Vote at Meetings.
-------------------------------------
To be entitled to vote at any meeting of Holders of any series, a
Person shall be (1) a Holder of one or more Outstanding Securities of such
series, or (2) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities or any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 11.09. Quorum; Action.
---------------
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case, the meeting may be adjourned for a period determined by the
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 11.07(a), except that
any such notice by publication need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned
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meeting shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Section 11.10. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
-------------------------------------------------------
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holdings
of Securities shall be proved in the manner specified in Section 11.02 and the
appointment of any proxy shall be provided in the manner specified in Section
11.02 or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 11.02 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 11.02 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 11.07(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect to any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of Securities of such series or proxy.
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(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 11.07 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
Section 11.11. Counting Votes and Recording Action of Meetings.
------------------------------------------------
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed signatures of the Holders of Securities of such series or their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate, of
the proceedings of each meeting of Holders of Securities of any series shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 11.07 and, if applicable, Section 11.09.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
ARTICLE TWELVE
SINKING FUNDS
Section 12.01. Applicability of Article.
-------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise permitted or
required by any form of Security of such series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is referred to in this Article Twelve as a
"mandatory sinking fund payment," and any payment in excess of such minimum
amount provided for by the terms of Securities of such series is herein referred
to as an "optional sinking fund payment." If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 12.02. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
Section 12.02. Satisfaction of Sinking Fund Payments with Securities.
------------------------------------------------------
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series to be made pursuant to the
terms of such Securities as provided for by the terms of such series (1) deliver
Outstanding Securities of such series (other
55
<PAGE>
than any of such Securities previously called for redemption or any of such
Securities in respect of which cash shall have been released to the Company),
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto, and (2) apply as a credit Securities of such
series which have been redeemed either at the election of the Company pursuant
to the terms of such series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such series of Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly. If as a result of the delivery or credit
of Securities of any series in lieu of cash payments pursuant to this Section
12.02, the principal amount of Securities of such series to be redeemed in order
to exhaust the aforesaid cash payment shall be less than $100,000, the Trustee
need not call Securities of such series for redemption, except upon Company
request, and such cash payment shall be held by the Trustee or a Paying Agent
for Securities of that series and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall at the
request of the Company from time to time pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon delivery by
the Company to the Trustee of Securities purchased by the Company having an
unpaid principal amount equal to the cash payment requested to be released to
the Company.
Section 12.03. Redemption of Securities for Sinking Fund.
------------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 12.02, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.03 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.04. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.05 and 3.06.
56
<PAGE>
ARTICLE THIRTEEN
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.
-----------------------------
If any provision of this Indenture limits, qualifies, or conflicts with
the duties which are required to be included in this Indenture by the TIA
Section 310 to 317, inclusive, such duties set forth in the TIA shall control.
Section 13.02. Notices.
--------
Except as otherwise expressly provided herein or in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, any notice or communication shall be sufficiently given if in writing
and delivered in Person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
Liberty Financial Companies, Inc.
600 Atlantic Avenue, 24th Floor
Boston, Massachusetts 02210-2214
Attention: Treasurer
with a copy to:
Choute, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109-2891
Attention: P. William Gelnaw, Jr., Esq.
if to the Trustee:
[!]
[address]
Attention: Corporate Trust Trustee Administration
The Company or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder of a Registered Security
shall be mailed to him by first class mail at his address as it appears on the
Security Register and shall be sufficiently given to him if so mailed within the
time prescribed. Failure to mail a notice or communication to a Holder of any
Registered Security or any defect in it shall not affect its
57
<PAGE>
sufficiency with respect to other Securityholders. If a notice or communication
is mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.
In case, by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Any notice required or permitted to be given to a Holder of Bearer
Securities of any series shall be deemed to be properly given if such notice is
published in an Authorized Newspaper on two separate days within the time
prescribed.
In case, by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause, it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.
Where this Indenture provides for notice in any manner, such notice may
be waived, in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that, if the Company so elects, any published notice
may be in an official language of the country of publication.
Section 13.03. Communication by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
Section 13.04. Certificate and Opinion as to Conditions Precedent.
---------------------------------------------------
Upon any request or application by the Company to the Trustee to take
any action under this Indenture (except that, in the case of any request or
application as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular request
or application, no additional certificate or opinion need be furnished), the
Company shall furnish to the Trustee:
58
<PAGE>
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 13.05. Statements Required in Certificate or Opinion.
----------------------------------------------
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition and the definitions
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
Section 13.06. When Treasury Securities Disregarded.
-------------------------------------
In determining whether the Holders of the required principal amount of
Securities or a series thereof have concurred in any direction, waiver or
consent, Securities owned by the Company or any other obligor upon the
Securities or by any Affiliate of the Company or such obligor shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Securities and that the pledgee is
not the Company or any other obligor upon the Securities or any Affiliate of the
Company or such obligor.
Section 13.07. Legal Holidays.
---------------
A "Legal Holiday", except as otherwise provided in the form of Security
of any particular series pursuant to the provisions of this Indenture, with
respect to any Place of Payment means a Saturday, a Sunday or a day on which
banking institutions or trust companies in that Place of Payment are not
required to be open. Except as provided otherwise in the applicable Security, if
a payment date with respect to such payment is a Legal Holiday at any Place of
Payment,
59
<PAGE>
payment due on such Security with respect to such Security may be made at such
place on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue with respect to such payment for the intervening period.
Section 13.08. Governing Law.
--------------
The laws of the State of New York applicable to contracts made and
performed in said state shall govern this Indenture and the Securities and
coupons, without regard to choice of law principles. Unless the form of Security
provides otherwise, all money or dollar amounts expressed herein or in the
Securities refer to United States dollars.
Section 13.09. No Adverse Interpretation of Other Agreements.
----------------------------------------------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 13.10. Successors.
-----------
All agreements of the Company in this Indenture and the Securities
shall bind its successor and assigns, whether so expressed or not. All
agreements of the Trustee in this Indenture shall bind its successor.
Section 13.11. Duplicate Originals.
--------------------
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
Section 13.12. Securities in Foreign Currencies.
---------------------------------
Wherever this Indenture provides for any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same currency, or any
distribution to Holders of Securities, in the absence of any provision to the
contrary in the form of Security of any particular series, any amount in respect
of any Security denominated in a currency other than United States dollars shall
be treated for any such action, determination or distribution as that amount of
United States dollars that could be obtained for such amount on such reasonable
basis of exchange and as of such date as the Company may specify in a written
notice to the Trustee, or in the absence of such notice, as the Trustee may
determine.
60
<PAGE>
* * * * *
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.
SIGNATURES
LIBERTY FINANCIAL COMPANIES, INC.
Dated: as of __________ By: ___________________________
Name:
Title:
[!],
AS TRUSTEE
By: ___________________________
Name:
Title:
Attest:
Title: (SEAL)
Dated: as of
LIBERTY FINANCIAL COMPANIES, INC.
[_______] Note due [_______],[_______]
[Registered] CUSIP [_______]
No. R-1 U.S. $[_______]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITORY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Liberty Financial Companies, Inc., a corporation organized and existing
under the laws of the State of Massachusetts (hereinafter called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of [_______] DOLLARS ($[_______]) on
[_______], [_______] 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 on [_______], at the rate of [_______] % per annum until the
principal hereof is paid or such payment is duly provided for. 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
<PAGE>
name this Note (or one or more predecessor Notes) is registered at the close of
business on the next preceding [_______] and [_______], respectively (each
respectively a "Record Date"), subject to certain exceptions as provided in the
Indenture. Payment of the principal of, and interest on, this Note will be made
at the designated office or agency of the Company maintained for such purpose in
The City of New York, New York [or the City of Boston, Massachusetts] 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 debt or, at the option of the
Company, interest so payable may be paid by check to the order of said Holder
mailed to his address appearing on the Security Register. Any interest not so
punctually paid or duly provided for shall be payable as provided in the Note.
Interest on this Note will be computed on the basis of a 360-day year of twelve
30-day months.
Reference is hereby made to the further provisions of this Note 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 by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, Liberty Financial Companies, Inc. has caused this
instrument to be duly executed under its corporate seal.
LIBERTY FINANCIAL COMPANIES, INC.
By ______________________________
Title:
Attest: _______________________
Secretary
Dated: [_______]
<PAGE>
Trustee's Certificate of Authentication
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
[ ],
as Trustee
By ______________________________
Authorized Signatory
<PAGE>
[Reverse of Note]
LIBERTY FINANCIAL COMPANIES, INC.
[_______] % Note due [_______]
This Note is one of a duly authorized issue of Securities of the
Company of a series hereinafter specified, all issued and to be issued under an
Indenture dated as of [_______] (herein called the "Indenture"), between the
Company and [ ], 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 Company, the Trustee and the Holder of the Securities and the terms upon
which the Securities are, and are to be, authenticated and delivered. The
Securities may be issued in one or more series, the terms of which different
series may vary as provided in the Indenture. This Note is one of a series of
the Securities of the Company designated as its [_______]% Notes due [_______]
(herein called the "Notes"), limited in aggregate principal amount to
$[_______], except as otherwise provided in the Indenture.
The Notes are not redeemable prior to maturity and are not entitled to
any sinking fund. If an Event of Default shall occur with respect to the Notes,
the principal of the Notes may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of the
Notes, upon which the Company, at its option, shall be deemed to have been
Discharged from its obligations with respect to the Notes or shall cease to be
under any obligation to comply with certain restrictive covenants of the
Indenture.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Outstanding Securities affected by such amendment or
supplement voting as one class. Without the consent of any Holder, the Company
and the Trustee may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency. Subject to certain
exceptions, any past default or Event of Default may be waived by the Holders of
at least a majority in principal amount of the Outstanding Securities of any
series affected on behalf of the Holders of the Securities of that series or the
Holders of at least a majority in principal amount of all the Outstanding
Securities voting as one class. Any such consent or waiver by the Holder of this
Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note or upon any Note issued upon the transfer hereof
or in exchange herefor or in lieu hereof.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and interest on, this Note
at the times, place, and rate, and in the coin or currency, herein prescribed.
4
<PAGE>
As provided in the Indenture and subject to certain limitations therein
set forth, this Note is transferable on the Security Register of the Company,
upon surrender of this Note for transfer at the office or agency of the Company
in The City of New York, New York, [or the City of Boston, Massachusetts] duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar, duly executed by the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and integral multiples thereof. As provided in the
Indenture and subject to certain limitations therein set forth, this Note is
exchangeable for a like aggregate principal amount of Notes of different
authorized denominations as requested by the Holder surrendering the same.
No service charge will be made for any such 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.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment as herein provided and for all other
purposes whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse shall be had for the payment of the principal of, or the
interest on, this Note or for any claim based hereon or otherwise in any manner
in respect hereof, or in respect of the Indenture, against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or of any predecessor or successor corporation, whether by virtue of any
constitutional provision or statute or rule of law, or by the enforcement of any
assessment or penalty or in any other manner, all such liability being expressly
waived and released by the acceptance hereof and as part of the consideration
for the issue hereof.
All capitalized terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
5
================================================================================
LIBERTY FINANCIAL COMPANIES, INC.
to
[ ]
Trustee
JUNIOR SUBORDINATED INDENTURE
Dated as of [ ]
================================================================================
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C> <C>
Section 1.1 Definitions....................................................................1
Section 1.2 Compliance Certificate and Opinions............................................8
Section 1.3 Forms of Documents Delivered to Trustee........................................9
Section 1.4 Acts of Holders...............................................................10
Section 1.5 Notices, Etc. to Trustee and Company..........................................11
Section 1.6 Notice to Holders; Waiver.....................................................11
Section 1.7 Conflict with Trust Indenture Act.............................................11
Section 1.8 Effect of Headings and Table of Contents......................................11
Section 1.9 Successors and Assigns........................................................11
Section 1.10 Separability Clause...........................................................12
Section 1.11 Benefits of Indenture.........................................................12
Section 1.12 Governing Law.................................................................12
Section 1.13 Non-Business Days.............................................................12
ARTICLE II.
SECURITY FORMS
Section 2.1 Forms Generally...............................................................12
Section 2.2 Form of Face of Security......................................................13
Section 2.3 Form of Reverse of Security...................................................16
Section 2.4 Additional Provisions Required in Global Security.............................19
Section 2.5 Form of Trustee's Certificate of Authentication...............................19
ARTICLE III.
THE SECURITIES
Section 3.1 Title and Terms...............................................................19
Section 3.2 Denominations.................................................................22
Section 3.3 Execution, Authentication, Delivery and Dating................................22
Section 3.4 Temporary Securities..........................................................23
Section 3.5 Registration, Transfer and Exchange...........................................24
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities..............................25
Section 3.7 Payment of Interest; Interest Rights Preserved................................26
Section 3.8 Persons Deemed Owners.........................................................27
Section 3.9 Cancellation..................................................................27
Section 3.10 Computation of Interest.......................................................27
Section 3.11 Deferrals of Interest Payment Dates...........................................27
Section 3.12 Right of Set-Off..............................................................28
Section 3.13 Agreed Tax Treatment..........................................................29
Section 3.14 Extension of Stated Maturity; Adjustment of Stated Maturity Upon an Exchange..29
<PAGE>
Section 3.15 CUSIP Numbers.................................................................29
ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture.......................................30
Section 4.2 Application of Trust Money....................................................31
Section 4.3 Satisfaction, Discharge and Defeasance of Securities of Any Series............31
ARTICLE V.
REMEDIES
Section 5.1 Events of Default.............................................................32
Section 5.2 Acceleration of Maturity; Rescission and Annulment............................33
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee...............35
Section 5.4 Trustee May File Proofs of Claim..............................................35
Section 5.5 Trustee May Enforce Claim Without Possession of Securities....................36
Section 5.6 Application of Money Collected................................................36
Section 5.7 Limitation on Suits...........................................................37
Section 5.8 Unconditional Right of Holders to Receive Principal, Premium and Interest.....37
Section 5.9 Restoration of Rights and Remedies............................................38
Section 5.10 Rights and Remedies Cumulative................................................38
Section 5.11 Delay or Omission Not Waiver..................................................38
Section 5.12 Control by Holders............................................................38
Section 5.13 Waiver of Past Defaults.......................................................39
Section 5.14 Undertaking for Costs.........................................................39
Section 5.15 Waiver of Usury, Stay or Extension Laws.......................................40
ARTICLE VI.
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities...........................................40
Section 6.2 Notice of Defaults............................................................41
Section 6.3 Certain Rights of Trustee.....................................................41
Section 6.4 Not Responsible for Recitals or Issuance of Securities........................42
Section 6.5 May Hold Securities...........................................................42
Section 6.6 Money Held in Trust...........................................................43
Section 6.7 Compensation and Reimbursement................................................43
Section 6.8 Disqualification; Conflicting Interests.......................................43
Section 6.9 Corporate Trustee Required; Eligibility.......................................44
Section 6.10 Resignation and Removal; Appointment of Successor.............................44
Section 6.11 Acceptance of Appointment by Successor........................................45
Section 6.12 Merger, Conversion, Consolidation or Succession to Business...................46
Section 6.13 Preferential Collection of Claims Against Company.............................47
Section 6.14 Appointment of Authenticating Agent...........................................47
ii
<PAGE>
ARTICLE VII.
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Company to Furnish Trustee Names and Addresses of Holders.....................48
Section 7.2 Preservation of Information, Communications to Holders........................48
Section 7.3 Reports by Trustee............................................................49
Section 7.4 Reports by Company............................................................49
ARTICLE VIII.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1 Company May Consolidate, Etc., Only on Certain Terms..........................49
Section 8.2 Successor Corporation Substituted.............................................50
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.1 Supplemental Indentures without Consent of Holders............................51
Section 9.2 Supplemental Indentures with Consent of Holders...............................52
Section 9.3 Execution of Supplemental Indentures..........................................53
Section 9.4 Effect of Supplemental Indentures.............................................53
Section 9.5 Conformity with Trust Indenture Act...........................................54
Section 9.6 Reference in Securities to Supplemental Indentures............................54
ARTICLE X.
COVENANTS
Section 10.1 Payment of Principal, Premium and Interest....................................54
Section 10.2 Maintenance of Office or Agency...............................................54
Section 10.3 Money for Security Payments to be Held in Trust...............................55
Section 10.4 Statement as to Compliance....................................................56
Section 10.5 Waiver of Certain Covenants...................................................56
Section 10.6 Additional Sums...............................................................56
Section 10.7 Additional Covenants..........................................................57
ARTICLE XI.
REDEMPTION OF SECURITIES
Section 11.1 Applicability of This Article.................................................58
Section 11.2 Election to Redeem; Notice to Trustee.........................................58
Section 11.3 Selection of Securities to be Redeemed........................................58
Section 11.4 Notice of Redemption..........................................................59
Section 11.5 Deposit of Redemption Price...................................................59
Section 11.6 Payment of Securities Called for Redemption...................................60
Section 11.7 Company's Right of Redemption.................................................60
iii
<PAGE>
ARTICLE XII.
SINKING FUNDS
Section 12.1 Applicability of Article......................................................61
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.........................61
Section 12.3 Redemption of Securities for Sinking Fund.....................................61
ARTICLE XIII.
SUBORDINATION OF SECURITIES
Section 13.1 Securities Subordinate to Senior Debt.........................................63
Section 13.2 Payment Over of Proceeds Upon Dissolution, Etc................................63
Section 13.3 Prior Payment to Senior Debt Upon Acceleration of Securities..................64
Section 13.4 No Payment When Senior Debt in Default........................................65
Section 13.5 Payment Permitted If No Default...............................................65
Section 13.6 Subrogation to Rights of Holders of Senior Debt...............................66
Section 13.7 Provisions Solely to Define Relative Rights...................................66
Section 13.8 Trustee to Effectuate Subordination...........................................66
Section 13.9 No Waiver of Subordination Provisions.........................................67
Section 13.10 Notice to Trustee.............................................................67
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating Agent................67
Section 13.12 Trustee Not Fiduciary for Holders of Senior Debt..............................67
Section 13.13 Rights of Trustee as Holder of Senior Debt; Preservation of Trustee's Rights..68
Section 13.14 Article Applicable to Paying Agents...........................................68
Section 13.15 Certain Conversions or Exchanges Deemed Payment...............................68
</TABLE>
iv
<PAGE>
LIBERTY FINANCIAL COMPANIES, INC.
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Indenture whether
or not physically contained therein) and the Junior Subordinated Indenture,
dated as of [ ].
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C>
310 (a) (1), (2) and (5)................................ 6.9
(a) (3)................................................. Not Applicable
(a) (4)................................................. Not Applicable
(b)..................................................... 6.8. 6.10
(c)..................................................... Not Applicable
311 (a)................................................. 6.13(a)
(b)..................................................... 6.13(b)
(b) (2)................................................. 7.3(a) (2)
7.3(a) (2)
312 (a)................................................. 7.1
7.2(a)
(b)..................................................... 7.2(b)
(c)..................................................... 7.2(c)
313 (a)................................................. 7.3(a)
(b). ................................................... 7.3(b)
(c)..................................................... 7.3(a),7.3(b)
(d)..................................................... 7.3(c)
314 (a) (1), (2) and (3)................................ 7.4
(a) (4)................................................. 10.5
(b)..................................................... Not Applicable
(c) (1)................................................. 1.2
(c) (2)................................................. 1.2
(c) (3)................................................. Not Applicable
(d)..................................................... Not Applicable
(e)..................................................... 1.2
(f)..................................................... Not Applicable
315 (a)................................................. 6.1(a)
(b)..................................................... 6.2
7.3(a) (6)
(c)..................................................... 6.1(b)
(d)..................................................... 6.1(c)
(d) (1)................................................. 6.1(a) (1)
(d) (2)................................................. 6.1(c) (2)
(d) (3)................................................. 6.1(c) (3)
(e)..................................................... 5.14
316 (a)................................................ 1.1
v
<PAGE>
(a) (1) (A)............................................. 5.12
(a) (1) (B)............................................. 5.13
(a) (2)................................................. Not Applicable
(b)..................................................... 5.8
(c)..................................................... 1.4(f)
317 (a) (1)............................................. 5.3
(a) (2)................................................. 5.4
(b)..................................................... 10.3
318 (a)................................................. 1.7
</TABLE>
- ----------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Junior Subordinated Indenture.
vi
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of [ ], between LIBERTY
FINANCIAL COMPANIES, INC., a Massachusetts corporation (hereinafter called the
"Company") having its principal office at 600 Atlantic Avenue, 24th Floor,
Boston, Massachusetts 0226-2214, and [ ], a Massachusetts banking corporation,
as Trustee (hereinafter 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 junior
subordinated debt securities in series (hereinafter called the "Securities") of
substantially the tenor hereinafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each a "Liberty
Trust," and, collectively, the "Liberty Trusts") of preferred trust interests in
such Trusts (the "Preferred Securities") and common interests in such 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.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions.
------------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time
<PAGE>
of such computation; provided, that when two or more principles are so generally
accepted, it shall mean that set of principles consistent with those in use by
the Company; and
(4) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"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 the sum of any additional taxes, duties and
other governmental charges to which a Liberty Trust has become subject from time
to time as a result of a Tax Event.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Company shall not be deemed to include any Liberty Trust to which Securities
have been issued. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 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 committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"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 issued to a Liberty Trust, the principal office of the Property Trustee
under the related Trust Agreement, is closed for business.
2
<PAGE>
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, 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, without par value, of the
Company.
"Company" means the Person named as the "Company" 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
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman, Chief
Executive Officer, President or a Vice President, and by the Treasurer, and
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.
"corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Current Value" has the meaning specified in Section 11.7.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or 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; and (vi) every
obligation of the type referred to in clauses (i) through (v) 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.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depository by the Company pursuant to
Section 3.1 with respect to such series (or any successor thereto).
3
<PAGE>
"Discount Security" means any security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" means the currency of the United States of America that, as at
the time of payment, is legal tender for the payment of public and private
debts.
"Event of Default" unless otherwise specified in the supplemental
indenture creating a series of Securities has the meaning specified in Article
Five.
"Extension Period" has the meaning specified in Section 3.11.
"Foreign Currency" means any currency issued by the government of one
or more countries other than the United States of America or by any recognized
confederation or association of such governments.
"Global Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depository
or its nominee for such series, and registered in the name of such Depository or
its nominee.
"Government Obligations" means, with respect to the Securities of any
series, securities which are (i) direct obligations of the United States of
America or (ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed by the United States of America and which,
in either case, are full faith and credit obligations of the United States of
America and are not callable or redeemable at the option of the issuer thereof
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Obligation or the specific payment
of interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Junior Subordinated Payment" has the meaning specified in Section
13.2.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
"Interest Payment Date" means as to each series of Securities the
Stated Maturity of an installment of interest on such Securities.
4
<PAGE>
"Interest Rate" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.
"Investment Company Event" means, in respect of a Liberty Trust, the
receipt by a Liberty Trust of an Opinion of Counsel, rendered by a law firm
experienced in such matters, to the effect that, as a result of the occurrence
of a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law") such Liberty Trust is or will
be considered an investment company that is required to be registered under the
1940 Act, which Change in 1940 Act Law becomes effective on or after the date of
original issuance of the Preferred Securities of such Liberty Trust.
"Lien" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Liberty Guarantee" means the guarantee by the Company of distributions
on the Preferred Securities of a Liberty Trust to the extent provided in the
Guarantee Agreement, substantially in the form attached hereto as Annex C, or
substantially in such form as may be specified as contemplated by Section 3.1
with respect to the Securities of any series, in each case as amended from time
to time.
"Liberty 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 becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Notice of Default" has the meaning specified in Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.
"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:
(1) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(2) Securities for whose payment money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent in trust for the
Holders of such Securities; and
5
<PAGE>
(3) Securities in substitution for or in lieu of which other Securities
have been authenticated and delivered or which have been paid pursuant to
Section 3.6, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Holders in whose hands such Securities are valid, binding
and legal obligations of the Company;
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 Company or any other obligor upon the Securities or any Affiliate of the
Company 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 which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor. Upon the written request of the
Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the Company
to be owned or held by or for the account of the Company, or any other obligor
on the Securities or any Affiliate of the Company 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.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Sections 3.1 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any security
authenticated and delivered under Section 3.6 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Securities" has the meaning specified in the first recital
of this Indenture.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any Liberty Trust, the
commercial bank or trust company identified as the "Property Trustee" in the
related Trust Agreement, solely in its capacity as Property Trustee of such
Liberty 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.
6
<PAGE>
"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.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, the date which
is fifteen days next preceding such Interest Payment Date (whether or not a
Business Day).
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
"Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, 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 which is pari
passu with, or subordinated to, the Securities, provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Company which, when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Company, (b) any Debt
of the Company to any of its Subsidiaries, (c) Debt to any employee of the
Company, (d) any liability for taxes, (e) Debt or other monetary obligations to
trade creditors created or assumed by the Company or any of these Subsidiaries
in the ordinary course of business in connection with the obtaining of goods,
materials or services and (f) the Securities.
"Special Event" means a Tax Event or an Investment Company Event.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
pursuant to the terms of such Security as the date on which the principal of
such Security or such installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For purposes of this definition, "voting stock" means stock which
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
7
<PAGE>
"Tax Event" means the receipt by a Liberty Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities of such Liberty Trust, there is more than an
insubstantial risk that (i) the Liberty Trust is, or will be within 90 days of
the date of such Opinion of Counsel, subject to United States Federal income tax
with respect to income received or accrued on the corresponding series of
Securities, (ii) interest payable by the Company on the corresponding series of
Securities is not, or within 90 days of the date of such Opinion of Counsel,
will not be, deductible, in whole or in part, for United States Federal income
tax purposes or (iii) the Liberty Trust is, or will be within 90 days of the
date of such Opinion of Counsel, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Trust Agreement" means the Trust Agreement substantially in the form
attached hereto as Annex A, as amended by the form of Amended and Restated Trust
Agreement substantially in the form attached hereto as Annex B, or substantially
in such form as may be specified as contemplated by Section 3.1 with respect to
the Securities of any series, in each case as amended from time to time.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder and,
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"Trust Indenture Act" 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 Company, 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 Company to the Trustee to take
any action under any provision of this Indenture, the Company 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 and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitute a condition
8
<PAGE>
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 10.5) 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;
(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 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 Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
9
<PAGE>
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
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 6.1) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done 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.
(f) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to take any action under
this Indenture by vote or consent. Except as otherwise provided herein, such
record date shall be the later of 30 days prior to the first solicitation of
such consent or vote or the date of the most recent list of Securityholders
furnished to the Trustee pursuant to Section 7.1 prior to such solicitation. If
a record date is fixed, those persons who were Securityholders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given, whether or not such persons continue to be Holders after such
record date, provided, however, that unless such vote or consent is obtained
from the Holders (or their duly designated proxies) of the requisite principal
amount of Outstanding Securities prior to the date which is the 120th day after
such record date, any such vote or consent previously given shall automatically
and without further action by any Holder be cancelled and of no further effect.
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Section 1.5 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, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose (except as otherwise provided in Section 5.1 hereof) hereunder 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 or at any other address previously furnished in writing to the
Trustee by the Company.
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. 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
the duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
Section 1.8 Effect of Headings and Table of Contents.
-----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.9 Successors and Assigns.
-----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
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Section 1.10 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 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, any Paying Agent and
their successors and assigns, the holders of Senior Debt and the Holders of the
Securities, any benefit or any legal or equitable, 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.
Section 1.13 Non-Business Days.
------------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or the Securities) payment of interest or
principal need not be made on such date, but may be made on the next succeeding
Business Day (and no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be,
until such next succeeding Business Day except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day (in each case with the same force and effect as if made
on the Interest Payment Date or Redemption Date or at the Stated Maturity).
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
Company and delivered to the Trustee
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at or prior to the delivery of the Company Order contemplated by Section 3.3
with respect to the authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be substantially in
the form set forth in this Article.
The definitive Securities shall be 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.
-------------------------
[If the Security is a Global Security, insert This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee only
in the limited circumstances described in the Indenture and no transfer of this
Security (other than a transfer of this Security as a whole by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository) may be registered except in limited
circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to Liberty Financial
Companies, Inc. or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]
LIBERTY FINANCIAL COMPANIES, INC. (Title of Security) No. $
LIBERTY FINANCIAL COMPANIES, INC., a corporation organized and existing
under the laws of Massachusetts (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to , or registered assigns, the
principal sum of Dollars on , [; provided that the Company may (i) change the
maturity date upon the occurrence of an exchange of the Securities for the Trust
Securities subject to certain conditions set forth in Section 3.14 of the
Indenture, which changed maturity date shall in no case be earlier than , or
later than , and (ii) extend the maturity date subject to certain conditions
specified in Section 3.14 of the Indenture, which extended maturity date shall
in no case be later than , ]. The Company further promises to pay interest on
said principal sum from , or from the most recent interest payment date (each
such date, an "Interest Payment Date") on which interest has been paid or duly
provided for, [monthly] [quarterly] [semi-annually] [if applicable, insert
(subject to deferral as set forth herein)] in arrears on [insert applicable
Interest Payment Dates] of each year, commencing , , at the rate of __%
per
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annum, until the principal hereof shall have become due and payable, [if
applicable, insert plus Additional Interest, if any,] until the principal hereof
is paid or duly provided for or made available for payment [if applicable,
insert and on any overdue principal and (without duplication and to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the rate of % per annum, compounded [monthly]
[quarterly] [semi-annually] [annually]. The amount of interest payable for any
period shall be computed on the basis of twelve 30-day months and a 360-day
year. The amount of interest payable for any partial period shall be computed on
the basis of the number of days elapsed in a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this Security
is not a Business Day, then a payment of the interest payable on such date will
be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to remain closed or (iii) a day on which the Corporate Trust
Office of the Trustee [if applicable, insert , or the principal office of the
Property Trustee under the Trust Agreement hereinafter referred to for [Liberty
Capital ,]] is closed for business. The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities, as defined in the Indenture) is registered
at the close of business on the Regular Record Date for such interest
installment, which shall be the [[insert definition of Regular Record Dates].
Any such interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange 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 The Company shall have the right at any time
during the term of this Security, from time to time, to defer payment of
interest on such Security for up to consecutive [monthly] [quarterly]
[semi-annual] interest payment periods with respect to each deferral period
(each an "Extension Period"), during which Extension Periods the Company shall
have the right to make partial payments of interest on any Interest Payment
Date, and at the end of which the Company shall pay all interest then accrued
and unpaid (together with Additional Interest thereon to the extent permitted by
applicable law); provided that during any such Extension Period, the Company
will not, and will not permit any Subsidiary of the Company to, (i) declare or
pay any dividends or distributions or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's outstanding capital
stock or (ii) make any payment of principal of, interest or premium, if any, on
or repay, repurchase or redeem any debt security of the Company that ranks pari
passu with or junior in interest to this
14
<PAGE>
Security or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiaries of the Company if such
guarantee ranks pari passu or junior in interest to this Security (other than
(a) dividends or distributions in Common Stock of the Company, (b) redemptions
or purchases of any rights pursuant to the Company's Rights Plan, or any
successor to such Rights Plan, and the declaration of a dividend of such rights
or the issuance of Stock under such plans in the future, (c) payments under any
Liberty Guarantee (as defined in the Indenture), and (d) purchases of Common
Stock related to the issuance of Common Stock under any of the Company's benefit
plans for its directors, officers or employees. Prior to the termination of any
such Extension Period, the Company may further extend the interest payment
period, provided that no Extension Period shall exceed consecutive [months]
[quarters] [semi-annual periods] or extend beyond the Maturity of this Security.
Upon the termination of any such Extension Period and upon the payment of all
accrued and unpaid interest and any Additional Interest then due, the Company
may elect to begin a new Extension Period, subject to the above requirements. No
interest shall be due and payable during an Extension Period except at the end
thereof. The Company 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 Interest Payment Date [if applicable, insert or, with respect to
the Securities issued to a Liberty Trust, prior to the earlier of (i) the date
the Distributions on the Preferred Securities are payable or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or other applicable self-regulatory organization or to holders of such Preferred
Securities of the record date or the date such Distributions are payable, but in
any event not less than one Business Day prior to such record date].
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert ; provided, however, that at the option of
the Company 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].
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, 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.
15
<PAGE>
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:
Liberty Financial Companies, Inc.
By: _________________________________________
[Chairman and Chief Executive Officer,
President or Vice President]
Attest:
[Secretary or Assistant Secretary ]
Section 2.3 Form of Reverse of Security.
----------------------------
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of [ ] (herein called the
"Indenture"), between the Company and [ ], as Trustee (herein called the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, [limited in aggregate principal amount to $ ].
All terms used in this Security that are defined in the Indenture [if
applicable, insert and in the Trust Agreement, dated as of [ ], as amended (the
"Trust Agreement"), for [Liberty Capital ,] among Liberty Financial Companies,
Inc., as Depositor, and the Trustees named therein, 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 On or after , , the Company may at any time, at
its option, subject to the terms and conditions of Article Eleven of the
Indenture, redeem this Security in whole at any time or in part from time to
time, without premium or penalty, at a redemption price equal to 100% of the
principal amount thereof plus the accrued and unpaid interest [if applicable,
insert including Additional Interest, if any] to the date fixed for redemption.]
[If applicable, insert If a Special Event in respect of a Liberty Trust
shall occur and be continuing, the Company may, at its option, redeem this
Security within 90 days of the occurrence of such Special Event, in whole but
not in part, subject to the provisions of Section 11.7 and the other provisions
of Article Eleven of the Indenture, at a redemption price equal to
16
<PAGE>
100% of the principal amount thereof plus accrued and unpaid interest, including
Additional Interest, if any, to the date fixed for redemption.]
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 the Security is not a Discount Security, If an Event of Default
with respect to Securities of this series shall occur and be continuing, the
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions provided in the Indenture.]
[If the Security is a Discount Security, If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions 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 and overdue 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 interest, if any,
on this Security shall terminate.]
The Indenture contains provisions for satisfaction, discharge and
defeasance at any time of the entire indebtedness of this Security upon
compliance by the Company with certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company 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 Company 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 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.
[If the Security is not a Discount Security, As provided in and subject
to the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series may declare the
principal amount of all the Securities of this series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), provided that, in the case of the Securities of this series issued
to a Liberty Trust, if upon an Event of Default, the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Securities of this
17
<PAGE>
series fails to declare the principal of all the Securities of this series to be
immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the corresponding series of Preferred Securities then
outstanding shall have such right by a notice in writing to the Company and the
Trustee; and upon any such declaration such specified amount of and the accrued
interest (including any Additional Interest) on all the Securities of this
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extend provided that the payment of principal
and interest (including any Additional Interest) on such Securities shall remain
subordinated to the extent provided in Article 13 of the Indenture.]
[If the Security is a Discount Security, As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than such portion
of the principal amount as may be specified in the terms of this series of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
in the case of the Securities of this series issued to a Liberty Trust, if upon
an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series fails to declare
the principal of all the Securities of this series to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of the
corresponding series of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such specified amount of and the accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
(including any Additional Interest) on such Securities shall remain subordinated
to the extent provided in Article Thirteen 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 Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. 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.
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
18
<PAGE>
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
The Securities of this series are issuable only in registered form
without coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
Section 2.4 Additional Provisions Required in Global Security.
--------------------------------------------------
Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 2.2 and 2.3, bear a legend in substantially the
following form:
"This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Security is exchangeable for Securities registered
in the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Indenture and may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary."
Section 2.5 Form of Trustee's Certificate of Authentication.
------------------------------------------------
This is one of the Securities referred to in the within mentioned
Indenture.
as Trustee By: Authorized officer
ARTICLE III.
THE SECURITIES
Section 3.1 Title and Terms.
----------------
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued 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 a series:
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<PAGE>
(a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6); provided, however, that
the authorized aggregate principal amount of such series may be increased above
such amount by a Board Resolution to such effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination thereof;
(d) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which Additional
Interest, if any, shall be payable in respect of any Securities of such series,
the Interest Payment Dates on which such interest shall be payable, the right,
pursuant to Section 3.11 or as otherwise set forth therein, of the Company to
defer or extend an Interest Payment Date, and the Regular Record Date for the
interest payable on any Interest Payment Date or the method by which any of the
foregoing shall be determined;
(e) the place or places where the principal of (and premium, if any)
and interest on the Securities of such series shall be payable, the place or
places where the Securities of such series may be presented for registration of
transfer or exchange, and the place or places where notices and demands to or
upon the Company in respect of the Securities of such series may be made;
(f) 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, at the option of
the Company;
(g) the obligation or the right, if any, of the Company 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;
(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiple thereof;
(i) if other than Dollars, the currency or currencies (including
currency unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Securities of the series shall be payable, or in which
the Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
20
<PAGE>
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate the
issuance of the Securities of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the manner
in which such amounts will be determined;
(n) the issuance of a temporary Global Security representing all of the
Securities of such series and exchange of such temporary Global Security for
definitive Securities of such series;
(o) whether the Securities of the series shall be issued in whole or in
part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Securities Exchange Act of 1934, as amended;
(p) the appointment of any Paying Agent or Agents for the Securities of
such series;
(q) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the additions
or changes, if any, to this Indenture with respect to the Securities of such
series to permit or facilitate such conversion or exchange;
(r) the form or forms of the Trust Agreement, Amended and Restated
Trust Agreement and Guarantee Agreement, if different from the forms attached
hereto as Annexes A, B and C, respectively;
(s) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in right of
payment, whether such other series of Securities are Outstanding or not; and
(t) any other terms of the Securities of such series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto.
If any of the terms of the 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
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an Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Officers' Certificate setting forth the terms of the
series.
Section 3.2 Denominations.
--------------
The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations of $25 and any integral multiple
thereof, unless otherwise specified as contemplated by Section 3.1.
Section 3.3 Execution, Authentication, Delivery and Dating.
-----------------------------------------------
The Securities shall be executed on behalf of the Company by its
President or one of its Vice Presidents under its corporate seal reproduced or
impressed thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of 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 executed by the Company to the Trustee for authentication. Securities
may be authenticated on original issuance from time to time and delivered
pursuant to such procedures acceptable to the Trustee ("Procedures") as may be
specified from time to time by Company Order. Procedures may authorize
authentication and delivery pursuant to oral instructions of the Company or a
duly authorized agent, which instructions shall be promptly confirmed in
writing.
Prior to the delivery of a Security in any such form to the Trustee for
authentication, the Company shall deliver to the Trustee the following:
(a) A Company Order requesting the Trustee's authentication and
delivery of all or a portion of the Securities of such series, and if less than
all, setting forth procedures for such authentication;
(b) The Board Resolution by or pursuant to which such form of Security
has been approved, and the Board Resolution, if any, by or pursuant to which the
terms of the Securities of such series have been approved, and, if pursuant to a
Board Resolution, an Officers' Certificate describing the action taken;
(c) An Officers' Certificate dated the date such certificate is
delivered to the Trustee, stating that all conditions precedent provided for in
this Indenture relating to the authentication and delivery of Securities in such
form and with such terms have been complied with; and
(d) An Opinion of Counsel stating that (i) the form of such Securities
has been duly authorized and approved in conformity with the provisions of this
Indenture; (ii) the terms of such Securities have been duly authorized and
determined in conformity with the provisions of this Indenture, or, if such
terms are to be determined pursuant to Procedures, as defined above,
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<PAGE>
when so determined such terms shall have been duly authorized and determined in
conformity with the provisions of this Indenture; and (iii) Securities in such
form when completed by appropriate insertions and executed and delivered by the
Company to the Trustee for authentication in accordance with this Indenture,
authenticated and delivered by the Trustee in accordance with this Indenture
within the authorization as to aggregate principal amount established from time
to time by the Board of Directors and sold in the manner specified in such
Opinion of Counsel, will be the legal, valid and binding obligations of the
Company entitled to the benefits of this Indenture, subject to applicable
bankruptcy, reorganization, insolvency and similar laws generally affecting
creditors' rights, to general equitable principles and except as enforcement
thereof may be limited by (A) requirements that a claim with respect to any
Securities denominated other than in Dollars (or a Foreign Currency or currency
unit judgment in respect of such claim) be converted into Dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or (B)
governmental authority to limit, delay or prohibit the making of payments in
Foreign Currencies or currency units or payments outside the United States, and
subject to such other qualifications as such counsel shall conclude do not
materially affect the rights of Holders of such Securities;
provided, however, that the Trustee shall be entitled to receive the documents
referred to in Clauses (b), (c) and (d) above only at or prior to the first
request of the Company to the Trustee to authenticate Securities of such series.
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.
Section 3.4 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 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 Company 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 Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of the same series of authorized denominations having the
same Original Issue Date and Stated Maturity and having the same
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terms as such temporary Securities. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
Section 3.5 Registration, Transfer and Exchange.
------------------------------------
The Company 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 Company shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated for that purpose 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, of a like aggregate principal amount, of
the same Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated Maturity
and having the same terms, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any securities are so surrendered for exchange,
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 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 transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but 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 transfer or exchange of Securities.
Notwithstanding any of the foregoing, any Global Security of a series
shall be exchangeable pursuant to this Section 3.5 for Securities registered in
the names of Persons other than the Depositary for such Security or its nominee
only if (i) such Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Security or if at any time such
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company executes and delivers to the
Trustee a Company Order that such Global Security shall be so exchangeable or
(iii) there shall have occurred and be continuing an Event of Default with
respect to the Securities of such series. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as such Depositary shall direct.
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Notwithstanding any other provision in this Indenture, a Global
Security may not be transferred except as a whole by the Depositary with respect
to such Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article Eleven and
ending at the close of business on the day of mailing of notice of redemption or
(b) to transfer or exchange any Security so selected for redemption in whole or
in part, except, in the case of any Security to be redeemed in part, any portion
thereof not to be redeemed.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities.
-------------------------------------------------
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Company 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 issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated
Security, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company 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 Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
issuing Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same issue and series of like tenor and
principal amount, having the same Original Issue Date and Stated Maturity and
bearing the same Interest Rate as such destroyed, lost or stolen Security, and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, 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 issued pursuant to this Section in lieu of any
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 duly issued hereunder.
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The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 3.7 Payment of Interest; Interest Rights Preserved.
-----------------------------------------------
Interest on any Security of any series which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date, shall be
paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest in respect of Securities of such series, except that, unless
otherwise provided in the Securities of such series, interest payable on the
Stated Maturity of a Security shall be paid to the Person to whom principal is
paid. The initial payment of interest on any Security of any series which is
issued between a Regular Record Date and the related Interest Payment Date shall
be payable as provided in such Security or in the Board Resolution pursuant to
Section 3.1 with respect to the related series of Securities.
Any interest on any Security which is payable, but is not timely paid
or duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company 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 Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first class, postage prepaid, to each Holder of a
Security of such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper, customarily
published in the English language on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, but such
publication shall not be a condition precedent to the establishment of such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor
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<PAGE>
Securities) are registered 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 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
Company to the Trustee of the proposed payment pursuant to this Clause, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 3.8 Persons Deemed Owners.
----------------------
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 3.7) 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.
Section 3.9 Cancellation.
-------------
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
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 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 destroyed by the Trustee and the Trustee shall deliver to
the Company a certificate of such destruction.
Section 3.10 Computation of Interest.
------------------------
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
period shall be computed on the basis of a 360-day year of twelve 30-day months
and interest on the Securities of each series for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of twelve
30-day months.
Section 3.11 Deferrals of Interest Payment Dates.
------------------------------------
If specified as contemplated by Section 3.1 with respect to the
Securities of a particular series, the Company shall have the right, at any time
during the term of such series, from time to
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<PAGE>
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 Company shall have the right to make
partial payments of interest on any Interest Payment Date. No Extension Period
shall end on a date other than an Interest Payment Date. At the end of any such
Extension Period the Company 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 during any such Extension Period, the
Company shall not, and shall cause any Subsidiary not to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock, or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Securities of such series or make any
guarantee payments with respect to any Guarantee by the Company of the debt
securities of any Subsidiary of the Company that by their terms rank pari passu
or junior in interest to the securities of such series (other than (a) dividends
or distributions in common stock of the Company (b) redemptions or purchases of
any rights pursuant to the Company's Rights Plan, or any successor to such
Rights Plan, and the declaration of a dividend of such rights or the issuance of
stock under such plans in the future, (c) payments under any Liberty Guarantee),
and (d) purchases of Common Stock related to the issuance of Common Stock under
any of the Company's benefit plans for its directors, officers or employees.
Prior to the termination of any such Extension Period, the Company may further
extend the interest payment period, provided that no Extension Period shall
exceed the period or periods specified in such Securities or extend beyond the
Maturity of such Securities. Upon termination of any Extension Period and upon
the payment of all accrued and unpaid interest and any Additional Interest then
due on any Interest Payment Date, the Company may elect to begin a new Extension
Period, subject to the above requirements. No interest shall be due and payable
during an Extension Period, except at the end thereof. The Company shall give
the Holders of the Securities of such series and the Trustee notice of its
election to begin any such Extension Period at least one Business Day prior to
the Interest Payment Date or, with respect to the Securities of a series issued
to a Liberty Trust, prior to the earlier of (i) the date the Distributions on
the Preferred Securities of such Liberty Trust are payable or (ii) the date the
Administrative Trustees of such Liberty Trust are required to give notice to any
securities exchange or other applicable self-regulatory organization or to
holders of such Preferred Securities of the record date or the date such
Distributions are payable, but in any event not less than one Business Day prior
to such record date.
The Trustee shall promptly give notice of the Company's election to
begin any such Extension Period to the Holders of the outstanding Securities of
such series.
Section 3.12 Right of Set-Off.
-----------------
With respect to the Securities of a series issued to a Liberty Trust,
notwithstanding anything to the contrary in the Indenture, the Company shall
have the right to set-off any payment it is otherwise required to make
thereunder in respect of any such Security to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Liberty Guarantee relating to such Security or under Section
5.8 of the Indenture.
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Section 3.13 Agreed Tax Treatment.
---------------------
Each Security issued hereunder shall provide that the Company and, by
its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that such
Security constitute indebtedness.
Section 3.14 Extension of Stated Maturity; Adjustment of Stated
Maturity Upon an Exchange.
--------------------------------------------------
If specified as contemplated by Section 3.1 with respect to the
Securities of a particular series, the Company shall have the right to (a)
change the Maturity Date of the Securities of such series upon the liquidation
of a Liberty Trust and the exchange of such Securities for the Preferred
Securities of such Liberty Trust and (b) extend the Stated Maturity for the
Securities of such series; provided, that at time any election to extend the
Maturity Date is made and at the time of such extension, (i) the Company is not
in bankruptcy, otherwise insolvent or in liquidation, (ii) the Company is not in
default in the payment of any interest or principal on the Securities of such
series and no deferred interest payments thereon have accrued, (iii) the
applicable Liberty Trust is not in arrears on payments of Distributions on its
Preferred Securities and no deferred Distributions thereon are accumulated, (iv)
the Securities are rated not less than BBB- by Standard & Poor's Ratings
Services or Baa3 by Moody's Investors Service, Inc. or the equivalent by any
other naturally recognized statistical rating organization and (v) the extended
Stated Maturity in no later than the 49th anniversary of the initial issuance of
the Preferred Securities of the applicable Liberty Trust; provided, further,
that, if the Company exercises its right to liquidate the Liberty Trust and
exchange the Securities of such series for the Preferred Securities of such
Liberty Trust as specified in clause (a) above, any changed Stated Maturity of
the Securities of such series shall be no earlier than the date that is five
years after the issuance of the Preferred Securities and no later than the date
30 years (plus an extended term of up to an additional 19 years if the
above-referenced conditions are satisfied) after the date of the initial
issuance of the Preferred Securities of the applicable Liberty Trust.
Section 3.15 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 a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
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ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture.
----------------------------------------
This Indenture shall cease to be of further effect (except as to (i)
any surviving rights of transfer, substitution and exchange of Securities, (ii)
rights hereunder of Holders to receive payments of principal of (and premium, if
any) and interest on the Securities and other rights, duties and obligations of
the Holders as beneficiaries hereof with respect to the amounts, if any,
deposited with the Trustee pursuant to this Article IV and (iii) the rights and
obligations of the Trustee hereunder), and the Trustee, on demand of and at the
expense of the Company, 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 which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.6 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company 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,
and the Company, in the case of Clause (B) (i) or (B) (ii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in the currency or currencies in which
the Securities of such series are payable sufficient to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any) and interest (including any Additional Interest) to the date of
such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity;
(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 6.7 and, if money shall
have been deposited with the
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Trustee pursuant to subclause (B) of 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 or money or Government
Obligations deposited with the Trustee pursuant to Section 4.3, or received by
the Trustee in respect of Government Obligations deposited with the Trustee
pursuant to Section 4.3, 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 Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for the
payment of which such money or obligations have been deposited with or received
by the Trustee; provided, however, such moneys need not be segregated from other
funds except to the extent required by law.
Section 4.3 Satisfaction, Discharge and Defeasance of Securities of Any
Series.
-----------------------------------------------------------
Unless otherwise provided in the Board Resolution adopted pursuant to
Section 3.1 establishing the terms of the Securities of any series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
Outstanding Securities of any such series and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of such indebtedness, when
(1) with respect to all Outstanding Securities of such series,
(A) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in trust for
such purpose an amount sufficient to pay and discharge the entire
indebtedness on all Outstanding Securities of such series for
principal (and premium, if any) and interest (including any Additional
Interest) to the Stated Maturity or any Redemption Date as
contemplated by the penultimate paragraph of this Section 4.3, as the
case may be; or
(B) the Company has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as obligations in trust for
such purpose an amount of Government Obligations as will, in the
written opinion of independent public accountants delivered to the
Trustee, together with predetermined and certain income to accrue
thereon, without consideration of any reinvestment thereof, be
sufficient to pay and discharge when due the entire indebtedness on
all Outstanding Securities of such series for principal (and premium,
if any) and interest (including any Additional Interest) to the Stated
Maturity or any Redemption Date as contemplated by the penultimate
paragraph of this Section 4.3, as the case may be; and
(2) the Company has paid or caused to be paid all other sums payable
with respect to the Outstanding Securities of such series; 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
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satisfaction and discharge of the entire indebtedness on all Outstanding
Securities of any such series have been complied with.
Any deposits with the Trustee referred to in Section 4.3(i) above shall
be irrevocable and shall be made under the terms of an escrow trust agreement in
form and substance reasonably satisfactory to the Trustee. If any Outstanding
Securities of such series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with any
mandatory sinking fund requirement, the applicable escrow trust agreement shall
provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company. If the Securities of
such series are not to become due and payable at their Stated Maturity or upon
call for redemption within one year of the date of deposit, then the Company
shall give, not later than the date of such deposit, notice of such deposit to
the Holders of Securities of such series.
Upon the satisfaction of the conditions set forth in this Section 4.3
with respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided, that the Company shall not be discharged
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law.
ARTICLE V.
REMEDIES
Section 5.1 Events of Default.
------------------
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an Extension Period); or
(2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or
(3) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Company in this Indenture (other than a covenant
or warranty a default in the performance of which or the breach of which is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
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Company and the Trustee by the Holders of at least 25% in principal amount of
the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied; or
(4) the entry of a decree or order by a court having jurisdiction in
the premises 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 bankruptcy, insolvency, reorganization or other similar law, or appointing
a 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 unstayed and in effect for a period of 60 consecutive days; or
(5) the institution by the Company 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 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 for 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 the Company in furtherance of any such action; or
(6) any other Event of Default 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 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided that,
in the case of the Securities of a series issued to a Liberty Trust, if, upon an
Event of Default, the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series fail to declare the
principal of all the Securities of that series to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of the
corresponding series of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Interest) on all the Securities of such
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article Thirteen.
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
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obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the Outstanding Securities of that series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(A) all overdue installments of interest (including any
Additional 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 interest thereon at the rate borne by the
Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series which
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.13.
The holders of a majority in aggregate outstanding principal amount of
the Securities of a series affected thereby may, on behalf of the holders of all
the Securities of such series, waive any past default, except a default in the
payment of principal or interest (unless such 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 Trustee) or a default
in respect of a covenant or provision which under this Indenture cannot be
modified or amended without the consent of the holder of each outstanding
Security of such series and, in the case of Securities of a series issued to a
Liberty Trust, should the holders of such Securities fail to annul such
declaration and waive such default, the holders of a majority in aggregate
liquidation preference of the related series of Preferred Securities shall have
such right.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the 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, that, unless such declaration of acceleration,
or rescission and annulment, as the case may be, shall have become effective by
virtue of the requisite percentage having joined in such notice prior to the day
which is 90 days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case 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
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of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.2.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
-------------------------------------------------------
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional 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 (and premium, if
any, on) any Security at the Maturity thereof,
the Company 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, including any sinking fund payment or
analogous obligations (and premium, if any) and interest (including any
Additional Interest); and, in addition thereto, all amounts owing the Trustee
under Section 6.7.
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, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon 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 the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal (and
premium, if any) or interest (including any Additional Interest)) shall be
entitled and empowered, by intervention in such proceeding or otherwise,
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(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest (including any Additional Interest)
owing and unpaid in respect to the Securities and to file such other
papers or documents as may be necessary or advisable and to take any
and all actions as are authorized under the Trust Indenture Act in
order to have the claims of the Holders and any predecessor to the
Trustee under Section 6.7 and of the Holders allowed in any such
judicial proceedings; and
(ii) and 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 in
accordance with Section 5.6; and
(b) 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 for
distribution in accordance with Section 5.6, 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 to it and any predecessor Trustee under Section 6.7.
Nothing herein contained 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 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, 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 premium,
if any) or interest (including any Additional Interest), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
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SECOND: To the payment of the amounts then due and unpaid upon such
series of Securities for principal (and premium, if any) 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 premium, if any) and interest (including any Additional
Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
Section 5.7 Limitation on Suits.
--------------------
No Holder of any Securities of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture
or for the appointment of a receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing 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.
----------------------------------------------------
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 premium, if any) and (subject to Section 3.7)
interest (including any Additional Interest) on such Security on the respective
Stated Maturities expressed in such Security 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 a
Liberty Trust, any holder of the
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corresponding series of Preferred Securities shall have the right, upon the
occurrence of an Event of Default described in Section 5.1(1) or 5.2(1) hereof,
to institute a suit directly against the Company for enforcement of payment to
such Holder of principal of (premium, if any) and (subject to Section 3.7)
interest (including any Additional Interest) on the Securities having a
principal amount equal to the aggregate liquidation preference of the Preferred
Securities of the corresponding series held by such Holder.
Section 5.9 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 the Company, the
Trustee and the Holders 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 and the Holders 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 3.6, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or 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.
-----------------------------
Except as otherwise provided in the last paragraph of Section 3.6, no
delay or omission of the Trustee or of any Holder of any 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 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 5.12 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 for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
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(2) the Trustee may take any other action deemed proper by the Trustee
which 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 the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, 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.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
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, that, unless the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice 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 notice identical to a
notice which has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 5.12.
Section 5.13 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 and its consequences
with respect to such series except a default:
(1) in the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 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 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,
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having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security on or after the
respective Stated Maturities expressed in such Security.
Section 5.15 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 VI.
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities.
------------------------------------
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
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(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture with respect
to the Securities of such series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) 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.
-------------------
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default hereunder known to the Trustee, 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 premium, if any) or
interest (including any Additional Interest) on any Security of such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Securities of
such series; and provided, further, that, in the case of any default of the
character specified in Section 5.1(3), no such notice to Holders of Securities
of such series 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 rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, Security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
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(b) 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 may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(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 reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
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 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.
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 Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of the Securities or the proceeds thereof.
Section 6.5 May Hold Securities.
--------------------
The Trustee, any Paying Agent, Securities 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 6.8 and 6.13, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Securities Registrar or such other agent.
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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 Company.
Section 6.7 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 in such amounts as the Company 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);
(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 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. This indemnification shall survive the termination of this
Agreement.
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee. Such lien
shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Reform Act of 1978 or a successor statute.
Section 6.8 Disqualification; Conflicting Interests.
----------------------------------------
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 Section 301(b) of the Trust
Indenture Act.
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Section 6.9 Corporate Trustee Required; Eligibility.
----------------------------------------
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States of America or of any State, Territory or the District of Columbia,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority, or
(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.
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 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 Company. 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 principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 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
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(2) the Trustee shall cease to be eligible under Section 6.9 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, (i) the Company, acting pursuant to the authority of a
Board Resolution, may remove the Trustee, 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 himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.
(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 Company, 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 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, become
the successor Trustee with respect to the Securities of such series and
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
hereinafter provided, any Holder who has been a bona fide Holder of a Security
for at least six months may, subject to Section 5.14, 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.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series 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 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
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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 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 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 Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any 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 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
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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 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 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 and upon exchange, registration of transfer or partial redemption thereof,
and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the United
States of America, or of any State, Territory or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to 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
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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 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 Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
As Trustee By: ; As Authenticating Agent By: : Authorized Officer
ARTICLE VII.
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1 Company to Furnish Trustee Names and Addresses of Holders.
----------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after January 15 and July 15,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such January 1 and July 1, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
excluding from any such list names and addresses received by the Trustee in its
capacity as 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 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 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) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than July 15 in each calendar
year, commencing with the first July 15 after the first issuance of Securities
under this Indenture.
(c) 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 the
Securities are listed and also with the Commission. The Company will notify the
Trustee whenever the Securities are listed on any stock exchange.
Section 7.4 Reports by Company.
-------------------
The Company 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 that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
shall be filed with the Trustee within 15 days after the same is required to be
filed with the Commission. Notwithstanding that the Company may not be required
to remain subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company shall continue to file with the
Commission and provide the Trustee with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Securities Exchange Act of 1934. The Company also shall comply with the other
provisions of Trust Indenture Act Section 314(a).
ARTICLE VIII.
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1 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 no Person
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shall 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 corporation 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
organized and existing under the laws of the United States of America or any
State or the District of Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of (and premium,
if any) and interest (including any Additional Interest) on all the Securities
and the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of the Securities of a series issued to a Liberty
Trust, such consolidation, merger, conveyance, transfer or lease is permitted
under the related Trust Agreement and Liberty Guarantee and does not give rise
to any breach or violation of the related Trust Agreement or Liberty Guarantee;
and
(4) 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 any such supplemental indenture complies with
this Article and that all conditions precedent herein provided for relating to
such transaction have been complied with; and the Trustee, subject to Section
6.1, may rely upon such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section 8.1.
Section 8.2 Successor Corporation Substituted.
----------------------------------
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company 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
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; and in the event of any such
conveyance, transfer or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
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in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall cause
to be signed and delivered to the Trustee on its behalf for the purpose pursuant
to such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.1 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 contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon the
Company; 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 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
(5) to add any additional Events of Default; or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(7) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions
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with respect to matters or questions arising under this Indenture, provided that
such action pursuant to this clause (7) shall not materially adversely affect
the interest of the Holders of Securities of any series or, in the case of the
Securities of a series issued to a Liberty Trust and for so long as any of the
corresponding series of Preferred Securities shall remain outstanding, the
holders of such Preferred Securities; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11(b); or
(9) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
Section 9.2 Supplemental Indentures with Consent of Holders.
------------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to 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) except to the extent permitted by Section 3.11 or as otherwise
specified as contemplated by Section 3.1 with respect to the extension of the
interest payment period of the Securities of any series, change the Stated
Maturity of the principal of, or any installment of interest (including any
Additional Interest) on, any Security, or reduce the principal amount thereof or
the rate of interest thereon or reduce any premium payable upon the redemption
thereof, or reduce the amount of principal of a Discount Security that would be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2, or change the place of payment where, or the coin or
currency in which, any Security or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the date
fixed for redemption thereof), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.5, except to increase any such percentage or to provide that certain
other provisions of this
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Indenture cannot be modified or waived without the consent of the Holder of each
Security affected thereby; or
(4) modify the provisions in Article Thirteen of this Indenture with
respect to the subordination of Outstanding Securities of any series in a manner
adverse to the Holders thereof;
provided that, in the case of the Securities of a series issued to a Liberty
Trust, so long as any of the corresponding series of Preferred Securities
remains outstanding, no such amendment shall be made that adversely affects the
holders of such Preferred Securities, 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 preference of such
Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Securities of such series and all accrued and, subject
to Section 3.7, unpaid interest (including any Additional Interest) thereon have
been paid in full; and provided further that in the case of the Securities of a
series issued to a Liberty Trust, so long as any of the corresponding series of
Preferred Securities remain outstanding, no amendment shall be made to Section
5.8 of this Indenture without the prior consent of the holders of each Preferred
Security then outstanding unless and until the principal (and premium, if any)
of the Securities of such series and all accrued and (subject to Section 3.7)
unpaid interest (including any Additional Interest) thereon have been paid in
full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities, or 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 9.3 Execution of Supplemental Indentures.
-------------------------------------
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent have been complied with. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 9.4 Effect of Supplemental Indentures.
----------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this
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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.
---------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company 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
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 X.
COVENANTS
Section 10.1 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 premium,
if any) and 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 Company will maintain in each Place of Payment for any series, an
office or agency where Securities of that series may be presented or surrendered
for payment and an office or agency where Securities may be surrendered for
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company
initially appoints the Trustee, acting through its Corporate Trust Office, as
its agent for said purposes. The Company 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 Company 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 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 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 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
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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 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 (and premium, if any) 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 premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
failure so to act.
Whenever the Company 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
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal and
premium (if any) or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent 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) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest;
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable to
it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by the Company or any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or
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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 Company Request to the Company, or (if then held by the Company)
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 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 10.4 Statement as to Compliance.
---------------------------
The Company shall deliver to the Trustee, within 120 days after the end
of each calendar year of the Company 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 Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company 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.
----------------------------
The Company may omit in any particular instance to comply with any
covenant or condition as specified as contemplated by Section 3.1 with respect
to the Securities of any series, if before or after the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company 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 issued to a Liberty Trust,
except as otherwise specified as contemplated by Section 3.1, in the event that
(i) a Liberty Trust is the Holder of all of the Outstanding Securities of such
series, (ii) a Tax Event in respect of such Liberty Trust shall have occurred
and be continuing and (iii) the Company shall not have (i) redeemed the
Securities of such series pursuant to Section 11.7(b) or (ii) terminated such
Liberty Trust pursuant to Section 9.2(b) of the related Trust Agreement, the
Company shall pay to such Liberty Trust (and its permitted successors or assigns
under the related Trust Agreement) for so long as such Liberty Trust (or its
permitted successor or assignee) is the registered holder of any
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Securities of such series, such additional amounts as may be necessary in order
that the amount of distributions (including any Additional Amounts (as defined
in the Trust Agreement)) then due and payable by such Liberty 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 (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 extension of an interest payment period pursuant to Section 3.11 or the
Securities shall not extend the payment of any Additional Sums that may be due
and payable during such interest payment period.
Section 10.7 Additional Covenants.
---------------------
The Company covenants and agrees with each Holder of Securities of a
series issued to a Liberty Trust that it will not, and it will not permit any
Subsidiary of the Company to, (a) declare or pay any dividends or distributions
on, or redeem purchase, acquire or make a liquidation payment with respect to,
any shares of the Company's capital stock, or (b) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu with or junior to the Securities
of such series or make any guarantee payments with respect to any guarantee by
the Company of debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Securities (other
than (a) dividends or distributions in Common Stock of the Company, (b)
redemptions or purchases of any rights pursuant to the Company's Rights Plan, or
any successor to such Rights Plan, and the declaration of a dividend of such
rights or the issuance of stock under such plans in the future, (c) payments
under any Liberty Guarantee, and (d) purchases of Common Stock related to the
issuance of Common Stock under any of the Company's benefit plans for its
directors, officers or employees) if at such time (i) there shall have occurred
any event of which the Company has actual knowledge that (a) with the giving of
notice or the lapse of time or both, would constitute an Event of Default
hereunder and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) the Company shall be in default with respect to
its payment of any obligations under the related Liberty Guarantee or (iii) the
Company shall have given notice of its election to begin an Extension Period as
provided herein and shall not have rescinded such notice, or such period, or any
extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to a Liberty Trust (i) to maintain directly or indirectly 100% ownership
of the Common Securities of such Liberty Trust; provided, however, that any
permitted successor of the Company hereunder may succeed to the Company's
ownership of such Common Securities, (ii) not to voluntarily terminate, wind-up
or liquidate such Liberty Trust, except (a) in connection with a distribution of
the Securities of such series to the holders of Preferred Securities in
liquidation of such Liberty 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
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provisions of such Trust Agreement, to cause such Liberty Trust to remain
classified as a grantor trust and not an association taxable as a corporation
for United States federal income tax purposes.
ARTICLE XI.
REDEMPTION OF SECURITIES
Section 11.1 Applicability of This Article.
------------------------------
Redemption of Securities (whether by operation of a sinking fund or
otherwise) as permitted or required by any form of Security issued pursuant to
this Indenture shall be made in accordance with such form of Security and this
Article; provided, however, that if any provision of any such form of Security
shall conflict with any provision of this Article, the provision of such form of
Security shall govern. Except as otherwise set forth in the form of Security for
such series, each Security shall be subject to partial redemption only in the
amount of $25 or, in the case of the Securities of a series issued to a Liberty
Trust, $25, or integral multiples thereof.
Section 11.2 Election to Redeem; Notice to Trustee.
--------------------------------------
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Company of less than all of the Securities of any particular series and
having the same terms, the Company shall, not less than 30 nor more than 60 days
prior to the date fixed for redemption (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such date and of the
principal amount of Securities of that series to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities, the Company shall furnish
the Trustee with an Officers' Certificate and an Opinion of Counsel evidencing
compliance with such restriction.
Section 11.3 Selection of Securities to be Redeemed.
---------------------------------------
If less than all the Securities of any series are to be redeemed
(unless all the Securities of 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 portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this
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Indenture, unless the context otherwise requires, all provisions relating to the
redemption of Securities shall relate, in the case of any Security redeemed or
to be redeemed only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed. If the Company shall so direct,
Securities registered in the name of the Company, any Affiliate or any
Subsidiary thereof shall not be included in the Securities selected for
redemption.
Section 11.4 Notice of Redemption.
---------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the date fixed for redemption, to each Holder of
Securities to be redeemed, at the address of such Holder as it appears in the
Securities Register.
With respect to Securities of each series to be redeemed, each notice
of redemption shall state:
(a) the date fixed for redemption for Securities of such series;
(b) the redemption price at which Securities of such series are to be
redeemed;
(c) if less than all Outstanding Securities of such particular series
and having the same terms are to be redeemed, the identification (and, in the
case of partial redemption, the respective principal amounts) of the particular
Securities to be redeemed;
(d) that on the date fixed for redemption, the redemption price at
which such Securities are to be redeemed will become due and payable upon each
such Security or portion thereof, and that interest thereon, if any, shall cease
to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the redemption price at which such Securities are to be redeemed; and
(f) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
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 not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
Section 11.5 Deposit of Redemption Price.
----------------------------
Prior to 10:00 a.m. New York City time on the redemption date specified
in the notice of redemption given as provided in Section 11.4, the Company will
deposit with the Trustee or with one or more paying agents an amount of money
sufficient to redeem on the redemption date all the Securities so called for
redemption at the applicable redemption price.
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Section 11.6 Payment of Securities Called for Redemption.
--------------------------------------------
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable redemption price. On presentation and
surrender of such Securities at a place of payment in said notice specified, the
said securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of the same
series, of authorized denominations, in aggregate principal amount equal to the
unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms. If a Global Security is so surrendered,
such new Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
Section 11.7 Company's Right of Redemption.
------------------------------
(a) Unless otherwise specified as contemplated by Section 3.1 with
respect to the Securities of a particular series and notwithstanding any
additional redemption rights that may be so specified, the Company may, at its
option, redeem the Securities of any series after their date of issuance in
whole at any time or in part from time to time, subject to the provisions of
this clause (a) and the other provisions of this Article XI. Unless otherwise
specified as contemplated by Section 3.1 with respect to the Securities of a
particular series, the redemption price for any Security so redeemed pursuant to
this clause (a) shall be equal to 100% of the principal amount of such
Securities plus any accrued and unpaid interest, including any Additional
Interest, to the date fixed for redemption. The Company shall not redeem the
Securities in part unless all accrued and unpaid interest (including any
Additional Interest) has been paid in full on all Securities Outstanding for all
interest periods terminating on or prior to the date fixed for redemption.
(b) In the case of the Securities of a series issued to a Liberty
Trust, except as otherwise specified as contemplated by Section 3.1, if a
Special Event in respect of such Liberty Trust shall occur and be continuing,
the Company may, at its option, redeem the Securities of such series within 90
days of the occurrence of such Special Event, in whole but not in part, subject
to the provisions of this clause (b) and the other provisions of this Article
Eleven. The redemption price for any Security so redeemed pursuant to this
clause (b) shall be equal to 100% of the principal amount of such Securities
then Outstanding plus accrued and unpaid interest, including any Additional
Interest, to the date fixed for redemption.
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ARTICLE XII.
SINKING FUNDS
Section 12.1 Applicability of Article.
-------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount which is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
Section 12.2 Satisfaction of Sinking Fund Payments with Securities.
------------------------------------------------------
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Securities of a series in cash, the Company may at its
option, at any time no more than 16 months and no less than 30 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured Coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, 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 Company Order instructing the
Trustee to credit such obligations and stating that the Securities of such
series were originally issued by the Company 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 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 Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Certificate shall be irrevocable
and upon its delivery the Company 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
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the case of the failure of the Company to deliver such Certificate (or, as
required by this Indenture, the Securities and coupons, if any, specified in
such Certificate), the sinking fund payment due on the succeeding sinking fund
payment date for such series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of the Securities of such series
subject to a mandatory sinking fund payment without the right to deliver or
credit securities as provided in Section 12.2 and without the right to make the
optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company 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 by the Company if the Company is acting as its own Paying Agent,
segregated and held in trust 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 Company 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 Company if the Company 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 Company 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 Company shall pay to the Trustee (or, if the Company is acting
as its own Paying Agent, the Company shall segregate and hold in trust as
provided in Section 10.3) in cash a sum in the currency in which Securities of
such series are payable (except as provided pursuant to Section 3.1) equal to
the principal and any interest accrued to the redemption date for Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 12.3.
Neither the Trustee nor the Company 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 Company if the
Company 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 Company) for that purpose in accordance with the terms of this
Article Twelve. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any
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such default or Event of Default shall occur and any moneys thereafter paid into
such sinking fund shall, during the continuance of such default or Event of
Default, be held as security for the payment of the Securities and coupons, if
any, of such series; provided, however, that in case such default or Event of
Default shall have been cured or waived herein, such moneys shall thereafter be
applied on the next sinking fund payment date for the Securities of such series
on which such moneys may be applied pursuant to the provisions of this Section
12.3.
ARTICLE XIII.
SUBORDINATION OF SECURITIES
Section 13.1 Securities Subordinate to Senior Debt.
--------------------------------------
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the Securities are hereby expressly made subordinate and subject
in right of payment to the prior payment in full of all amounts then due and
payable in respect of all Senior Debt.
Section 13.2 Payment Over of Proceeds Upon Dissolution, Etc.
-----------------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company (each such event, if any, herein
sometimes referred to as a "Proceeding"), then the holders of Senior Debt shall
be entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, before the Holders of the Securities are entitled to
receive or retain any payment or distribution of any kind or character, whether
in cash, property or securities (including any payment or distribution which may
be payable or deliverable by reason of the payment of any other Debt of the
Company (including any series of the Securities) subordinated to the payment of
the Securities, such payment or distribution being hereinafter referred to as a
"Junior Subordinated Payment"), on account of principal of (or premium, if any)
or interest (including any Additional Interest) on the Securities or on account
of the purchase or other acquisition of Securities by the Company or any
Subsidiary and to that end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof, any payment or distribution of
any kind or character, whether in cash, property or securities, including any
Junior Subordinated Payment, which may be payable or deliverable in respect of
the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment
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or distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Debt remaining unpaid, to the extent necessary to
pay all Senior Debt in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by sale such properties and assets as an entirety, as the case may be,
shall, as a part of such consolidation, merger, or sale comply with the
conditions set forth in Article Eight.
Section 13.3 Prior Payment to Senior Debt Upon Acceleration of
Securities.
-------------------------------------------------
In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Securities
are entitled to receive any payment or distribution of any kind or character,
whether in cash, properties or securities (including any Junior Subordinated
Payment) by the Company on account of the principal of (or premium, if any) or
interest (including any Additional Interest) on the Securities or on account of
the purchase or other acquisition of Securities by the Company or any
Subsidiary; provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with this Indenture or as
otherwise specified as contemplated by Section 3.1 for the Securities of any
series by delivering and crediting pursuant to Section 12.2 or as otherwise
specified as contemplated by Section 3.1 for the Securities of any series
Securities which have been acquired (upon redemption or otherwise) prior to such
declaration of acceleration.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
64
<PAGE>
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
Section 13.4 No Payment When Senior Debt in Default.
---------------------------------------
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior Debt, or
in the event that any event of default with respect to any Senior Debt shall
have occurred and be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or (b) in the event any
judicial proceeding shall be pending with respect to any such default in payment
or such event or default, then no payment or distribution of any kind or
character, whether in cash, properties or securities (including any Junior
Subordinated Payment) shall be made by the Company on account of principal of
(or premium, if any) or interest (including any Additional Interest), if any, on
the Securities or on account of the purchase or other acquisition of Securities
by the Company or any Subsidiary; provided, however, that nothing in this
Section shall prevent the satisfaction of any sinking fund payment in accordance
with this Indenture or as otherwise specified as contemplated by Section 3.1 for
the Securities of any series by delivering and crediting pursuant to Section
12.2 or as otherwise specified as contemplated by Section 3.1 for the Securities
of any series Securities which have been acquired (upon redemption or otherwise)
prior to such default in payment or event of default.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
Section 13.5 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 Company, at any time except during
the pendency of any Proceeding referred to in Section 13.2 or under the
conditions described in Sections 13.3 and 13.4, from making payments at any time
of principal of (and premium, if any) or interest on the Securities, or (b) the
application by the Trustee of any money or Government Obligations deposited with
it hereunder to the payment of or on account of the principal of (and premium,
if any) or interest (including any Additional Interest) on the Securities or the
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article.
65
<PAGE>
Section 13.6 Subrogation to Rights of Holders of Senior Debt.
------------------------------------------------
Subject to the payment in full of all Senior Debt, or the provision for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, the Holders of the Securities shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Debt pursuant to the provisions of this Article (equally and ratably with
the holders of all indebtedness of the Company which by its express terms is
subordinated to Senior Debt of the Company to substantially the same extent as
the Securities are subordinated to the Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. For purposes of such subrogation or
assignment, no payments or distributions to the holders of the Senior Debt 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 Debt by Holders of the Securities or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Debt, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.
Section 13.7 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 Debt 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 Company and the Holders of the Securities,
the obligations of the Company, which are absolute and unconditional, to pay to
the Holders of the Securities the principal of (and premium, if any) and
interest (including any Additional Interest) on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and
creditors of the Company other than their rights in relation to the holders of
Senior Debt; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture including, without limitation, filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article of the holders of
Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
Section 13.8 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.
66
<PAGE>
Section 13.9 No Waiver of Subordination Provisions.
--------------------------------------
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
Section 13.10 Notice to Trustee.
------------------
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor (whether or not the facts contained in such notice are true); provided,
however, that if the Trustee shall not have received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, without
limitation, the payment of the principal of (and premium, if any) or interest
(including any Additional Interest) on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received and shall not be affected by any notice to the contrary which
may be received by it within two Business Days prior to such date.
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating
Agent.
--------------------------------------------------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Article Six, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
Section 13.12 Trustee Not Fiduciary for Holders of Senior Debt.
-------------------------------------------------
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not
be liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
67
<PAGE>
Section 13.13 Rights of Trustee as Holder of Senior Debt; 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 Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
Section 13.14 Article Applicable to Paying Agents.
------------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.
Section 13.15 Certain Conversions or Exchanges Deemed Payment.
------------------------------------------------
For the purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities shall not be deemed
to constitute a payment or distribution on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on Securities
or on account of the purchase or other acquisition of Securities, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such security. For the
purposes of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company which are
subordinated in right of payment to all Senior Debt which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.
68
<PAGE>
* * * * 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.
LIBERTY FINANCIAL COMPANIES, INC.
By: _____________________________________
Attest:
[ ]
as Property Trustee
By: _____________________________________
69
GUARANTEE AGREEMENT
Between
LIBERTY FINANCIAL COMPANIES, INC.
(as Guarantor)
and
STATE STREET BANK AND TRUST COMPANY
(as Trustee)
dated as of
____________, 1998
Liberty Financial Capital Trust I
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
ARTICLE I.
DEFINITIONS
<S> <C> <C>
Section 1.1. Definitions.................................................................................1
ARTICLE II.
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application............................................................4
Section 2.2. List of Holders.............................................................................4
Section 2.3. Reports by the Guarantee Trustee............................................................5
Section 2.4. Periodic Reports to the Guarantee Trustee...................................................5
Section 2.5. Evidence of Compliance with Conditions Precedent............................................5
Section 2.6. Events of Default; Waiver...................................................................5
Section 2.7. Event of Default; Notice....................................................................6
Section 2.8. Conflicting Interests.......................................................................6
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee..................................................6
Section 3.2. Certain Rights of Guarantee Trustee.........................................................8
Section 3.3. Indemnity...................................................................................9
ARTICLE IV.
GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee: Eligibility..............................................................9
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee..............................10
ARTICLE V.
GUARANTEE
Section 5.1. Guarantee..................................................................................11
Section 5.2. Waiver of Notice and Demand................................................................11
Section 5.3. Obligations Not Affected...................................................................11
Section 5.4. Rights of Holders..........................................................................12
Section 5.5. Guarantee of Payment.......................................................................12
Section 5.6. Subrogation................................................................................12
Section 5.7. Independent Obligations....................................................................13
<PAGE>
ARTICLE VI.
COVENANTS AND SUBORDINATION
Section 6.1. Subordination..............................................................................13
Section 6.2. Pari Passu Guarantees......................................................................13
ARTICLE VII.
TERMINATION
Section 7.1. Termination................................................................................13
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Successors and Assigns.....................................................................14
Section 8.2. Amendments.................................................................................14
Section 8.3. Notices....................................................................................14
Section 8.4. Benefit....................................................................................15
Section 8.5. Interpretation.............................................................................15
Section 8.6. Governing Law..............................................................................16
</TABLE>
iii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of ______________, 1998, is executed
and delivered by LIBERTY FINANCIAL COMPANIES, INC., a Massachusetts corporation
(the "Guarantor"), having its principal office at 600 Atlantic Avenue, 24th
Floor, Boston, Massachusetts 02210-2214, and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, 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 Liberty Financial Capital Trust I, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of ______________, 1998 among the Issuer Trustees
named therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing up to $___________ aggregate liquidation preference of its ____% Trust
Originated Preferred Securities, Series A (liquidation preference $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 Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with State Street Bank and Trust Company, 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 for
the benefit of the Holders from time to time of the Preferred Securities.
1
<PAGE>
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined 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.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or 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; and (vi) every
obligation of the type referred to in clauses (i) through (v) 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.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer; (i) any accrued 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
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the 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 Debentures are distributed to the Holders, the
lesser of (a) the aggregate of the liquidation preference of $25 per Preferred
Security plus accrued and unpaid Distributions on the Preferred Securities to
the date of payment to the extent the Issuer shall have funds on hand available
to make such payment at such time and (b) the amount of assets of the
2
<PAGE>
Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means State Street Bank and Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any 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 Junior Subordinated Indenture dated as of
__________, 1998, as supplemented and amended between the Guarantor and State
Street Bank and Trust Company, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in liquidation preference of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the liquidation preference of all then
outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman and Chief Executive Officer, President or a
Vice President, and by the Treasurer, and Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
3
<PAGE>
"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
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department 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 that officer's knowledge of and familiarity with the
particular subject.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (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
Debt, whether incurred on or prior to the date of this Guarantee 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 Guarantee or to other Debt which is pari
passu with, or subordinated to, the Guarantee; provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Guarantor which when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Guarantor, (b) any
Debt of the Guarantor to any of its Subsidiaries, (c) Debt to any employee of
the Guarantor, (d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Guarantor or any of its
Subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services, (f) Debt issued under the Indenture and (g) the
Guarantee.
"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.
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.
4
<PAGE>
(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 (i) semiannually, on or before January 15 and July 15 of each
year, a list, in such form as the Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (ii) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of 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 July 15 of each year, commencing July 15, _____, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) 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.
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.
5
<PAGE>
Section 2.6. Events of Default; Waiver.
The Holders of a Majority in liquidation preference 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, 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 Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
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 his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
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(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee 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
preference 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
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<PAGE>
(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:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officer's 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
8
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Trustee; provided that, nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it by
this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(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, (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. 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
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.
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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(c) 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
and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(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.
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(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.
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.
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 Debentures as so 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;
11
<PAGE>
(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.
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 preference 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; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.
Section 5.5. Guarantee of Payment
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debentures to Holders as provided in the
Trust Agreement.
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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, 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 be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI.
COVENANTS AND SUBORDINATION
Section 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all Senior
Debt of the Guarantor.
Section 6.2. Pari Passu Guarantees.
This Guarantee Agreement shall rank pari passu with any similar Guarantee
Agreements issued by the Guarantor on behalf of the holders of Preferred
Securities issued by Liberty Financial Capital Trust I and Liberty Financial
Capital Trust II.
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
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Debentures 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.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article Eight of the
Indenture and pursuant to which the 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 preference of
all the outstanding Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the giving of
such approval.
Section 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Liberty Financial Companies, Inc.
600 Atlantic Avenue
24th Floor
Boston, Massachusetts 02210-2214
Facsimile No.: 617-_____-______
Attention: _____________
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(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
Liberty Financial Capital Trust I
c/o Liberty Financial Companies, Inc.
600 Atlantic Avenue
24th Floor
Boston, Massachusetts 02210-2214
Facsimile No.: 617-_____-______
Attention: _____________
with a copy to:
State Street Bank and Trust Company
------------------------
------------------------
------------------------
Facsimile No.: 617-
Attention: Corporate Trust Division
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.
Section 8.5. Interpretation.
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
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
15
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(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
Section 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
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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.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
Liberty Financial Companies, Inc.
By: _______________________________________
Name:
Title:
State Street Bank and Trust Company, as
Guarantee Trustee
By: _______________________________________
Name:
Title:
17
GUARANTEE AGREEMENT
Between
LIBERTY FINANCIAL COMPANIES, INC.
(as Guarantor)
and
STATE STREET BANK AND TRUST COMPANY
(as Trustee)
dated as of
____________, 1998
Liberty Financial Capital Trust II
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
ARTICLE I.
DEFINITIONS
<S> <C> <C>
Section 1.1. Definitions.................................................................................1
ARTICLE II.
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application............................................................4
Section 2.2. List of Holders.............................................................................4
Section 2.3. Reports by the Guarantee Trustee............................................................5
Section 2.4. Periodic Reports to the Guarantee Trustee...................................................5
Section 2.5. Evidence of Compliance with Conditions Precedent............................................5
Section 2.6. Events of Default; Waiver...................................................................5
Section 2.7. Event of Default; Notice....................................................................6
Section 2.8. Conflicting Interests.......................................................................6
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee..................................................6
Section 3.2. Certain Rights of Guarantee Trustee.........................................................8
Section 3.3. Indemnity...................................................................................9
ARTICLE IV.
GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee: Eligibility..............................................................9
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee..............................10
ARTICLE V.
GUARANTEE
Section 5.1. Guarantee..................................................................................11
Section 5.2. Waiver of Notice and Demand................................................................11
Section 5.3. Obligations Not Affected...................................................................11
Section 5.4. Rights of Holders..........................................................................12
Section 5.5. Guarantee of Payment.......................................................................12
Section 5.6. Subrogation................................................................................12
Section 5.7. Independent Obligations....................................................................13
<PAGE>
ARTICLE VI.
COVENANTS AND SUBORDINATION
Section 6.1. Subordination..............................................................................13
Section 6.2. Pari Passu Guarantees......................................................................13
ARTICLE VII.
TERMINATION
Section 7.1. Termination................................................................................13
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Successors and Assigns.....................................................................14
Section 8.2. Amendments.................................................................................14
Section 8.3. Notices....................................................................................14
Section 8.4. Benefit....................................................................................15
Section 8.5. Interpretation.............................................................................15
Section 8.6. Governing Law..............................................................................16
</TABLE>
iii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of ______________, 1998, is executed
and delivered by LIBERTY FINANCIAL COMPANIES, INC., a Massachusetts corporation
(the "Guarantor"), having its principal office at 600 Atlantic Avenue, 24th
Floor, Boston, Massachusetts 02210-2214, and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, 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 Liberty Financial Capital Trust II,
a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of ______________, 1998 among the Issuer Trustees
named therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing up to $___________ aggregate liquidation preference of its ____% Trust
Originated Preferred Securities, Series A (liquidation preference $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 Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with State Street Bank and Trust Company, 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 for
the benefit of the Holders from time to time of the Preferred Securities.
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ARTICLE I.
DEFINITIONS
Section 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings. Capitalized
or otherwise defined 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.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or 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; and (vi) every
obligation of the type referred to in clauses (i) through (v) 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.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer; (i) any accrued 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
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the 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 Debentures are distributed to the Holders, the
lesser of (a) the aggregate of the liquidation preference of $25 per Preferred
Security plus accrued and unpaid Distributions on the Preferred Securities to
the date of payment to the extent the Issuer shall have funds on hand available
to make such payment at such time and (b) the amount of assets of the
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Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means State Street Bank and Trust Company, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Issuer, of any 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 Junior Subordinated Indenture dated as of
__________, 1998, as supplemented and amended between the Guarantor and State
Street Bank and Trust Company, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in liquidation preference of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the liquidation preference of all then
outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman and Chief Executive Officer, President or a
Vice President, and by the Treasurer, and Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
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"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
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department 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 that officer's knowledge of and familiarity with the
particular subject.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (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
Debt, whether incurred on or prior to the date of this Guarantee 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 Guarantee or to other Debt which is pari
passu with, or subordinated to, the Guarantee; provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Guarantor which when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Guarantor, (b) any
Debt of the Guarantor to any of its Subsidiaries, (c) Debt to any employee of
the Guarantor, (d) any liability for taxes, (e) Debt or other monetary
obligations to trade creditors created or assumed by the Guarantor or any of its
Subsidiaries in the ordinary course of business in connection with the obtaining
of goods, materials or services, (f) Debt issued under the Indenture and (g) the
Guarantee.
"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.
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.
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(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 (i) semiannually, on or before January 15 and July 15 of each
year, a list, in such form as the Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (ii) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of 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 July 15 of each year, commencing July 15, _____, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) 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.
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.
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Section 2.6. Events of Default; Waiver.
The Holders of a Majority in liquidation preference 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, 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 Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
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 his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
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(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee 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
preference 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
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(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:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
reasonably believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officer's 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
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Trustee; provided that, nothing contained in this Section 3.2(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it by
this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(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, (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. 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
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.
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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(c) 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
and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(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.
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(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.
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.
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 Debentures as so 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;
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(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.
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 preference 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; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.
Section 5.5. Guarantee of Payment
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debentures to Holders as provided in the
Trust Agreement.
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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, 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 be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI.
COVENANTS AND SUBORDINATION
Section 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all Senior
Debt of the Guarantor.
Section 6.2. Pari Passu Guarantees.
This Guarantee Agreement shall rank pari passu with any similar Guarantee
Agreements issued by the Guarantor on behalf of the holders of Preferred
Securities issued by Liberty Financial Capital Trust I and Liberty Financial
Capital Trust II.
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
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Debentures 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.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article Eight of the
Indenture and pursuant to which the 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 preference of
all the outstanding Preferred Securities. The provisions of Article VI of the
Trust Agreement concerning meetings of the Holders shall apply to the giving of
such approval.
Section 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such other
address, facsimile number or to the attention of such other Person as the
Guarantor may give notice to the Holders:
Liberty Financial Companies, Inc.
600 Atlantic Avenue
24th Floor
Boston, Massachusetts 02210-2214
Facsimile No.: 617-_____-______
Attention: _____________
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(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
Liberty Financial Capital Trust II
c/o Liberty Financial Companies, Inc.
600 Atlantic Avenue
24th Floor
Boston, Massachusetts 02210-2214
Facsimile No.: 617-_____-______
Attention: _____________
with a copy to:
State Street Bank and Trust Company
------------------------
------------------------
------------------------
Facsimile No.: 617-
Attention: Corporate Trust Division
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.
Section 8.5. Interpretation.
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
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
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(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections are
to Articles and Sections of this Guarantee Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include the
masculine, feminine and neuter genders.
Section 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
16
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
Liberty Financial Companies, Inc.
By: _______________________________________
Name:
Title:
State Street Bank and Trust Company, as
Guarantee Trustee
By: _______________________________________
Name:
Title:
17
CERTIFICATE OF TRUST
OF
LIBERTY FINANCIAL CAPITAL TRUST I
THIS Certificate of Trust of Liberty Financial Capital Trust I (the
"Trust"), dated as of September 11, 1998, is being duly executed and filed by
the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust formed hereby is Liberty
Financial Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first-above written.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as trustee
of the Trust
By: /s/ Donald G. MacKelcan
-------------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
JAMES ANDREW HILBERT, not in his individual
capacity but solely as trustee of the Trust
/s/ James Andrew Hilbert
-------------------------------------
TRUST AGREEMENT
OF
LIBERTY FINANCIAL CAPITAL TRUST I
THIS TRUST AGREEMENT is made as of September 11, 1998 (this "Trust
Agreement"), by and among Liberty Financial Companies, Inc., a Massachusetts
corporation, as Depositor (the "Depositor"), and Wilmington Trust Company, a
Delaware banking corporation, as trustee, and James Andrew Hilbert, as trustee
(jointly, the "Trustees"). The Depositor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "Liberty Financial
Capital Trust I" (the "Trust"), in which name the Trustees or the Depositor, to
the extent provided herein, may conduct the business of the Trust, make and
execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trust the sum of $10. Such amount shall constitute the initial trust estate.
It is the intention of the parties hereto that the Trust created hereby
constitute a business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. ss. 3801, et seq. (the "Business Trust Act"), and that this document
constitute the governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of trust with the
Delaware Secretary of State in such form as the Trustees may approve.
3. The Depositor and the Trustees will enter into an amended and
restated Trust Agreement satisfactory to each such party to provide for the
contemplated operation of the Trust created hereby and the issuance of the
Preferred or Capital Securities and Common Securities referred to therein. Prior
to the execution and delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with respect of the
trust estate, except as otherwise required by applicable law or as may be
necessary to obtain prior to such execution and delivery any licenses, consents
or approvals required by applicable law or otherwise. Notwithstanding the
foregoing, the Trustees may take all actions deemed proper as are necessary to
effect the transactions contemplated herein.
4. The Depositor, as sponsor of the Trust, is hereby authorized, in
its discretion, (i) to prepare and file with the Securities and Exchange
Commission (the "Commission") and to execute, in the case of the 1933 Act
Registration Statement and 1934 Act Registration Statement (as herein defined),
on behalf of the Trust, (a) a Registration Statement (the "1933 Act Registration
Statement"), including all pre-effective and post-effective amendments thereto,
relating to the registration under the Securities Act of 1933, as amended (the
"1933 Act"), of the Preferred or Capital Securities of the Trust, (b) any
preliminary prospectus or prospectus or supplement thereto relating to the
Preferred or Capital Securities of the Trust required to be filed pursuant to
the 1933 Act, and (c) a Registration Statement on Form 8-A or other appropriate
form (the "1934 Act Registration Statement"), including all pre-effective and
post-effective amendments thereto, relating to the registration of the Preferred
or Capital Securities of the Trust under the Securities Exchange Act of 1934, as
amended; (ii) if and at such time as determined by the Depositor, to file with
the New York Stock Exchange or other exchange, or the National Association of
Securities Dealers ("NASD"), and execute on behalf of the Trust a listing
<PAGE>
application and all other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the Preferred or
Capital Securities of the Trust to belisted on the New York Stock Exchange or
such other exchange, or the NASD's Nasdaq National Market; (iii) to file and
execute on behalf of the Trust, such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents that shall be necessary or desirable to register the
Preferred or Capital Securities of the Trust under the securities or "Blue Sky"
laws of such jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable; (iv) to execute and deliver letters or documents to, or
instruments for filing with, a depository relating to the Preferred or Capital
Securities of the Trust; and (v) to execute, deliver and perform on behalf of
the Trust an underwriting agreement with one or more underwriters relating to
the offering of the Preferred or Capital Securities of the Trust.
In the event that any filing referred to in this Section 4 is required
by the rules and regulations of the Commission, the New York Stock Exchange or
other exchange, NASD, or state securities or "Blue Sky" laws to be executed on
behalf of the Trust by the Trustees, the Trustees, in their capacity as trustees
of the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Trustees, in their capacity as trustees of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the New York
Stock Exchange or other exchange, NASD, or state securities or "Blue Sky" laws.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of trustees of the Trust initially shall be two and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Depositor which
may increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware. Subject to the foregoing, the Depositor is entitled to
appoint or remove without cause any trustee of the Trust at any time. Any
trustee of the Trust may resign upon thirty days' prior notice to the Depositor.
7. The Depositor hereby agrees to (i) reimburse the Trustees for all
reasonable expenses (including reasonable fees and expenses of counsel and other
experts) and (ii) indemnify, defend and hold harmless the Trustees and any of
the officers, directors, employees and agents of the Trustees (the "Indemnified
Persons") from and against and all losses, damages, liabilities, claims,
actions, suits, costs, expenses, disbursements (including the reasonable fees
and expenses of counsel), taxes and penalties of any kind and nature whatsoever
(collectively, "Expenses"), to the extent that such Expenses arise out of or are
imposed upon or asserted at any time against such Indemnified Persons with
respect to the performance of this Trust Agreement, the creation, operation or
termination of the Trust or the transactions contemplated hereby; provided,
however, that the Depositor shall not be required to indemnify any Indemnified
Person
-2-
<PAGE>
for any Expenses which are a result of the willful misconduct, bad faith
or gross negligence of such Indemnified Person.
8. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
LIBERTY FINANCIAL COMPANIES, INC., as
Depositor
By: /s/ James Andrew Hilbert
----------------------------------
Name: James Andrew Hilbert
Title: Senior Vice President, Chief
Financial Officer and Treasurer
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
trustee of the Trust
By: /s/ Donald G. MacKelcan
----------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
JAMES ANDREW HILBERT, not in his
individual capacity but solely as
trustee of the Trust
/s/ James Andrew Hilbert
----------------------------------------
-3-
EXHIBIT 4.12
================================================================================
FORM OF
AMENDED AND RESTATED
TRUST AGREEMENT
among
LIBERTY FINANCIAL COMPANIES, INC., AS DEPOSITOR,
[STATE STREET BANK AND TRUST COMPANY]
AS PROPERTY TRUSTEE,
[_______________________________ ]
AS DELAWARE TRUSTEE,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF _________________, 1998
LIBERTY FINANCIAL CAPITAL TRUST I
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I.
DEFINED TERMS .......................................................................... 1
Section 1.1 Definitions ............................................................. 1
ARTICLE II.
ESTABLISHMENT OF THE TRUST ............................................................. 10
Section 2.1 Name .................................................................... 10
Section 2.2 Office of the Delaware Trustee; Principal Place of Business ............. 10
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses ......... 11
Section 2.4 Issuance of the Preferred Securities .................................... 11
Section 2.5 Issuance of the Common Securities; Subscription and Purchase
of Debentures ........................................................... 11
Section 2.6 Declaration of Trust .................................................... 12
Section 2.7 Authorization to Enter into Certain Transactions ........................ 12
Section 2.8 Assets of Trust ......................................................... 16
Section 2.9 Title to Trust Property ................................................. 16
ARTICLE III.
PAYMENT ACCOUNT ........................................................................ 16
Section 3.1 Payment Account ......................................................... 16
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION .............................................................. 17
Section 4.1 Distributions ........................................................... 17
Section 4.2 Redemption .............................................................. 17
Section 4.3 Subordination of Common Securities ...................................... 19
Section 4.4 Payment Procedures ...................................................... 20
Section 4.5 Tax Returns and Reports ................................................. 20
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust ............................. 21
Section 4.7 Payments under Indenture ................................................ 21
ARTICLE V.
TRUST SECURITIES CERTIFICATES .......................................................... 21
Section 5.1 Initial Ownership ....................................................... 21
Section 5.2 The Trust Securities Certificates ....................................... 21
<PAGE>
Section 5.3 Execution and Delivery of Trust Securities Certificates ................. 21
Section 5.4 Registration of Transfer and Exchange of Preferred Securities ........... 22
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates ............................................................ 23
Section 5.6 Persons Deemed Securityholders .......................................... 23
Section 5.7 Access to List of Securityholders' Names and Addresses .................. 23
Section 5.8 Maintenance of Office or Agency ......................................... 23
Section 5.9 Appointment of Paying Agent ............................................. 24
Section 5.10 Ownership of Common Securities by Depositor ............................. 24
Section 5.11 Book-Entry Preferred Securities Certificates; Common
Securities Certificate .................................................. 24
Section 5.12 Notices to Clearing Agency .............................................. 25
Section 5.13 Definitive Preferred Securities Certificates ............................ 25
Section 5.14 Rights of Securityholders ............................................... 26
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING .............................................. 28
Section 6.1 Limitations on Voting Rights ............................................ 28
Section 6.2 Notice of Meetings....................................................... 29
Section 6.3 Meetings of Preferred Securityholders ................................... 29
Section 6.4 Voting Rights ........................................................... 30
Section 6.5 Proxies, etc. ........................................................... 30
Section 6.6 Securityholder Action by Written Consent ................................ 30
Section 6.7 Record Date for Voting and Other Purposes ............................... 30
Section 6.8 Acts of Securityholders ................................................. 31
Section 6.9 Inspection of Records ................................................... 32
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES ......................................................... 32
Section 7.1 Representations and Warranties of the Bank, the Property
Trustee and the Delaware Trustee ........................................ 32
Section 7.2 Representations and Warranties of Depositor ............................. 33
ARTICLE VIII.
THE TRUSTEES ........................................................................... 34
Section 8.1 Certain Duties and Responsibilities ..................................... 34
Section 8.2 Certain Notices ......................................................... 35
Section 8.3 Certain Rights of Property Trustee ...................................... 36
Section 8.4 Not Responsible for Recitals or Issuance of Securities .................. 38
Section 8.5 May Hold Securities ..................................................... 38
Section 8.6 Compensation; Indemnity; Fees ........................................... 38
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees ............ 39
Section 8.8 Conflicting Interests ................................................... 40
Section 8.9 Co-Trustees and Separate Trustee ........................................ 40
<PAGE>
Section 8.10 Resignation and Removal; Appointment of Successor ....................... 41
Section 8.11 Acceptance of Appointment by Successor .................................. 43
Section 8.12 Merger, Conversion, Consolidation or Succession to Business ............. 44
Section 8.13 Preferential Collection of Claims Against Depositor or Trust ............ 44
Section 8.14 Reports by Property Trustee ............................................. 45
Section 8.15 Reports to the Property Trustee ......................................... 45
Section 8.16 Evidence of Compliance with Conditions Precedent ........................ 45
Section 8.17 Number of Trustees ...................................................... 46
Section 8.18 Delegation of Power ..................................................... 46
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER .................................................... 47
Section 9.1 Termination Upon Expiration Date ........................................ 47
Section 9.2 Early Termination ....................................................... 47
Section 9.3 Termination ............................................................. 47
Section 9.4 Liquidation ............................................................. 47
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements
of the Trust ............................................................ 49
ARTICLE X.
MISCELLANEOUS PROVISIONS ............................................................... 50
Section 10.1 Limitation of Rights of Securityholders ................................. 50
Section 10.2 Amendment ............................................................... 50
Section 10.3 Separability ............................................................ 51
Section 10.4 Governing Law ........................................................... 51
Section 10.5 Payments Due on Non-Business Day ........................................ 52
Section 10.6 Successors .............................................................. 52
Section 10.7 Headings ................................................................ 52
Section 10.8 Reports, Notices and Demands ............................................ 52
Section 10.9 Agreement Not to Petition ............................................... 53
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act .................. 53
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and Indenture ......... 54
</TABLE>
<PAGE>
LIBERTY FINANCIAL CAPITAL TRUST I
---------------------------------
Certain Sections of this Trust Agreement Relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- --------------- ---------------
<S> <C>
Section 310(a)(1) ............................................. 8.7
(a)(2) ............................................. 8.7
(a)(3) ............................................. 8.9
(a)(4) ............................................. 2.7(a)(ii)
(b) ................................................ 8.8
Section 311(A) ................................................ 8.13
(b) ................................................ 8.13
Section 312(a) ................................................ 5.7
(b) ................................................ 5.7
(c) ................................................ 5.7
Section 313(a) ................................................ 8.14(a)
(a)(4) ............................................. 8.14(b)
(b) ................................................ 8.14(b)
(c) ................................................ 10.8
(d) ................................................ 8.14(c)
Section 314(a) ................................................ 8.15
(b) ................................................ Not Applicable
(c)(1) ............................................. 8.16
(c)(2) ............................................. 8.16
(c)(3) ............................................. Not Applicable
(d) ................................................ Not Applicable
(e) ................................................ 1.1, 8.16
Section 315(a) ................................................ 8.1(a), 8.3(a)
(b) ................................................ 8.2, 10.8
(c) ................................................ 8.1(a)
(d) ................................................ 8.1, 8.3
(e) ................................................ Not Applicable
Section 316(a) ................................................ Not Applicable
(a)(1)(A) .......................................... Not Applicable
(a)(1)(B) .......................................... Not Applicable
(a)(2) ............................................. Not Applicable
(b) ................................................ 5.14
(c) ................................................ 6.7
Section 317(a)(1).............................................. Not Applicable
(a)(2) ............................................. Not Applicable
(b) ................................................ 5.9
Section 318(a) ................................................ 10.10
</TABLE>
- ---------------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _________________, 1998,
among (i) Liberty Financial Companies, Inc., a Massachusetts corporation
(including anysuccessors or assigns, the "Depositor"), (ii) State Street Bank
and Trust Company, a trust company duly organized and existing under the laws of
The Commonwealth of Massachusetts, as property trustee, (in each such capacity,
the "Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) [_________________________], a
Delaware corporation, as Delaware trustee (the "Delaware Trustee"), (iv)
[_________________________], an individual, and [___________________________],
an individual, each of whose address is c/o Liberty Financial Companies, Inc.,
600 Atlantic Avenue, Boston, Massachusetts 02210-2214 (each an "Administrative
Trustee" and collectively the "Administrative Trustees") (the Property Trustee,
the Delaware Trustee and the Administrative Trustees referred to collectively as
the "Trustees") and (v) the several Holders, as hereinafter defined.
W I T N E S S E T H :
WHEREAS, the Depositor and the Trustees have heretofore duly declared and
established a business trust pursuant to the Delaware Business Trust Act by the
entering into that certain Trust Agreement, dated as of _________________, 1998
(the "Original Trust Agreement"), and by the execution and filing by the
Trustees with the Secretary of State of the State of Delaware of the Certificate
of Trust, filed on ______________, 1998, attached as Exhibit A; and
WHEREAS, the Depositor and the 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 Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and for
the benefit of the Securityholders, hereby amnds and restates the Original Trust
Agreement in its entirety and agrees as follows:
Article I.
DEFINED TERMS
Section 1.1 Definitions. 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;
<PAGE>
(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) 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 Trust Agreement; and
(d) the words "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 Debentures
for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each of [ ], and [ ], solely in such
Person's capacity as Administrative Trustee of the Trust formed and continued
hereunder and not in such Person's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor 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 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. "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 60 consecutive days; or
2
<PAGE>
(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 10.9.
"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 Directors, or such committee of the Board of
Directors or officers of the Company to which authority to act on behalf of the
Board of Directors has been delegated, and to be in full force and effect on the
date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.11.
"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
Debenture Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the
Trust, the Depositor and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, 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 Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the First Time of Delivery, which date is also
the date of execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
3
<PAGE>
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
of the 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 as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee located in [Boston, Massachusetts].
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to
be redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debenture Tax Event" means a "Tax Event" as defined in the Indenture.
"Debenture Trustee" [State Street Bank and Trust Company, a trust
company organized under the laws of The Commonwealth of Massachusetts], and any
successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's
____% Junior Subordinated Deferrable Interest Debentures, Series ___, issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both
(as the context requires) of (a) Preferred Securities Certificates issued as
Book-Entry Preferred Securities Certificate as provided in Section 5.11(a) and
(b) Preferred Securities Certificates issued in certificated, fully registered
form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from time
to time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
4
<PAGE>
"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.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Property Trustee 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 Property Trustee 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 Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with 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 defaulting Trustee or Trustees by the Holders of at least 25% in
aggregate liquidation preference 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; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property Trustee
within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the 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.
"First Time of Delivery" has the meaning specified in the Underwriting
Agreement.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and [State Street Bank and Trust Company], as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Preferred Securities, as amended from time to
time.
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"Indenture" means the Junior Subordinated Indenture, dated as of
_________ 1, 1998, between the Depositor and the Debenture Trustee, as trustee,
as amended or supplemented from time to time.
"Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an "investment company" that is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities under 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 Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures 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, and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section
9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the President or
a Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. One of the officers signing
an Officers' Certificate given pursuant to Section 8.16 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
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(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of any thereof, and who shall be reasonably acceptable to the Property
Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Preferred Securities theretofore executed
and delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore cancelled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Preferred Securities; provided that, if
such Preferred Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided, however, that in
determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Preferred Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred Securities owned by
the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (i) in
determining whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Preferred Securities that such 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
Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding
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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.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate 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 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the
assets of the 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 as 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 commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder 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 that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
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"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
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Second Time of Delivery" has the meaning specified in the
Underwriting Agreement.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Trust Securities is 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; provided, however, that in determining whether the
Holders of the requisite amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, then for the purpose of any such
determination, so long as Definitive Preferred Securities Certificates have not
been issued, the term Securityholders or Holders as used herein shall refer to
the Owners.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States Federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, will not be, deductible by the Depositor, in
whole or in part, for United States Federal income tax purposes or (iii) the
Trust is, or will be within 90 days after the date of such Opinion of Counsel,
subject to more than a de minimis amount of other taxes, duties, assessments or
other governmental charges.
"Time of Delivery" means, collectively, the First Time of Delivery and
the Second Time of Delivery.
"Trust" means the Delaware business trust created and continued hereby
and identified on the cover page to this Trust 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,
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including all exhibits hereto, including, for all purposes of this Trust
Agreement and any such 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 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.
"Trust Property" means (a) the Debentures, (b) the rights of the
Property Trustee under the Guarantee, (c) any cash on deposit in, or owing to,
the Payment Account and (d) 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.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Pricing Agreement, dated as of
_____________, 1998, among the Trust, the Depositor and the underwriters named
therein incorporating the Underwriting Agreement dated ____________, 1998.
ARTICLE II.
ESTABLISHMENT OF THE TRUST
Section 2.1 Name.
The Trust continued hereby shall be known as "Liberty Financial Capital
Trust I," 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 Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.
Section 2.2 Office of the Delaware Trustee; Principal Place of
Business.
The address of the Delaware Trustee in the State of Delaware is c/o ______,
or such other address in the State of Delaware as the Delaware Trustee may
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designate by written notice to the Securityholders and the Depositor. The
principal executive office of the Trust is c/o Liberty Financial Companies,
Inc., 600 Atlantic Avenue, Boston, Massachusetts 02210-2214.
Section 2.3 Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust 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 Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.4 Issuance of the Preferred Securities.
On ________________, ______ the Depositor, on behalf of the Trust and
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 Trust, shall
execute in accordance with Section 5.2 and deliver to the Underwriters named in
the Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of
Preferred Securities having an aggregate Liquidation Amount of
$__________________, against receipt of such aggregate purchase price of such
Preferred Securities of $_________________, which amount the Administrative
Trustee shall promptly deliver to the Property Trustee. If there is a Second
Time of Delivery, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Underwriters named in
the Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of up
to Preferred Securities having an aggregate Liquidation Amount of up to
$__________, against receipt of such aggregate purchase price of such Preferred
Securities of $____________, which amount such Administrative Trustees shall
promptly deliver to the Property Trustee, on the date specified pursuant to the
Underwriting Agreement.
Section 2.5 Issuance of the Common Securities; Subscription and
Purchase of Debentures.
Contemporaneously with the execution and delivery of this Trust Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of Common
Securities having an aggregate Liquidation Amount of $____________ against
payment by the Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Debentures, registered in the name of the Trust and having an
aggregate principal amount equal to $______________, and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the sum of
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$_____________. If there is a Second Time of Delivery, an Administrative
Trustee, on behalf of the Trust, shall execute in accordance with Section 5.2
and deliver to the Depositor Common Securities Certificates, registered in the
name of the Depositor, in an aggregate amount of up to Common Securities having
an aggregate Liquidation Amount of up to $_______________ against payment by the
Depositor of such amount. Contemporaneously therewith, an Administrative
Trustee, on behalf of the Trust, shall subscribe to and purchase from the
Depositor Debentures, registered in the name of the Trust and having an
aggregate principal amount of up to $__________________, and, in satisfaction of
the purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the amount received from one of the
Administrative Trustees pursuant to the last sentence of Section 2.4.
Section 2.6 Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Trust and the Securityholders. 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 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 Trust for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Business Trust Act.
Section 2.7 Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the 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 Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have
the power and authority to act on behalf of the Trust with respect to
the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense Agreement
and the Certificate Depository
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Agreement and such other agreements as may be necessary or
desirable in connection with the purposes and function of the
Trust;
(C) assisting in the registration of the Preferred
Securities under the Securities Act of 1933, as amended, and
under 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 and the registration of the Preferred Securities
under the Securities Exchange Act of 1934, as amended, and the
preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(E) the sending of notices (other than notices of default)
and other information regarding the Trust Securities and the
Debentures to the Securityholders 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) registering transfer of the Trust Securities in
accordance with this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(I) unless otherwise determined by the Depositor, the
Property Trustee or the Administrative Trustees, or as otherwise
required by the Delaware Business Trust Act or the Trust
Indenture Act, to execute on behalf of the Trust (either acting
alone or together with any or all of the 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 Trustees may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the
power, duty and authority to act on behalf of the Trust with respect
to the following matters:
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(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Payment
Account;
(D) the distribution of amounts owed to the Securityholders
in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges
of a holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders 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 Trust and the
preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(I) after an Event of Default 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 Securityholders (without
consideration of the effect of any such action on any particular
Securityholder); and
(J) except as otherwise provided in this Section 2.7(a)(ii),
the Property Trustee shall have none of the duties, liabilities,
powers or the authority of the Administrative Trustees set forth
in Section 2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the 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 Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United States Federal
income tax purposes, (iv) incur any indebtedness for borrowed
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money or issue any other debt or (v) take or consent to any action that would
result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the interest
of the Trust or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the 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 Trust with the Commission
and the execution on behalf of the Trust of a registration statement
on the appropriate form in relation to the Preferred Securities,
including any amendments thereto;
(ii) the determination of the States 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 which must be taken by or on behalf of the Trust, and the
advice to the Trustees of actions they must take on behalf of the
Trust, and the preparation for execution and filing of any documents
to be executed and filed by the Trust or on behalf of the Trust, as
the Depositor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an 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 Trust with the Commission
and the execution on behalf of the Trust of a registration statement
on Form 8-A relating to the registration of the 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 Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or taxed as a corporation for United States Federal income
tax purposes and so that the Debentures will be treated as indebtedness of
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the Depositor for United States Federal income tax purposes. In this connection,
the Depositor and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that each of the Depositor and the Administrative Trustees determines
in their 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 Preferred Securities.
Section 2.8 Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
Section 2.9 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 for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
Section 3.1 Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee 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 Securityholders 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 Debentures. 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 4.1 Distributions.
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from _________________,
________________, and, except in the event that the Depositor exercises its
right to defer the payment of interest on the Debentures pursuant to the
Indenture, shall be payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing on _____________________, 1998. 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, payment of such Distribution shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which distributions are payable in
accordance with this Section 4.1(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property, and, as a practical matter, the Distributions on the Trust
Securities shall be payable at a rate of _____% per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any full
period shall be computed on the basis of a 360-day year of twelve 30-day months.
The amount of Distributions for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months.
The amount of Distributions payable for any period shall include the Additional
Amounts, if any.
(c) 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 Trust has funds then on hand and
available in the Payment Account for the payment of such Distributions.
(d) 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 on the relevant record date, which
shall be one Business Day prior to such Distribution Date; provided, however,
that in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
Section 4.2 Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of
the
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Debentures, the Trust 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 Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) 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 cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. 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 Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, [subject to Section 4.2(c),] the Property Trustee will, so
long as the Preferred Securities are in book-entry-only form, irrevocably
deposit with the Clearing Agency for the Preferred Securities funds
sufficient to pay the applicable Redemption Price and will give such
Clearing Agency irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof. If the Preferred Securities are no
longer in book-entry-only form, the Property Trustee, [subject to Section
4.2(c),] will irrevocably deposit with the Paying Agent funds sufficient to
pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their 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
Register for the Trust Securities on the relevant record dates for the
related Distribution Dates. If notice of redemption shall have been given
and funds deposited as required, then upon the date of such deposit, all
rights of Securityholders holding Trust Securities so called for redemption
will cease, except the right of such Securityholders to receive the
Redemption Price
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and any Distribution payable on or prior to the Redemption Date, but
without interest, and such Securities will cease to be outstanding. In the
event that any date on which any Redemption Price is payable is not a
Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay), except that,
if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case, with the same
force and effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption
is improperly withheld or refused and not paid either by the Trust or by
the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the 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.
(d) Payment of the Redemption Price on the Trust Securities shall be
made to the record holders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be one Business
Day prior to the relevant Redemption Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date fifteen days prior to the relevant
Redemption Date.
(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 on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption, by such
method (including, without limitation, by lot) as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the Security 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 Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
Section 4.3 Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price 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
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Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution (including Additional Amounts, if applicable) on, or Redemption
Price of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions
(including Additional Amounts, if applicable) on all Outstanding 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, 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
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any 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 any such Event of Default under this Trust Agreement with
respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
Section 4.4 Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) 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, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable distribution dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.
Section 4.5 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
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
provided on such form. The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns and
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reports promptly after such filing or furnishing. The Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority.
Section 4.7 Payments under Indenture.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to Section 5.8 of
the Indenture.
Article V.
TRUST SECURITIES CERTIFICATES
Section 5.1 Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to 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 Trust.
Section 5.2 The Trust Securities Certificates.
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 Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the 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 Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
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Section 5.3 Execution and Delivery of Trust Securities Certificates.
At each Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor, in authorized denominations.
Section 5.4 Registration of Transfer and Exchange of Preferred Securities
Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
registrar designated by the Depositor (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 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and 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 dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the option of
a Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by an
Administrative 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 Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
maybe imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
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Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust 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 Trust 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 Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection with
the issuance of any new Trust Securities Certificate under this Section, 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 Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the assets of the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Trust Securities Certificate shall be found
at any time.
Section 5.6 Persons Deemed Securityholders.
The Administrative Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by any notice
to the contrary.
Section 5.7 Access to List of Securityholders' Names and Addresses.
[Each Holder of a ?]Trust Securities Certificate, and each Owner shall be
deemed to have agreed not to hold the Depositor, the Property 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 5.8 Maintenance of Office or Agency.
The Administrative Trustees shall maintain 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 Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate Liberty Financial Companies, Inc.,
600 Atlantic Avenue, Boston, Massachusetts 02210-2214 Attn: __________, as its
principal corporate trust office for such purposes. The Administrative Trustees
shall give prompt written notice to the Depositor and to the Securityholders of
any change in the location of the Securities Register or any such office or
agency.
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Section 5.9 Appointment of Paying Agent.
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Bank, and any co-paying agent chosen by the Bank, and
acceptable to the Administrative Trustees and the Depositor. Any Person acting
as Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees, the Property Trustee and the
Depositor. In the event that the Bank 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 that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the 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 Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
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 5.10 Ownership of Common Securities by Depositor.
At each Time of Delivery, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than a transfer in connection with a consolidation or merger of
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, any attempted transfer of the
Common Securities shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 5.11 Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance,
will be issued
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in the form of a typewritten Preferred Securities Certificate or Certificates
representing Book-Entry Preferred Securities Certificates, to be delivered to
The Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Trust. Such Preferred Securities Certificate or Certificates shall initially
be registered on the Securities Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Owner will receive a Definitive Preferred
Securities Certificate representing such Owner's interest in such Preferred
Securities, except as provided in Section 5.13. Unless and until Definitive
Preferred Securities Certificates have been issued to Owners pursuant to Section
5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled
to deal with the Clearing Agency for all purposes of this Trust
Agreement relating to the Book-Entry Preferred Securities Certificates
(including the payment of the Liquidation Amount of and Distributions
on the Book-Entry Preferred Securities and the giving of instructions
or directions to Owners of Book-Entry Preferred Securities) as the
sole Holder of Book-Entry Preferred Securities and shall have no
obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless
and until Definitive Preferred Securities Certificates are issued
pursuant to Section 5.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit payments on the Preferred Securities to such
Clearing Agency Participants.
(b) 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 5.12 Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
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Section 5.13 Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustee shall notify
the Clearing Agency and the Clearing Agency shall notify all Owners of Preferred
Securities Certificates and the other Trustees of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten Preferred
Securities Certificate or Certificates representing the Book Entry Preferred
Securities Certificates 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. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. 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.
Section 5.14 Rights of Securityholders.
(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 Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the 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 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
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the 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 Debenture Event of Default, the Debenture Trustee fails or the holders of
not less than 25% in principal amount of the outstanding Debentures fail to
declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in writing
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to the Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable, provided that the payment of principal and
interest on such Debentures shall remain subordinated to the extent provided in
the Indenture.
At any time after such a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Depositor has paid or deposited with the Debenture Trustee a
sum sufficient to pay
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Property Trustee, their
agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other than
the non-payment of the principal of the Debentures which has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The Holders of a majority in aggregate liquidation preference of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such 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 Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, 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.
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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, that, unless such declaration
of acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.14(b).
(c) For so long as any 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 Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Preferred 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 the
principal amount of or interest on Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holder (a "Direct
Action"). In connection with any such Direct Action, the rights of the Holders
of the Common Securities will be subrogated to the rights of any Holder of the
Preferred Securities to the extent of any payment made by the Depositor to such
Holder of Preferred Securities as a result of such Direct Action. Except as set
forth in Section 5.14(b) and (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 Debentures.
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.1 Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and
10.2 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 Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the
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principal of all the Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Preferred Securities, provided, however, that where a consent under
the Indenture would require the consent of each Holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Preferred Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of Preferred Securities, except by a subsequent vote of the Holders of Preferred
Securities. The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of default received from the Debenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States Federal
income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the 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 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 Outstanding 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, the Trust would cause the Trust to fail
or cause to be classified as a grantor trust for United States Federal income
tax purposes.
Section 6.2 Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Section 6.3 Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
record of 25% of the Preferred Securities (based upon their Liquidation Amount)
and the Administrative Trustees or the Property Trustee may, at anytime in their
discretion, call a meeting of Preferred Securityholders to vote on any matters
as to which
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Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount)held
by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
Section 6.4 Voting Rights.
Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
Section 6.5 Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the 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 Securityholders 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 Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
Section 6.6 Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
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Section 6.7 Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any distribution on the 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 Securityholders or the
payment of a distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes
Section 6.8 Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to 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 Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the 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 his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder 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 Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder 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
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of which may do so pursuant to such appointment with regard to all or any part
of such liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any person or entity.
Section 6.9 Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties of the Bank, 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 Securityholders that:
(a) the Property Trustee is a [trust company] duly organized, validly
existing and in good standing under the laws of [The Commonwealth of
Massachusetts];
(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 corporation duly organized,
validly existing and in good standing in the State of Delaware;
(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;
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(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, (ii) 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 (iii) violate any 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 or therein 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 Federal law governing the banking, trust or general powers of the
Property Trustee or the Delaware Trustee, as the case may be, under the laws of
the United States or the State of Delaware;
(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 which,
individually or in the aggregate, would materially and adversely affect the
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 7.2 Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that (a) the Trust Securities Certificates issued at each Time
of Delivery on behalf of the Trust have been duly authorized and will have been,
duly and validly executed, issued and delivered by the Trustees pursuant to the
terms and provisions of, and in accordance with the requirements of, this
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Trust Agreement and the Securityholders 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 Trust (or the Trustees on behalf of the 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, as the case may be, of this Trust Agreement.
ARTICLE VIII.
THE TRUSTEES
Section 8.1 Certain Duties and Responsibilities.
(a) The duties and responsibilities of the 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 the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if 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 conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release the Property
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct. To the extent that, at law or in equity,
an Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, such
Administrative Trustee shall not be liable to the Trustor to any Securityholder
for such 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 Administrative Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative 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
Securityholder, 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 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 Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
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(c) 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 willful misconduct, except that:
(i) 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;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
Liquidation Amount of the Trust 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;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures 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;
(iv) 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; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
Section 8.2 Certain Notices.
Within five Business 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 10.8, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
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 Debentures
pursuant to the Indenture, the
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Administrative Trustee shall transmit, in the manner and to the extent provided
in Section 10.8, notice of such exercise to the Securityholders and the Property
Trustee, unless such exercise shall have been revoked.
Section 8.3 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 or
(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 Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor 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 reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Depositor or
the Administrative Trustees;
(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
rerecording, refiling or reregistration thereof;
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(f) the Property Trustee may consult with counsel (which counsel may
be counsel to 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, such counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees; the Property Trustee shall
have the right at any time to seek instructions concerning the administration of
this 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 Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(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 Securityholders, 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 or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney 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 of the Trust Securities
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; and
(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.
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No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 8.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
Section 8.5 May Hold Securities.
Except as provided in the definition of the term "Outstanding" in Article
I, any Trustee or any other agent of any Trustee or the 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, may otherwise deal with the Trust with the
same rights it would have if it were not a Trustee or such other agent.
Section 8.6 Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (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
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (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
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust or its Affiliates,
(referred to herein as an "Indemnified Person") from and against any loss,
damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no
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Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(d) to the fullest extent permitted by applicable law, to advance
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Depositor of (i) a written affirmation by or on behalf of the
Indemnified Person of its or his good faith belief that it or he has met the
standard of conduct set forth in this Section 8.6 and (ii) an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in the preceding subsection.
The provisions of this Section 8.6 shall survive the termination of this
Trust Agreement.
No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 8.6.
The Depositor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own
account(individually or as a partner or fiduciary) or to recommend to others any
such particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees.
(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
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, 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, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
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(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 that shall act
through one or more persons authorized to bind such entity.
Section 8.8 Conflicting Interests.
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.
Section 8.9 Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
anytime 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, by agreed
action of the majority of such Trustees, shall have 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. If the Depositor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case a Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment. Any co-trustee or
separate trustee appointed pursuant to this Section 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.
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.
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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 and delivered 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 Trustees specified hereunder, shall be exercised,
solely by such Trustees 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.
(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, and, in case a Debenture 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
resigned or removed may be appointed in the manner provided in this Section.
(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 Trustee (the "Relevant 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 8.11.
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Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time by giving written notice thereof to the Securityholders. If
the instrument of acceptance by the successor Trustee required by Section 8.11
shall not have been delivered to the Relevant Trustee within 30 days after the
giving of such notice of resignation, the Relevant Trustee may petition, at the
expense of the Trust, any court of competent jurisdiction for the appointment of
a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If a
Debenture 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 a majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring 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 Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders, by
Act of the Securityholders 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
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 Debenture Event of Default shall have
occurred and be continuing, the Common Securityholder by Act of the Common
Securityholder delivered to the Administrative Trustee shall promptly appoint a
successor Administrative Trustee or Administrative Trustees and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
by the Common Securityholder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder who has
been a Securityholder of Trust 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 Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 10.8 and shall give notice to the Depositor.
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.
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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 Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of 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).
Section 8.11 Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee such successor
Trustee so appointed shall execute, acknowledge and deliver to the Trust 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 Depositor 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 if the Property Trustee is the resigning Trustee shall duly
assign, transfer and deliver to the successor Trustee all property and money
held by such retiring Property Trustee hereunder.
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 (a)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 Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees 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 Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall 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 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 first or second preceding paragraph, as the case may be.
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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 8.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee
maybe merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant 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.
Section 8.13 Preferential Collection of Claims Against Depositor or Trust.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities (or, if the
Trust Securities are Discount Securities, such portion of the liquidation amount
as may be specified in the terms of such 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
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to authorize the Property Trustee to vote in respect of the claim of any Holder
in any such proceeding.
Section 8.14 Reports by Property Trustee.
(a) Not later than July 15 of each year commencing with July 15, 1999,
the Property Trustee shall transmit to all Securityholders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of such December 31
with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to
the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with all
of its obligations under this Trust Agreement during the twelve-month
period (or, in the case of the initial report, the period since the
Closing Date) ending with such December 31 or, if the Property Trustee
has not complied in any material respect with such obligations, a
description of such noncompliance; and
(iii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its
opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders
such 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, with the Commission and with the Depositor.
Section 8.15 Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(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.
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Section 8.16 Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this 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 8.17 Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, 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 8.18 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 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, as set forth herein.
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ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
Section 9.1 Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2053 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
Section 9.2 Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from the Depositor
at any time (which direction is optional and wholly within the discretion of the
Depositor) to terminate the Trust and distribute Debentures to Securityholders
in exchange for the Preferred Securities;
(c) the redemption of all of the Preferred Securities in connection
with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 9.3 Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the 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 Trust or
the Securityholders.
Section 9.4 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 Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid mailed not later than 30 nor more
than 60
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days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All 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 Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Administrative Trustees or 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 Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust 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 Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall use its reasonable efforts to have the Debentures listed on
the New York Stock Exchange or on such other exchange, interdealer quotation
system or self-regulatory organization as the Preferred Securities are then
listed, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust 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 Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, 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 Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for
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distribution to Securityholders, after satisfaction of liabilities to creditors
of the 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 dissolution, winding up or termination, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the 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 dissolution, winding-up or termination pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a Debenture
Event of Default has occurred and is continuing, the Preferred Securities shall
have a priority over the Common Securities.
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The 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 corporation or other body, except pursuant
to this Section 9.5. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, the 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 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 rank
the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Depositor expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Debentures,
(iii) the Successor Securities are listed or traded, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or other organization on which the Preferred Securities are then listed
or traded, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
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 Trust nor such successor entity will
be required to register as an investment company under the 1940
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Act and (viii) the Depositor owns all of the Common Securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount 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 entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the successor entity to be classified
as other than a grantor trust for United States Federal income tax purposes.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.1 Limitation of Rights of Securityholders.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.2 Amendment.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, the Administrative Trustees and the Depositor, without the
consent of any Securityholders, (i) to cure any ambiguity, correct or supplement
any provision herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this 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 Trust will be classified for United States Federal income tax
purposes as a grantor trust at all times that any Trust Securities are
outstanding or to ensure that the Trust will not be required to register as an
investment company under the 1940 Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Trustees and the Depositor with (i)
the consent of Trust Securityholders representing not less than a majority
(based upon Liquidation Amounts) of the Trust Securities then Outstanding and
(ii)receipt by the Trustees of an Opinion of Counsel to the
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effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States Federal income tax purposes or the Trust's
exemption from status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.3 or 6.6 hereof), 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 Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee 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.
Section 10.3 Separability.
In case any provision in this Trust Agreement or in the Trust 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 10.4 Governing Law.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the 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.
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Section 10.5 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 maybe
made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
Section 10.6 Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee, including
any successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under Article Eight 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 10.7 Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
Section 10.8 Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder 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
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Liberty Financial
Companies, Inc., 600 Atlantic Avenue, Boston, Massachusetts 02210-2214,
Attention: ____________, facsimile no.: 617-___-_____. Any notice to Preferred
Securityholders shall also be given to such owners as have, within two years
preceding the giving of such notice, filed their names and addresses with the
Property Trustee for that purpose. Such notice, demand or other communication to
or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property
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Trustee to [State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110]; (b) with respect to the Delaware Trustee, to [ ]; and (c)
with respect to the Administrative Trustees, to them at the address above for
notices to the Depositor, marked "Attention Administrative Trustees of Liberty
Financial Capital Trust I." Such notice, demand or other communication to or
upon the Trust or the Property Trustee shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Trust or the
Property Trustee.
Section 10.9 Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, 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 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 stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
Section 10.10 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.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision 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.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
53
<PAGE>
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
LIBERTY FINANCIAL COMPANIES, INC.
By:
--------------------------------
Name:
Title:
[STATE STREET BANK AND TRUST
COMPANY], as Property Trustee
By:
--------------------------------
Name:
Title:
[ ], as
-------------------------------------
Delaware Trustee
By:
--------------------------------
Name:
Title:
------------------------------------
[ ], as Administrative Trustee
[ ], as Administrative Trustee
------------------------------------
54
<PAGE>
EXHIBIT A
---------
CERTIFICATE OF TRUST
OF
LIBERTY FINANCIAL CAPITAL TRUST I
THIS Certificate of Trust of Liberty Financial Capital Trust I (the
"Trust"), dated as of September __, 1998, is being duly executed and filed by
the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust formed hereby is Liberty
Financial Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware
19890-0001, Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first-above written.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as trustee of
the Trust
By:
-------------------------------------
Name:
Title:
JAMES ANDREW HILBERT, not in his
individual capacity but solely as trustee
of the Trust
-------------------------------------------
A-1
<PAGE>
EXHIBIT B
---------
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: John C. Drennan
Re: Liberty Financial Capital Trust I ___% Trust Originated
Preferred Securities, Series A
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 Liberty
Financial Capital Trust I Preferred Securities, Series A (the "Preferred
Securities"), of Liberty Financial Capital Trust I, a Delaware business trust
(the "Issuer"), formed pursuant to a Trust Agreement, as amended and restated,
between Liberty Financial Companies, Inc. ("Liberty") and [State Street Bank and
Trust Company], as Property Trustee, [__________], as Delaware Trustee, and the
Administrative Trustees named therein. The payment of distributions on the
Preferred Securities, and payments due upon liquidation of Issuer or redemption
of the Preferred Securities, to the extent the Issuer has funds available for
the payment thereof are guaranteed by Liberty to the extent set forth in a
Guarantee Agreement dated ______________, ____ by Liberty with respect to the
Preferred Securities. Liberty and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated _____________, ____ by and among the Underwriters,
the Issuer and Liberty dated _____________, ____, and the Underwriters wish to
take delivery of the Preferred Securities through DTC. [State Street Bank and
Trust Company] 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, the Transfer Agent and Registrar and DTC agree among
each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about _________________, ___,
there shall be deposited with DTC one or more global certificates (individually
and collectively, the "Global Certificate") registered in the name of DTC's
Preferred Securities nominee, Cede & Co., representing an aggregate of
$__________ in liquidation amount of 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
B-1
<PAGE>
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE 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 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 at least 5
business days prior to the effective date of such event.
4. In the event of 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 (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.
B-2
<PAGE>
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 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 "Liberty
Financial Capital Trust I ____% Trust Originated Preferred Securities, Series
A."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in next day funds on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be made
payable to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice 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.
B-3
<PAGE>
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 Global
Certificates, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign 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 at least 90 days'
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 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. Nothing
herein shall be deemed to require the Transfer Agent and Registrar to advance
funds on behalf of Liberty Financial Capital Trust I.
Very truly yours,
LIBERTY FINANCIAL CAPITAL TRUST I
(As Issuer)
By:
-------------------------------------
B-4
<PAGE>
[STATE STREET BANK AND TRUST COMPANY]
(As Property Trustee)
By:
-------------------------------------
[STATE STREET BANK AND TRUST COMPANY]
(As Transfer Agent and Registrar)
By:
-------------------------------------
Name:
Title:
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:
-------------------------------------
Authorized Officer
B-5
<PAGE>
EXHIBIT C
---------
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number Of Common Securities
C-1
Certificate Evidencing Common Securities
of
LIBERTY FINANCIAL CAPITAL TRUST I
____% Common Securities
(Liquidation Amount $25 Per Common Security)
Liberty Financial Capital Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that Liberty
Financial Companies, Inc. (the "Holder"), is the registered owner of (____)
common securities of the Trust representing beneficial interests of the Trust
and designated the ____% Common Securities (Liquidation Amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 5.10 of the
Trust Agreement (as defined below), the Common Securities are not transferable
and any attempted transfer hereof 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
Trust dated as of ________________, ____, as the same may be amended from time
to time (the "Trust Agreement") including the designation of the terms of the
Common Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the 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.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this _______ day of _________________, ____.
LIBERTY FINANCIAL CAPITAL TRUST I
By:
-----------------------------------
Name:
Administrative Trustee
C-1
<PAGE>
EXHIBIT D
---------
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of _____________ ____, 1998, between Liberty Financial
Companies, Inc., a Massachusetts corporation ("Liberty"), and Liberty Financial
Capital Trust I, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from Liberty and to issue and sell
_______% Trust Originated Preferred Securities, Series A (the "Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust dated
as of ___________________, 1998 as the same may be amended from time to time
(the "Trust Agreement");
WHEREAS, Liberty will directly or indirectly own all of the Common
Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Liberty hereby agrees shall benefit Liberty
and which purchase Liberty acknowledges will be made in reliance upon the
execution and delivery of this Agreement, Liberty and Trust hereby agree as
follows:
ARTICLE I.
Section 1.1. Guarantee by Liberty.Subject to the terms and conditions
hereof, Liberty hereby irrevocably and unconditionally guarantees to each person
or entity to whom the 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 Trust, other than obligations of
the Trust to pay to Holders of any Preferred Securities or other similar
interests in the Trust the amounts due such Holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be. 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. 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 there are no
Beneficiaries remaining; provided, however, that this Agreement shall
D-1
<PAGE>
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 Liberty and [State Street
Bank and Trust Company] as guarantee trustee or under this Agreement for any
reason whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
Section 1.3. Waiver of Notice.
Liberty hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and Liberty hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
Section 1.4. No Impairment.
The obligations, covenants, agreements and duties of Liberty 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 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 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 Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, Liberty with respect to the happening of any of the
foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against Liberty and
Liberty waives any right or remedy to require that any action be brought against
the Trust or any other person or entity before proceeding against Liberty.
Section 1.6. Subrogation.
Liberty shall be subrogated to all (if any) rights of the Trust in respect
of any amounts paid to the Beneficiaries by Liberty under this Agreement;
provided, however, that Liberty shall
D-2
<PAGE>
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 Agreement, if, at the time of any such payment, any amounts
are due and unpaid under this Agreement.
ARTICLE II.
Section 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of Liberty and
shall inure to the benefit of the Beneficiaries.
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities of any
series 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.
Section 2.3. 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):
Liberty Financial Capital Trust I
c/o [State Street Bank and Trust Company]
[Address]
Facsimile No.:
Attention: Corporate Trust Department
Liberty Financial Companies, Inc.
600 Atlantic Avenue
24th Floor
Boston, Massachusetts 02210-2214
Facsimile No.: 617-___-____
Attention: __________
Section 2.4. Governing Law.
This agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
D-3
<PAGE>
This Agreement is executed as of the day and year first above written.
LIBERTY FINANCIAL COMPANIES, INC.
By:
--------------------------------
Name:
Administrative Trustee
LIBERTY FINANCIAL CAPITAL TRUST I
By:
--------------------------------
Name:
Administrative Trustee
D-4
<PAGE>
EXHIBIT E
---------
If the Preferred Security is to be a Global Certificate Insert -- This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York) to Liberty Financial
Capital Trust I or its agent for registration of transfer, exchange or payment,
and any Preferred Security issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein
Certificate Number Number of Preferred Securities
P-_______ Cusip No. _____.
Certificate Evidencing Preferred Securities
of
LIBERTY FINANCIAL CAPITAL TRUST I
_____% Trust Originated Preferred Securities,
Series A
(Liquidation Amount $25 Per Preferred Security)
Liberty Financial Capital Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that (the
"Holder") is the registered owner of (____) preferred securities of the Trust
representing an undivided beneficial interest in the assets of the Trust and
designated the Liberty Financial Capital Trust I _______% Trust Originated
Preferred Securities, Series A (Liquidation Amount $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 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
E-1
<PAGE>
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
Trust dated as of ______________, _____, as the same may be amended from time to
time (the "Trust Agreement") including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by Liberty Financial Companies, Inc., a
Massachusetts corporation, and [State Street Bank and Trust Company], as
guarantee trustee, dated as of ________________, 1998, (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the Holder without charge upon written request to the 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.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this ___ day of __________________,____.
LIBERTY FINANCIAL CAPITAL TRUST I
By:
--------------------------------
Name:
Administrative Trustee
E-2
<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 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-3
CERTIFICATE OF TRUST
OF
LIBERTY FINANCIAL CAPITAL TRUST II
THIS Certificate of Trust of Liberty Financial Capital Trust II (the
"Trust"), dated as of September 11, 1998, is being duly executed and filed by
the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust formed hereby is Liberty Financial
Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are Wilmington
Trust Company, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first-above written.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as trustee of the
Trust
By: /s/ Donald G. MacKelcan
----------------------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
JAMES ANDREW HILBERT, not in his individual
capacity but solely as trustee of the Trust
/s/ James Andrew Hilbert
--------------------------------------------------
TRUST AGREEMENT
OF
LIBERTY FINANCIAL CAPITAL TRUST II
THIS TRUST AGREEMENT is made as of September 11, 1998 (this "Trust
Agreement"), by and among Liberty Financial Companies, Inc., a Massachusetts
corporation, as Depositor (the "Depositor"), and Wilmington Trust Company, a
Delaware banking corporation, as trustee, and James Andrew Hilbert, as trustee
(jointly, the "Trustees"). The Depositor and the Trustees hereby agree as
follows:
1. The trust created hereby shall be known as "Liberty Financial Capital
Trust II" (the "Trust"), in which name the Trustees or the Depositor, to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. Such amount shall constitute the initial trust estate. It
is the intention of the parties hereto that the Trust created hereby constitute
a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.
ss. 3801, et seq. (the "Business Trust Act"), and that this document constitute
the governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in such form as the Trustees may approve.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement satisfactory to each such party to provide for the contemplated
operation of the Trust created hereby and the issuance of the Preferred or
Capital Securities and Common Securities referred to therein. Prior to the
execution and delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with respect of the
trust estate, except as otherwise required by applicable law or as may be
necessary to obtain prior to such execution and delivery any licenses, consents
or approvals required by applicable law or otherwise. Notwithstanding the
foregoing, the Trustees may take all actions deemed proper as are necessary to
effect the transactions contemplated herein.
4. The Depositor, as sponsor of the Trust, is hereby authorized, in its
discretion, (i) to prepare and file with the Securities and Exchange Commission
(the "Commission") and to execute, in the case of the 1933 Act Registration
Statement and 1934 Act Registration Statement (as herein defined), on behalf of
the Trust, (a) a Registration Statement (the "1933 Act Registration Statement"),
including all pre-effective and post-effective amendments thereto, relating to
the registration under the Securities Act of 1933, as amended (the "1933 Act"),
of the Preferred or Capital Securities of the Trust, (b) any preliminary
prospectus or prospectus or supplement thereto relating to the Preferred or
Capital Securities of the Trust required to be filed pursuant to the 1933 Act,
and (c) a Registration Statement on Form 8-A or other appropriate form (the
"1934 Act Registration Statement"), including all pre-effective and
post-effective amendments thereto, relating to the registration of the Preferred
or Capital Securities of the Trust under the Securities Exchange Act of 1934, as
amended; (ii) if and at such time as determined by the Depositor, to file with
the New York Stock Exchange or other exchange, or the National Association of
Securities Dealers ("NASD"), and execute on behalf of the Trust a listing
<PAGE>
application and all other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the Preferred or
Capital Securities of the Trust to be listed on the New York Stock Exchange or
such other exchange, or the NASD's Nasdaq National Market; (iii) to file and
execute on behalf of the Trust, such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents that shall be necessary or desirable to register the
Preferred or Capital Securities of the Trust under the securities or "Blue Sky"
laws of such jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable; (iv) to execute and deliver letters or documents to, or
instruments for filing with, a depository relating to the Preferred or Capital
Securities of the Trust; and (v) to execute, deliver and perform on behalf of
the Trust an underwriting agreement with one or more underwriters relating to
the offering of the Preferred or Capital Securities of the Trust.
In the event that any filing referred to in this Section 4 is required by
the rules and regulations of the Commission, the New York Stock Exchange or
other exchange, NASD, or state securities or "Blue Sky" laws to be executed on
behalf of the Trust by the Trustees, the Trustees, in their capacity as trustees
of the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Trustees, in their capacity as trustees of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, the New York
Stock Exchange or other exchange, NASD, or state securities or "Blue Sky" laws.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of trustees of the Trust initially shall be two and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Depositor which
may increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be a natural person who is a resident of the State of Delaware or,
if not a natural person, an entity which has its principal place of business in
the State of Delaware. Subject to the foregoing, the Depositor is entitled to
appoint or remove without cause any trustee of the Trust at any time. Any
trustee of the Trust may resign upon thirty days' prior notice to the Depositor.
7. The Depositor hereby agrees to (i) reimburse the Trustees for all
reasonable expenses (including reasonable fees and expenses of counsel and other
experts) and (ii) indemnify, defend and hold harmless the Trustees and any of
the officers, directors, employees and agents of the Trustees (the "Indemnified
Persons") from and against and all losses, damages, liabilities, claims,
actions, suits, costs, expenses, disbursements (including the reasonable fees
and expenses of counsel), taxes and penalties of any kind and nature whatsoever
(collectively, "Expenses"), to the extent that such Expenses arise out of or are
imposed upon or asserted at any time against such Indemnified Persons with
respect to the performance of this Trust Agreement, the creation, operation or
termination of the Trust or the transactions contemplated hereby; provided,
however, that the Depositor shall not be required to indemnify any Indemnified
Person
-2-
<PAGE>
for any Expenses which are a result of the willful misconduct, bad faith or
gross negligence of such Indemnified Person.
8. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws principles).
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
LIBERTY FINANCIAL COMPANIES, INC., as
Depositor
By: /s/ James Andrew Hilbert
---------------------------------
Name: James Andrew Hilbert
Title: Senior Vice President, Chief
Financial Officer and Treasurer
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
trustee of the Trust
By: /s/ Donald G. MacKelcan
---------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
JAMES ANDREW HILBERT, not in his
individual capacity but solely
as trustee of the Trust
/s/ James Andrew Hilbert
---------------------------------------
-3-
EXHIBIT 4.15
================================================================================
FORM OF
AMENDED AND RESTATED
TRUST AGREEMENT
among
LIBERTY FINANCIAL COMPANIES, INC., AS DEPOSITOR,
[STATE STREET BANK AND TRUST COMPANY]
AS PROPERTY TRUSTEE,
[__________________________________]
AS DELAWARE TRUSTEE,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF _________________, 1998
LIBERTY FINANCIAL CAPITAL TRUST II
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I.
<S> <C> <C>
DEFINED TERMS............................................................................................1
Section 1.1 Definitions............................................................................1
ARTICLE II.
ESTABLISHMENT OF THE TRUST..............................................................................10
Section 2.1 Name..................................................................................10
Section 2.2 Office of the Delaware Trustee; Principal Place of Business...........................10
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses.......................11
Section 2.4 Issuance of the Preferred Securities..................................................11
Section 2.5 Issuance of the Common Securities; Subscription and Purchase of
Debentures............................................................................11
Section 2.6 Declaration of Trust..................................................................12
Section 2.7 Authorization to Enter into Certain Transactions......................................12
Section 2.8 Assets of Trust.......................................................................16
Section 2.9 Title to Trust Property...............................................................16
ARTICLE III.
PAYMENT ACCOUNT.........................................................................................16
Section 3.1 Payment Account.......................................................................16
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION...............................................................................17
Section 4.1 Distributions.........................................................................17
Section 4.2 Redemption............................................................................17
Section 4.3 Subordination of Common Securities....................................................19
Section 4.4 Payment Procedures....................................................................20
Section 4.5 Tax Returns and Reports...............................................................20
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust...........................................21
Section 4.7 Payments under Indenture..............................................................21
ARTICLE V.
TRUST SECURITIES CERTIFICATES...........................................................................21
Section 5.1 Initial Ownership.....................................................................21
Section 5.2 The Trust Securities Certificates.....................................................21
<PAGE>
Section 5.3 Execution and Delivery of Trust Securities Certificates...............................21
Section 5.4 Registration of Transfer and Exchange of Preferred Securities.........................22
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates....................23
Section 5.6 Persons Deemed Securityholders........................................................23
Section 5.7 Access to List of Securityholders' Names and Addresses................................23
Section 5.8 Maintenance of Office or Agency.......................................................23
Section 5.9 Appointment of Paying Agent...........................................................24
Section 5.10 Ownership of Common Securities by Depositor...........................................24
Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities Certificate...........24
Section 5.12 Notices to Clearing Agency............................................................25
Section 5.13 Definitive Preferred Securities Certificates..........................................25
Section 5.14 Rights of Securityholders.............................................................26
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING...............................................................28
Section 6.1 Limitations on Voting Rights..........................................................28
Section 6.2 Notice of Meetings....................................................................29
Section 6.3 Meetings of Preferred Securityholders.................................................29
Section 6.4 Voting Rights.........................................................................30
Section 6.5 Proxies, etc..........................................................................30
Section 6.6 Securityholder Action by Written Consent..............................................30
Section 6.7 Record Date for Voting and Other Purposes.............................................30
Section 6.8 Acts of Securityholders...............................................................31
Section 6.9 Inspection of Records.................................................................32
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES..........................................................................32
Section 7.1 Representations and Warranties of the Bank, the Property Trustee and
the Delaware Trustee..................................................................32
Section 7.2 Representations and Warranties of Depositor...........................................33
ARTICLE VIII.
THE TRUSTEES............................................................................................34
Section 8.1 Certain Duties and Responsibilities...................................................34
Section 8.2 Certain Notices.......................................................................35
Section 8.3 Certain Rights of Property Trustee....................................................36
Section 8.4 Not Responsible for Recitals or Issuance of Securities................................38
Section 8.5 May Hold Securities...................................................................38
Section 8.6 Compensation; Indemnity; Fees.........................................................38
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees..........................39
Section 8.8 Conflicting Interests.................................................................40
Section 8.9 Co-Trustees and Separate Trustee......................................................40
<PAGE>
Section 8.10 Resignation and Removal; Appointment of Successor.....................................41
Section 8.11 Acceptance of Appointment by Successor................................................43
Section 8.12 Merger, Conversion, Consolidation or Succession to Business...........................44
Section 8.13 Preferential Collection of Claims Against Depositor or Trust..........................44
Section 8.14 Reports by Property Trustee...........................................................45
Section 8.15 Reports to the Property Trustee.......................................................45
Section 8.16 Evidence of Compliance with Conditions Precedent......................................45
Section 8.17 Number of Trustees....................................................................46
Section 8.18 Delegation of Power...................................................................46
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER.....................................................................47
Section 9.1 Termination Upon Expiration Date......................................................47
Section 9.2 Early Termination.....................................................................47
Section 9.3 Termination...........................................................................47
Section 9.4 Liquidation...........................................................................47
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the Trust...................49
ARTICLE X.
MISCELLANEOUS PROVISIONS................................................................................50
Section 10.1 Limitation of Rights of Securityholders...............................................50
Section 10.2 Amendment.............................................................................50
Section 10.3 Separability..........................................................................51
Section 10.4 Governing Law.........................................................................51
Section 10.5 Payments Due on Non-Business Day......................................................52
Section 10.6 Successors............................................................................52
Section 10.7 Headings..............................................................................52
Section 10.8 Reports, Notices and Demands..........................................................52
Section 10.9 Agreement Not to Petition.............................................................53
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act................................53
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and Indenture.......................54
</TABLE>
<PAGE>
LIBERTY FINANCIAL CAPITAL TRUST II
Certain Sections of this Trust Agreement Relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Trust Agreement
Act Section Section
- --------------- ----------------
<S> <C>
Section 310(a)(1)............................................................... 8.7
(a)(2).......................................................................... 8.7
(a)(3).......................................................................... 8.9
(a)(4).......................................................................... 2.7(a)(ii)
(b)............................................................................. 8.8
Section 311(A).................................................................. 8.13
(b)............................................................................. 8.13
Section 312(a).................................................................. 5.7
(b)............................................................................. 5.7
(c)............................................................................. 5.7
Section 313(a).................................................................. 8.14(a)
(a)(4).......................................................................... 8.14(b)
(b)............................................................................. 8.14(b)
(c)............................................................................. 10.8
(d)............................................................................. 8.14(c)
Section 314(a).................................................................. 8.15
(b)............................................................................. Not Applicable
(c)(1).......................................................................... 8.16
(c)(2).......................................................................... 8.16
(c)(3).......................................................................... Not Applicable
(d)............................................................................. Not Applicable
(e)............................................................................. 1.1, 8.16
Section 315(a).................................................................. 8.1(a), 8.3(a)
(b)............................................................................. 8.2, 10.8
(c)............................................................................. 8.1(a)
(d)............................................................................. 8.1, 8.3
(e)............................................................................. Not Applicable
Section 316(a).................................................................. Not Applicable
(a)(1)(A)....................................................................... Not Applicable
(a)(1)(B)....................................................................... Not Applicable
(a)(2).......................................................................... Not Applicable
(b)............................................................................. 5.14
(c)............................................................................. 6.7
Section 317 (a)(1).............................................................. Not Applicable
(a)(2).......................................................................... Not Applicable
(b)............................................................................. 5.9
Section 318(a).................................................................. 10.10
</TABLE>
- ---------------
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _________________, 1998,
among (i) Liberty Financial Companies, Inc., a Massachusetts corporation
(including any successors or assigns, the "Depositor"), (ii) State Street Bank
and Trust Company, a trust company duly organized and existing under the laws of
The Commonwealth of Massachusetts, as property trustee, (in each such capacity,
the "Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) [_________________________], a
Delaware corporation, as Delaware trustee (the "Delaware Trustee"), (iv)
[____________________________], an individual, and [_________________________],
an individual, each of whose address is c/o Liberty Financial Companies, Inc.,
600 Atlantic Avenue, Boston, Massachusetts 02210-2214 (each an "Administrative
Trustee" and collectively the "Administrative Trustees") (the Property Trustee,
the Delaware Trustee and the Administrative Trustees referred to collectively as
the "Trustees") and (v) the several Holders, as hereinafter defined.
W I T N E S S E T H :
WHEREAS, the Depositor and the Trustees have heretofore duly declared
and established a business trust pursuant to the Delaware Business Trust Act by
the entering into that certain Trust Agreement, dated as of _________________,
1998 (the "Original Trust Agreement"), and by the execution and filing by the
Trustees with the Secretary of State of the State of Delaware of the Certificate
of Trust, filed on ______________, 1998, attached as Exhibit A; and
WHEREAS, the Depositor and the 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 Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in the Debentures and
(iv) the appointment of the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amnds and restates the
Original Trust Agreement in its entirety and agrees as follows:
Article I.
DEFINED TERMS
Section 1.1 Definitions. 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;
<PAGE>
(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) 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 Trust Agreement; and
(d) the words "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 Debentures
for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrative Trustee" means each of [ ], and [ ], solely in such
Person's capacity as Administrative Trustee of the Trust formed and continued
hereunder and not in such Person's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor 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 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. "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 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief
2
<PAGE>
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 10.9.
"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 Directors, or such committee of the Board of
Directors or officers of the Company to which authority to act on behalf of the
Board of Directors has been delegated, and to be in full force and effect on the
date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.11.
"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
Debenture Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the
Trust, the Depositor and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, 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 Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the First Time of Delivery, which date is also
the date of execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to
3
<PAGE>
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
of the 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 as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee located in [Boston, Massachusetts].
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to
be redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debenture Tax Event" means a "Tax Event" as defined in the Indenture.
"Debenture Trustee" [State Street Bank and Trust Company, a trust
company organized under the laws of The Commonwealth of Massachusetts], and any
successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's
____% Junior Subordinated Deferrable Interest Debentures, Series ___, issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both
(as the context requires) of (a) Preferred Securities Certificates issued as
Book-Entry Preferred Securities Certificate as provided in Section 5.11(a) and
(b) Preferred Securities Certificates issued in certificated, fully registered
form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from time
to time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust formed and continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
4
<PAGE>
"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.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Property Trustee 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 Property Trustee 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 Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance or breach of which is dealt
with 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 defaulting Trustee or Trustees by the Holders of at least 25% in
aggregate liquidation preference 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; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property Trustee
within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the 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.
"First Time of Delivery" has the meaning specified in the Underwriting
Agreement.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and [State Street Bank and Trust Company], as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Preferred Securities, as amended from time to
time.
"Indenture" means the Junior Subordinated Indenture, dated as of
___________ 1, 1998,
5
<PAGE>
between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.
"Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an "investment company" that is required to be registered under
the 1940 Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities under 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 Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures 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, and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust
Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section
9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the President or
a Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary, of the
Depositor, and delivered to the appropriate Trustee. One of the officers signing
an Officers' Certificate given pursuant to Section 8.16 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of any thereof, and who shall be reasonably acceptable to the Property
Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Preferred Securities theretofore executed
and delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore cancelled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Preferred Securities; provided that, if
such Preferred Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided, however, that in
determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Preferred Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred Securities owned by
the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (i) in
determining whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Preferred Securities that such 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
Trustees and/or any such Affiliate. Preferred Securities so owned which 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
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to act with respect to such Preferred Securities and that the pledgee is not the
Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate 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 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Sections 4.1 and 4.2.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the
assets of the 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 as 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 commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder 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 that each Debenture Redemption Date and the stated maturity
of the Debentures 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
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the related amount of the premium, if any, paid by the Depositor upon the
concurrent redemption of a Like Amount of Debentures, allocated on a pro rata
basis (based on Liquidation Amounts) among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Second Time of Delivery" has the meaning specified in the
Underwriting Agreement.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Trust Securities is 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; provided, however, that in determining whether the
Holders of the requisite amount of Preferred Securities have voted on any matter
provided for in this Trust Agreement, then for the purpose of any such
determination, so long as Definitive Preferred Securities Certificates have not
been issued, the term Securityholders or Holders as used herein shall refer to
the Owners.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States Federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, will not be, deductible by the Depositor, in
whole or in part, for United States Federal income tax purposes or (iii) the
Trust is, or will be within 90 days after the date of such Opinion of Counsel,
subject to more than a de minimis amount of other taxes, duties, assessments or
other governmental charges.
"Time of Delivery" means, collectively, the First Time of Delivery and
the Second Time of Delivery.
"Trust" means the Delaware business trust created and continued hereby
and identified on the cover page to this Trust 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 all exhibits hereto, including, 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 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.
"Trust Property" means (a) the Debentures, (b) the rights of the
Property Trustee under the Guarantee, (c) any cash on deposit in, or owing to,
the Payment Account and (d) 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.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Pricing Agreement, dated as of
_____________, 1998, among the Trust, the Depositor and the underwriters named
therein incorporating the Underwriting Agreement dated ____________, 1998.
ARTICLE II.
ESTABLISHMENT OF THE TRUST
Section 2.1 Name.
The Trust continued hereby shall be known as "Liberty Financial Capital
Trust II," 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 Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.
Section 2.2 Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is c/o , or
such other address in the State of Delaware as the Delaware Trustee may
designate by written notice to the Securityholders and the Depositor. The
principal executive
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office of the Trust is c/o Liberty Financial Companies, Inc., 600 Atlantic
Avenue, Boston, Massachusetts 02210-2214.
Section 2.3 Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust 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 Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.4 Issuance of the Preferred Securities.
On ________________, ______ the Depositor, on behalf of the Trust and
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 Trust, shall
execute in accordance with Section 5.2 and deliver to the Underwriters named in
the Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of
Preferred Securities having an aggregate Liquidation Amount of
$__________________, against receipt of such aggregate purchase price of such
Preferred Securities of $_________________, which amount the Administrative
Trustee shall promptly deliver to the Property Trustee. If there is a Second
Time of Delivery, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Underwriters named in
the Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of up
to Preferred Securities having an aggregate Liquidation Amount of up to
$__________, against receipt of such aggregate purchase price of such Preferred
Securities of $____________, which amount such Administrative Trustees shall
promptly deliver to the Property Trustee, on the date specified pursuant to the
Underwriting Agreement.
Section 2.5 Issuance of the Common Securities; Subscription and Purchase of
Debentures.
Contemporaneously with the execution and delivery of this Trust Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 5.2 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of Common
Securities having an aggregate Liquidation Amount of $____________ against
payment by the Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Debentures, registered in the name of the Trust and having an
aggregate principal amount equal to $______________, and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the sum of $_____________. If there is a
Second Time of Delivery, an Administrative Trustee, on behalf
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of the Trust, shall execute in accordance with Section 5.2 and deliver to the
Depositor Common Securities Certificates, registered in the name of the
Depositor, in an aggregate amount of up to Common Securities having an aggregate
Liquidation Amount of up to $_______________ against payment by the Depositor of
such amount. Contemporaneously therewith, an Administrative Trustee, on behalf
of the Trust, shall subscribe to and purchase from the Depositor Debentures,
registered in the name of the Trust and having an aggregate principal amount of
up to $__________________, and, in satisfaction of the purchase price for such
Debentures, the Property Trustee, on behalf of the Trust, shall deliver to the
Depositor the amount received from one of the Administrative Trustees pursuant
to the last sentence of Section 2.4.
Section 2.6 Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures,
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Trust and the Securityholders. 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 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 Trust for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Business Trust Act.
Section 2.7 Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the 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 Trustees shall have the authority to enter into all
transactions and agreements determined by the Trustees to be appropriate in
exercising the authority, express or implied, otherwise granted to the Trustees
under this Trust Agreement, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have the
power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the 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 Trust;
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(C) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under 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 and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant
to the foregoing;
(E) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures to
the Securityholders 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) registering transfer of the Trust Securities in accordance
with this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to execute
on behalf of the Trust (either acting alone or together with any or
all of the 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
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
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(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of a
holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders 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 Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) after an Event of Default 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 Securityholders (without consideration of the
effect of any such action on any particular Securityholder); and
(J) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the 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 Securityholders,
except as expressly provided herein, (iii) take any action that would cause the
Trust to fail or cease to qualify as a "grantor trust" for United States Federal
income tax purposes, (iv) incur any indebtedness for borrowed money or issue any
other debt or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Administrative Trustees
shall defend all
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claims and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the Securityholders in
their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the 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 Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States 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 which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any
such States;
(iii) the preparation for filing by the Trust and execution on behalf
of the Trust of an 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 Trust with the Commission and
the execution on behalf of the Trust of a registration statement on Form
8-A relating to the registration of the 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 Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or taxed as a corporation for United States Federal income
tax purposes and so that the Debentures will be treated as indebtedness of the
Depositor for United States Federal income tax purposes. In this connection, the
Depositor and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable
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law, the Certificate of Trust or this Trust Agreement, that each of the
Depositor and the Administrative Trustees determines in their 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
Preferred Securities.
Section 2.8 Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
Section 2.9 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 for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
Section 3.1 Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee 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 Securityholders 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 Debentures. 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 4.1 Distributions.
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from _________________,
________________, and, except in the event that the Depositor exercises its
right to defer the payment of interest on the Debentures pursuant to the
Indenture, shall be payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing on _____________________, 1998. 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, payment of such Distribution shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date (each date on which distributions are payable in
accordance with this Section 4.1(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property, and, as a practical matter, the Distributions on the Trust
Securities shall be payable at a rate of _____% per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any full
period shall be computed on the basis of a 360-day year of twelve 30-day months.
The amount of Distributions for any partial period shall be computed on the
basis of the number of days elapsed in a 360-day year of twelve 30-day months.
The amount of Distributions payable for any period shall include the Additional
Amounts, if any.
(c) 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 Trust has funds then on hand and
available in the Payment Account for the payment of such Distributions.
(d) 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 on the relevant record date, which
shall be one Business Day prior to such Distribution Date; provided, however,
that in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
Section 4.2 Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of
the
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Debentures, the Trust 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 Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) 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 cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. 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 Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, [subject to Section 4.2(c),] the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form, irrevocably deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof.
If the Preferred Securities are no longer in book-entry-only form, the Property
Trustee, [subject to Section 4.2(c),] will irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and will give the
Paying Agent irrevocable instructions and authority to pay the Redemption Price
to the Holders thereof upon surrender of their 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 Register
for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
Securityholders holding Trust Securities so called for redemption will cease,
except the right of such Securityholders to receive the Redemption Price
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and any Distribution payable on or prior to the Redemption Date, but without
interest, and such Securities will cease to be outstanding. In the event that
any date on which any Redemption Price is payable is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay), except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on such
date. In the event that payment of the Redemption Price in respect of any Trust
Securities called for redemption is improperly withheld or refused and not paid
either by the Trust or by the Depositor pursuant to the Guarantee, Distributions
on such Trust Securities will continue to accrue, at the then applicable rate,
from the Redemption Date originally established by the 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.
(d) Payment of the Redemption Price on the Trust Securities shall be
made to the record holders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be one Business
Day prior to the relevant Redemption Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date fifteen days prior to the relevant
Redemption Date.
(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 on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not more
than 60 days prior to the Redemption Date by the Property Trustee from the
Outstanding Preferred Securities not previously called for redemption, by such
method (including, without limitation, by lot) as the Property Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or an integral multiple of $25 in excess thereof) of
the Liquidation Amount of Preferred Securities of a denomination larger than
$25. The Property Trustee shall promptly notify the Security 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 Liquidation
Amount of Preferred Securities that has been or is to be redeemed.
Section 4.3 Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price 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
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Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment of
any Distribution (including Additional Amounts, if applicable) on, or Redemption
Price of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions
(including Additional Amounts, if applicable) on all Outstanding 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, 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
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any 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 any such Event of Default under this Trust Agreement with
respect to the Preferred Securities has been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Preferred Securities and not the Holder of the Common Securities, and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee to act on their behalf.
Section 4.4 Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) 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, which shall credit the relevant Persons' accounts at such Clearing Agency
on the applicable distribution dates. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Common Securityholder.
Section 4.5 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
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
provided on such form. The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns and
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reports promptly after such filing or furnishing. The Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority.
Section 4.7 Payments under Indenture.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any corresponding
payment such Holder (and Owner) has directly received pursuant to Section 5.8 of
the Indenture.
Article V.
TRUST SECURITIES CERTIFICATES
Section 5.1 Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to 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 Trust.
Section 5.2 The Trust Securities Certificates.
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 Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the 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 Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.
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Section 5.3 Execution and Delivery of Trust Securities Certificates.
At each Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to or
upon the written order of the Depositor, signed by its chairman of the board,
its president, any executive vice president or any vice president, treasurer or
assistant treasurer or controller without further corporate action by the
Depositor, in authorized denominations.
Section 5.4 Registration of Transfer and Exchange of Preferred Securities
Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
registrar designated by the Depositor (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 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and 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 dated the date of execution by such Administrative Trustee or
Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the option of
a Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by an
Administrative 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 Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
maybe imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
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Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust 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 Trust 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 Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection with
the issuance of any new Trust Securities Certificate under this Section, 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 Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the assets of the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Trust Securities Certificate shall be found
at any time.
Section 5.6 Persons Deemed Securityholders.
The Administrative Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving distributions and for all other purposes whatsoever, and
neither the Trustees nor the Securities Registrar shall be bound by any notice
to the contrary.
Section 5.7 Access to List of Securityholders' Names and Addresses.
[Each Holder of a ?]Trust Securities Certificate, and each Owner shall be
deemed to have agreed not to hold the Depositor, the Property 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 5.8 Maintenance of Office or Agency.
The Administrative Trustees shall maintain 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 Trustees in respect of the Trust Securities Certificates may be served. The
Administrative Trustees initially designate Liberty Financial Companies, Inc.,
600 Atlantic Avenue, Boston, Massachusetts 02210-2214 Attn: __________, as its
principal corporate trust office for such purposes. The Administrative Trustees
shall give prompt written notice to the Depositor and to the Securityholders of
any change in the location of the Securities Register or any such office or
agency.
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Section 5.9 Appointment of Paying Agent.
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Bank, and any co-paying agent chosen by the Bank, and
acceptable to the Administrative Trustees and the Depositor. Any Person acting
as Paying Agent shall be permitted to resign as Paying Agent upon 30 days'
written notice to the Administrative Trustees, the Property Trustee and the
Depositor. In the event that the Bank 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 that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the 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 Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
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 5.10 Ownership of Common Securities by Depositor.
At each Time of Delivery, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than a transfer in connection with a consolidation or merger of
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, any attempted transfer of the
Common Securities shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 5.11 Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance,
will be issued
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in the form of a typewritten Preferred Securities Certificate or Certificates
representing Book-Entry Preferred Securities Certificates, to be delivered to
The Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Trust. Such Preferred Securities Certificate or Certificates shall initially
be registered on the Securities Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Owner will receive a Definitive Preferred
Securities Certificate representing such Owner's interest in such Preferred
Securities, except as provided in Section 5.13. Unless and until Definitive
Preferred Securities Certificates have been issued to Owners pursuant to Section
5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled
to deal with the Clearing Agency for all purposes of this Trust
Agreement relating to the Book-Entry Preferred Securities Certificates
(including the payment of the Liquidation Amount of and Distributions
on the Book-Entry Preferred Securities and the giving of instructions
or directions to Owners of Book-Entry Preferred Securities) as the
sole Holder of Book-Entry Preferred Securities and shall have no
obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the
provisions of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements
between such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless
and until Definitive Preferred Securities Certificates are issued
pursuant to Section 5.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and
receive and transmit payments on the Preferred Securities to such
Clearing Agency Participants.
(b) 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 5.12 Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
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Section 5.13 Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option advises
the Trustees in writing that it elects to terminate the book-entry system
through the Clearing Agency or (c) after the occurrence of a Debenture Event of
Default, Owners of Preferred Securities Certificates representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the Owners of
Preferred Securities Certificates, then the Administrative Trustee shall notify
the Clearing Agency and the Clearing Agency shall notify all Owners of Preferred
Securities Certificates and the other Trustees of the occurrence of any such
event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Administrative Trustees of the typewritten Preferred
Securities Certificate or Certificates representing the Book Entry Preferred
Securities Certificates 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. Neither the Securities Registrar nor the Trustees shall
be liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Preferred Securities Certificates, the Trustees shall
recognize the Holders of the Definitive Preferred Securities Certificates as
Securityholders. 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.
Section 5.14 Rights of Securityholders.
(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 Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the 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 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
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable by the 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
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Preferred Securities then
Outstanding shall have such right by a notice in writing
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to the Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable, provided that the payment of principal and
interest on such Debentures shall remain subordinated to the extent provided in
the Indenture.
At any time after such a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of a majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Debenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Depositor has paid or deposited with the Debenture Trustee a
sum sufficient to pay
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture)) on all of the
Debentures,
(B) the principal of (and premium, if any, on) any Debentures
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
and
(C) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee and the Property Trustee, their
agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other than
the non-payment of the principal of the Debentures which has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
The Holders of a majority in aggregate liquidation preference of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default under the Indenture, except a default in the
payment of principal or interest (unless such 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 Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debenture. No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which is represented by Book-Entry Preferred
Securities Certificates, 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.
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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, that, unless such declaration
of acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.14(b).
(c) For so long as any 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 Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Preferred 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 the
principal amount of or interest on Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holder (a "Direct
Action"). In connection with any such Direct Action, the rights of the Holders
of the Common Securities will be subrogated to the rights of any Holder of the
Preferred Securities to the extent of any payment made by the Depositor to such
Holder of Preferred Securities as a result of such Direct Action. Except as set
forth in Section 5.14(b) and (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 Debentures.
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.1 Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and
10.2 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 Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the
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principal of all the Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Preferred Securities, provided, however, that where a consent under
the Indenture would require the consent of each Holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior written consent of each Holder of Preferred Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of Preferred Securities, except by a subsequent vote of the Holders of Preferred
Securities. The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of default received from the Debenture Trustee with
respect to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Trustees shall, at the expense of the Depositor, obtain an Opinion
of Counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States Federal
income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the 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 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 Outstanding 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, the Trust would cause the Trust to fail
or cause to be classified as a grantor trust for United States Federal income
tax purposes.
Section 6.2 Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Section 6.3 Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
record of 25% of the Preferred Securities (based upon their Liquidation Amount)
and the Administrative Trustees or the Property Trustee may, at anytime in their
discretion, call a meeting of Preferred Securityholders to vote on any matters
as to which Preferred Securityholders are entitled to vote.
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Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount)held
by the Preferred Securityholders of record present, either in person or by
proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
Section 6.4 Voting Rights.
Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
Section 6.5 Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the 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 Securityholders 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 Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
Section 6.6 Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to the
action in writing.
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Section 6.7 Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any distribution on the 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 Securityholders or the
payment of a distribution or other action, as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes
Section 6.8 Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made or
taken by Securityholders or Owners may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Securityholders
or Owners in person or by an agent duly appointed in writing; and, except as
otherwise expressly provided herein, such action shall become effective when
such instrument or instruments are delivered to 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 Securityholders or
Owners signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 8.1) conclusive in favor
of the 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 his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder 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 Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder 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
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of which may do so pursuant to such appointment with regard to all or any part
of such liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any person or entity.
Section 6.9 Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by Securityholders
during normal business hours for any purpose reasonably related to such
Securityholder's interest as a Securityholder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties of the Bank, 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 Securityholders that:
(a) the Property Trustee is a [trust company] duly organized, validly
existing and in good standing under the laws of [The Commonwealth of
Massachusetts];
(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 corporation duly organized,
validly existing and in good standing in the State of Delaware;
(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;
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(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, (ii) 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 (iii) violate any 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 or therein 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 Federal law governing the banking, trust or general powers of the
Property Trustee or the Delaware Trustee, as the case may be, under the laws of
the United States or the State of Delaware;
(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 which,
individually or in the aggregate, would materially and adversely affect the
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 7.2 Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that (a) the Trust Securities Certificates issued at each Time
of Delivery on behalf of the Trust have been duly authorized and will have been,
duly and validly executed, issued and delivered by the Trustees pursuant to the
terms and provisions of, and in accordance with the requirements of, this
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Trust Agreement and the Securityholders 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 Trust (or the Trustees on behalf of the 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, as the case may be, of this Trust Agreement.
ARTICLE VIII.
THE TRUSTEES
Section 8.1 Certain Duties and Responsibilities.
(a) The duties and responsibilities of the 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 the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if 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 conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section.
Nothing in this Trust Agreement shall be construed to release the Property
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct. To the extent that, at law or in equity,
an Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, such
Administrative Trustee shall not be liable to the Trustor to any Securityholder
for such 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 Administrative Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative 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
Securityholder, 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 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 Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
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(c) 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 willful misconduct, except that:
(i) 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;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a majority in
Liquidation Amount of the Trust 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;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures 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;
(iv) 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; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
Section 8.2 Certain Notices.
Within five Business 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 10.8, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
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 Debentures
pursuant to the Indenture, the
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Administrative Trustee shall transmit, in the manner and to the extent provided
in Section 10.8, notice of such exercise to the Securityholders and the Property
Trustee, unless such exercise shall have been revoked.
Section 8.3 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 or
(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 Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor 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 reasonably shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Depositor or
the Administrative Trustees;
(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
rerecording, refiling or reregistration thereof;
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(f) the Property Trustee may consult with counsel (which counsel may
be counsel to 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, such counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees; the Property Trustee shall
have the right at any time to seek instructions concerning the administration of
this 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 Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(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 Securityholders, 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 or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney 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 of the Trust Securities
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; and
(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.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation
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on the Property Trustee to perform any act or acts or exercise any right, power,
duty or obligation conferred or imposed on it, in any jurisdiction in which it
shall be illegal, or in which the Property Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to the Property Trustee shall be construed to be a duty.
Section 8.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
Section 8.5 May Hold Securities.
Except as provided in the definition of the term "Outstanding" in Article
I, any Trustee or any other agent of any Trustee or the 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, may otherwise deal with the Trust with the
same rights it would have if it were not a Trustee or such other agent.
Section 8.6 Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (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
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (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
(c) to the fullest extent permitted by applicable law, to indemnify
and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust or its Affiliates,
(referred to herein as an "Indemnified Person") from and against any loss,
damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no
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Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(d) to the fullest extent permitted by applicable law, to advance
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt by the Depositor of (i) a written affirmation by or on behalf of the
Indemnified Person of its or his good faith belief that it or he has met the
standard of conduct set forth in this Section 8.6 and (ii) an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in the preceding subsection.
The provisions of this Section 8.6 shall survive the termination of this
Trust Agreement.
No Trustee may claim any lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 8.6.
The Depositor and any Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Trust Securities shall have no rights by virtue of this Trust
Agreement in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. Neither the
Depositor, nor any Trustee, shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and the
Depositor or any Trustee shall have the right to take for its own
account(individually or as a partner or fiduciary) or to recommend to others any
such particular investment or other opportunity. Any Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, or may act as depository for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Depositor or its Affiliates.
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees.
(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
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, 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, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
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(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 that shall act
through one or more persons authorized to bind such entity.
Section 8.8 Conflicting Interests.
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.
Section 8.9 Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
anytime 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, by agreed
action of the majority of such Trustees, shall have 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. If the Depositor does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case a Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment. Any co-trustee or
separate trustee appointed pursuant to this Section 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.
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.
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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 and delivered 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 Trustees specified hereunder, shall be exercised,
solely by such Trustees 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.
(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, and, in case a Debenture 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
resigned or removed may be appointed in the manner provided in this Section.
(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 Trustee (the "Relevant 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 8.11.
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Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time by giving written notice thereof to the Securityholders. If
the instrument of acceptance by the successor Trustee required by Section 8.11
shall not have been delivered to the Relevant Trustee within 30 days after the
giving of such notice of resignation, the Relevant Trustee may petition, at the
expense of the Trust, any court of competent jurisdiction for the appointment of
a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If a
Debenture 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 a majority in Liquidation Amount of the Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any cause,
at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees, and the retiring 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 Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders, by
Act of the Securityholders 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
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 Debenture Event of Default shall have
occurred and be continuing, the Common Securityholder by Act of the Common
Securityholder delivered to the Administrative Trustee shall promptly appoint a
successor Administrative Trustee or Administrative Trustees and such successor
Administrative Trustee or Trustees shall comply with the applicable requirements
of Section 8.11. If no successor Relevant Trustee shall have been so appointed
by the Common Securityholder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder who has
been a Securityholder of Trust 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 Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all Securityholders
in the manner provided in Section 10.8 and shall give notice to the Depositor.
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.
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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 Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of 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).
Section 8.11 Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee such successor
Trustee so appointed shall execute, acknowledge and deliver to the Trust 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 Depositor 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 if the Property Trustee is the resigning Trustee shall duly
assign, transfer and deliver to the successor Trustee all property and money
held by such retiring Property Trustee hereunder.
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 (a)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 Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees 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 Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall 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 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 first or second preceding paragraph, as the case may be.
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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 8.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee
maybe merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant 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.
Section 8.13 Preferential Collection of Claims Against Depositor or Trust.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities (or, if the
Trust Securities are Discount Securities, such portion of the liquidation amount
as may be specified in the terms of such 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
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to authorize the Property Trustee to vote in respect of the claim of any Holder
in any such proceeding.
Section 8.14 Reports by Property Trustee.
(a) Not later than July 15 of each year commencing with July 15, 1999,
the Property Trustee shall transmit to all Securityholders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of such December 31
with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to
the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with all
of its obligations under this Trust Agreement during the twelve-month
period (or, in the case of the initial report, the period since the
Closing Date) ending with such December 31 or, if the Property Trustee
has not complied in any material respect with such obligations, a
description of such noncompliance; and
(iii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its
opinion materially affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders
such 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, with the Commission and with the Depositor.
Section 8.15 Reports to the Property Trustee.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(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.
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Section 8.16 Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this 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 8.17 Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, 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 8.18 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 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, as set forth herein.
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ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
Section 9.1 Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2053 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
Section 9.2 Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from the Depositor
at any time (which direction is optional and wholly within the discretion of the
Depositor) to terminate the Trust and distribute Debentures to Securityholders
in exchange for the Preferred Securities;
(c) the redemption of all of the Preferred Securities in connection
with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 9.3 Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the 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 Trust or
the Securityholders.
Section 9.4 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 Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid mailed not later than 30 nor more
than 60
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days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All 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 Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Administrative Trustees or 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 Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust 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 Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall use its reasonable efforts to have the Debentures listed on
the New York Stock Exchange or on such other exchange, interdealer quotation
system or self-regulatory organization as the Preferred Securities are then
listed, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on which
a Distribution was made on such Trust 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 Trust Securities
Certificates with respect to such Debentures) and (v) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, 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 Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for
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distribution to Securityholders, after satisfaction of liabilities to creditors
of the 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 dissolution, winding up or termination, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the 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 dissolution, winding-up or termination pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a Debenture
Event of Default has occurred and is continuing, the Preferred Securities shall
have a priority over the Common Securities.
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The 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 corporation or other body, except pursuant
to this Section 9.5. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, the 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 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 rank
the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii) the
Depositor expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Debentures,
(iii) the Successor Securities are listed or traded, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or other organization on which the Preferred Securities are then listed
or traded, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Preferred Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
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 Trust nor such successor entity will
be required to register as an investment company under the 1940
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Act and (viii) the Depositor owns all of the Common Securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount 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 entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the successor entity to be classified
as other than a grantor trust for United States Federal income tax purposes.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.1 Limitation of Rights of Securityholders.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or any
Securityholder for such person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
Section 10.2 Amendment.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, the Administrative Trustees and the Depositor, without the
consent of any Securityholders, (i) to cure any ambiguity, correct or supplement
any provision herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this 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 Trust will be classified for United States Federal income tax
purposes as a grantor trust at all times that any Trust Securities are
outstanding or to ensure that the Trust will not be required to register as an
investment company under the 1940 Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Trustees and the Depositor with (i)
the consent of Trust Securityholders representing not less than a majority
(based upon Liquidation Amounts) of the Trust Securities then Outstanding and
(ii)receipt by the Trustees of an Opinion of Counsel to the
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effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States Federal income tax purposes or the Trust's
exemption from status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.3 or 6.6 hereof), 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 Securityholder to institute suit
for the enforcement of any such payment on or after such date; notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee 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.
Section 10.3 Separability.
In case any provision in this Trust Agreement or in the Trust 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 10.4 Governing Law.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust Agreement
and the Trust Securities shall be
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construed in accordance with and governed by the laws of the State of Delaware.
Section 10.5 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 maybe
made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
Section 10.6 Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee, including
any successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under Article Eight 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 10.7 Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
Section 10.8 Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder 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
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Liberty Financial
Companies, Inc., 600 Atlantic Avenue, Boston, Massachusetts 02210-2214,
Attention: ____________, facsimile no.: 617-___-_____. Any notice to Preferred
Securityholders shall also be given to such owners as have, within two years
preceding the giving of such notice, filed their names and addresses with the
Property Trustee for that purpose. Such notice, demand or other communication to
or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property
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Trustee to [State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110]; (b) with respect to the Delaware Trustee, to [ ]; and (c)
with respect to the Administrative Trustees, to them at the address above for
notices to the Depositor, marked "Attention Administrative Trustees of Liberty
Financial Capital Trust II." Such notice, demand or other communication to or
upon the Trust or the Property Trustee shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Trust or the
Property Trustee.
Section 10.9 Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, 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 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 stopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
Section 10.10 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.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision 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.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
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Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
LIBERTY FINANCIAL COMPANIES, INC.
By:
---------------------------------------
Name:
Title:
[STATE STREET BANK AND TRUST
COMPANY], as Property Trustee
By:
---------------------------------------
Name:
Title:
[ ], as
---------------------------------------
Delaware Trustee
By:
---------------------------------------
Name:
Title:
--------------------------------------------
[ ], as Administrative Trustee
--------------------------------------------
[ ], as Administrative Trustee
54
<PAGE>
EXHIBIT A
---------
CERTIFICATE OF TRUST
OF
LIBERTY FINANCIAL CAPITAL TRUST II
THIS Certificate of Trust of Liberty Financial Capital Trust II (the
"Trust"), dated as of September __, 1998, is being duly executed and filed by
the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. ss. 3801, et seq.).
1. Name. The name of the business trust formed hereby is Liberty Financial
Capital Trust II.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are Wilmington
Trust Company, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first-above written.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
trustee of the Trust
By:
-------------------------------
Name:
Title:
JAMES ANDREW HILBERT, not in his
individual capacity but solely as
trustee of the Trust
-------------------------------------
A-1
<PAGE>
EXHIBIT B
---------
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: John C. Drennan
Re: Liberty Financial Capital Trust II ___% Trust Originated
Preferred Securities, Series A
---------------------------------------------------------
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 Liberty
Financial Capital Trust II Preferred Securities, Series A (the "Preferred
Securities"), of Liberty Financial Capital Trust II, a Delaware business trust
(the "Issuer"), formed pursuant to a Trust Agreement, as amended and restated,
between Liberty Financial Companies, Inc. ("Liberty") and [State Street Bank and
Trust Company], as Property Trustee, [__________], as Delaware Trustee, and the
Administrative Trustees named therein. The payment of distributions on the
Preferred Securities, and payments due upon liquidation of Issuer or redemption
of the Preferred Securities, to the extent the Issuer has funds available for
the payment thereof are guaranteed by Liberty to the extent set forth in a
Guarantee Agreement dated ______________, ____ by Liberty with respect to the
Preferred Securities. Liberty and the Issuer propose to sell the Preferred
Securities to certain Underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated _____________, ____ by and among the Underwriters,
the Issuer and Liberty dated _____________, ____, and the Underwriters wish to
take delivery of the Preferred Securities through DTC. [State Street Bank and
Trust Company] 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, the Transfer Agent and Registrar and DTC agree among
each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about _________________, ___,
there shall be deposited with DTC one or more global certificates (individually
and collectively, the "Global Certificate") registered in the name of DTC's
Preferred Securities nominee, Cede & Co., representing an aggregate of
$__________ in liquidation amount of 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
B-1
<PAGE>
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE 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 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 at least 5
business days prior to the effective date of such event.
4. In the event of 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 (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.
B-2
<PAGE>
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 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 "Liberty
Financial Capital Trust II ____% Trust Originated Preferred Securities, Series
A."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DTC, or its registered assigns in next day funds on
each payment date (or in accordance with existing arrangements between the
Issuer or the Transfer Agent and Registrar and DTC). Such payments shall be made
payable to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice 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.
B-3
<PAGE>
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 Global
Certificates, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign 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 at least 90 days'
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 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. Nothing
herein shall be deemed to require the Transfer Agent and Registrar to advance
funds on behalf of Liberty Financial Capital Trust II.
Very truly yours,
LIBERTY FINANCIAL CAPITAL TRUST II
(As Issuer)
By:
-----------------------------------------
B-4
<PAGE>
[STATE STREET BANK AND TRUST COMPANY]
(As Property Trustee)
By:
----------------------------------------
[STATE STREET BANK AND TRUST COMPANY]
(As Transfer Agent and Registrar)
By:
--------------------------------------
Name:
Title:
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:
-------------------------------------
Authorized Officer
B-5
<PAGE>
EXHIBIT C
---------
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number Of Common Securities
C-1
Certificate Evidencing Common Securities
of
LIBERTY FINANCIAL CAPITAL TRUST II
____% Common Securities
(Liquidation Amount $25 Per Common Security)
Liberty Financial Capital Trust II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Liberty Financial Companies, Inc. (the "Holder"), is the registered owner of
(____) common securities of the Trust representing beneficial interests of the
Trust and designated the ____% Common Securities (Liquidation Amount $25 per
Common Security) (the "Common Securities"). In accordance with Section 5.10 of
the Trust Agreement (as defined below), the Common Securities are not
transferable and any attempted transfer hereof 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
Trust dated as of ________________, ____, as the same may be amended from time
to time (the "Trust Agreement") including the designation of the terms of the
Common Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the 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.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this _______ day of _________________, ____.
LIBERTY FINANCIAL CAPITAL TRUST II
By:___________________________
Name:
Administrative Trustee
C-1
<PAGE>
EXHIBIT D
---------
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of _____________ ____, 1998, between Liberty
Financial Companies, Inc., a Massachusetts corporation ("Liberty"), and Liberty
Financial Capital Trust II, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from Liberty and to issue and sell
_______% Trust Originated Preferred Securities, Series A (the "Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust dated
as of ___________________, 1998 as the same may be amended from time to time
(the "Trust Agreement");
WHEREAS, Liberty will directly or indirectly own all of the Common
Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Liberty hereby agrees shall benefit Liberty
and which purchase Liberty acknowledges will be made in reliance upon the
execution and delivery of this Agreement, Liberty and Trust hereby agree as
follows:
ARTICLE I.
Section 1.1. Guarantee by Liberty.Subject to the terms and conditions
hereof, Liberty hereby irrevocably and unconditionally guarantees to each person
or entity to whom the 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 Trust, other than obligations of
the Trust to pay to Holders of any Preferred Securities or other similar
interests in the Trust the amounts due such Holders pursuant to the terms of the
Preferred Securities or such other similar interests, as the case may be. 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. 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 there
are no Beneficiaries remaining; provided, however, that this Agreement shall
D-1
<PAGE>
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 Liberty and [State Street Bank and
Trust Company] as guarantee trustee or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
Section 1.3. Waiver of Notice.
Liberty hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and Liberty hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
Section 1.4. No Impairment.
The obligations, covenants, agreements and duties of Liberty 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 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 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 Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, Liberty with respect to the happening of any of the
foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against Liberty and
Liberty waives any right or remedy to require that any action be brought against
the Trust or any other person or entity before proceeding against Liberty.
Section 1.6. Subrogation.
Liberty shall be subrogated to all (if any) rights of the Trust in
respect of any amounts paid to the Beneficiaries by Liberty under this
Agreement; provided, however, that Liberty shall
D-2
<PAGE>
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 Agreement, if, at the time of any such payment, any amounts
are due and unpaid under this Agreement.
ARTICLE II.
Section 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of Liberty and
shall inure to the benefit of the Beneficiaries.
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities of
any series 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.
Section 2.3. 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):
Liberty Financial Capital Trust II
c/o [State Street Bank and Trust Company]
[Address]
Facsimile No.:
Attention: Corporate Trust Department
Liberty Financial Companies, Inc.
600 Atlantic Avenue
24th Floor
Boston, Massachusetts 02210-2214
Facsimile No.: 617-___-____
Attention: __________
Section 2.4. Governing Law.
This agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York.
D-3
<PAGE>
This Agreement is executed as of the day and year first above written.
LIBERTY FINANCIAL COMPANIES, INC.
By:
--------------------------------------
Name:
Administrative Trustee
LIBERTY FINANCIAL CAPITAL TRUST II
By:
--------------------------------------
Name:
Administrative Trustee
D-4
<PAGE>
EXHIBIT E
---------
If the Preferred Security is to be a Global Certificate Insert -- This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
Liberty Financial Capital Trust II or its agent for registration of transfer,
exchange or payment, and any Preferred Security issued is registered in the name
of Cede & Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein
Certificate Number Number of Preferred Securities
P-_______ Cusip No. _____.
Certificate Evidencing Preferred Securities
of
LIBERTY FINANCIAL CAPITAL TRUST II
_____% Trust Originated Preferred Securities,
Series A
(Liquidation Amount $25 Per Preferred Security)
Liberty Financial Capital Trust II, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of (____) preferred securities of the
Trust representing an undivided beneficial interest in the assets of the Trust
and designated the Liberty Financial Capital Trust II _______% Trust Originated
Preferred Securities, Series A (Liquidation Amount $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 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
E-1
<PAGE>
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 Trust dated
as of ______________, _____, as the same may be amended from time to time (the
"Trust Agreement") including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement entered into by Liberty Financial Companies, Inc., a
Massachusetts corporation, and [State Street Bank and Trust Company], as
guarantee trustee, dated as of ________________, 1998, (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the Holder without charge upon written request to the 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.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this ___ day of __________________,____.
LIBERTY FINANCIAL CAPITAL TRUST II
By:
--------------------------------------
Name:
Administrative Trustee
E-2
<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 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-3
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Liberty Financial
Companies, Inc. and to the incorporation by reference therein of our report
dated February 3, 1998, with respect to the 1996 and 1997 consolidated financial
statements of Liberty Financial Companies, Inc. incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1997 and the related
schedules included therein, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
Boston, Massachusetts
September 11, 1998
Exhibit 23.2
Consent of Independent Auditors
The Board of Directors
Liberty Financial Companies, Inc.:
We consent to the use of our reports included herein and incorporated by
reference and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Boston, Massachusetts
September 11, 1998
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Liberty Financial Companies, Inc.
(Exact name of obligor as specified in its charter)
MASSACHUSETTS 04-3260640
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(617) 722-6000
% Senior Debt Securities
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission
as Exhibit 1 to Amendment No. 1 to the Statement of Eligibility
and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 11th day of September, 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
--------------------------------------
Paul D. Allen
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Liberty
Financial Companies, Inc. of its % Senior Debt Securities, we hereby consent
that reports of examination by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
--------------------------------------
Paul D. Allen
Vice President
Dated: September 11, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business June 30, 1998, published
in accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section
22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................. 1,553,703
Interest-bearing balances .......................................... 12,440,716
Securities .................................................................. 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................ 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income ......... 6,633,608
Allowance for loan and lease losses .............. 92,999
Allocated transfer risk reserve................... 0
Loans and leases, net of unearned income and allowances ............ 6,540,609
Assets held in trading accounts ............................................. 1,267,679
Premises and fixed assets ................................................... 491,928
Other real estate owned ..................................................... 100
Investments in unconsolidated subsidiaries .................................. 1,278
Customers' liability to this bank on acceptances outstanding................. 68,312
Intangible assets ........................................................... 231,294
Other assets................................................................. 1,667,282
Total assets ................................................................ 42,484,392
==============
LIABILITIES
Deposits:
In domestic offices ................................................ 12,553,371
Noninterest-bearing ..................... 10,204,405
Interest-bearing ........................ 2,348,966
In foreign offices and Edge subsidiary ............................. 16,961,571
Noninterest-bearing ..................... 154,792
Interest-bearing ........................ 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................ 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 0
Trading liabilities.......................................................... 883,096
Other borrowed money ........................................................ 361,141
Subordinated notes and debentures............................................ 0
Bank's liability on acceptances executed and outstanding .................... 68,289
Other liabilities ........................................................... 1,017,284
Total liabilities ........................................................... 40,027,546
--------------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common stock ................................................................ 29,931
Surplus ..................................................................... 455,288
Undivided profits and capital reserves/Net unrealized holding gains (losses). 1,964,924
Net unrealized holding gains (losses) on available-for-sale securities....... 15,557
Cumulative foreign currency translation adjustments ......................... (8,854)
Total equity capital ........................................................ 2,456,846
--------------
Total liabilities and equity capital ........................................ 42,484,392
--------------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
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 Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Liberty Financial Companies, Inc.
(Exact name of obligor as specified in its charter)
MASSACHUSETTS 04-3260640
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(617) 722-6000
% Junior Subordinated Debt Securities
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 11th day of September, 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
-----------------------------------------
Paul D. Allen
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Liberty
Financial Companies, Inc. of its % Junior Subordinated Debt Securities, we
hereby consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
-------------------------------------
Paul D. Allen
Vice President
Dated: September 11, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business June 30, 1998, published
in accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section
22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................. 1,553,703
Interest-bearing balances .......................................... 12,440,716
Securities .................................................................. 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................ 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income ......... 6,633,608
Allowance for loan and lease losses .............. 92,999
Allocated transfer risk reserve................... 0
Loans and leases, net of unearned income and allowances ............ 6,540,609
Assets held in trading accounts ............................................. 1,267,679
Premises and fixed assets ................................................... 491,928
Other real estate owned ..................................................... 100
Investments in unconsolidated subsidiaries .................................. 1,278
Customers' liability to this bank on acceptances outstanding................. 68,312
Intangible assets ........................................................... 231,294
Other assets................................................................. 1,667,282
Total assets ................................................................ 42,484,392
==============
LIABILITIES
Deposits:
In domestic offices ................................................ 12,553,371
Noninterest-bearing ..................... 10,204,405
Interest-bearing ........................ 2,348,966
In foreign offices and Edge subsidiary ............................. 16,961,571
Noninterest-bearing ..................... 154,792
Interest-bearing ........................ 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................ 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 0
Trading liabilities.......................................................... 883,096
Other borrowed money ........................................................ 361,141
Subordinated notes and debentures............................................ 0
Bank's liability on acceptances executed and outstanding .................... 68,289
Other liabilities ........................................................... 1,017,284
Total liabilities ........................................................... 40,027,546
--------------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common stock ................................................................ 29,931
Surplus ..................................................................... 455,288
Undivided profits and capital reserves/Net unrealized holding gains (losses). 1,964,924
Net unrealized holding gains (losses) on available-for-sale securities....... 15,557
Cumulative foreign currency translation adjustments ......................... (8,854)
Total equity capital ........................................................ 2,456,846
--------------
Total liabilities and equity capital ........................................ 42,484,392
--------------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
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 Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Liberty Financial Capital Trust I
(Exact name of obligor as specified in its charter)
MASSACHUSETTS XX-XXXXXXX
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(617) 722-6000
Preferred Securities
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 11th day of September, 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
----------------------------------------
Paul D. Allen
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Liberty
Financial Capital Trust I of its Preferred Securities, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
------------------------------------
Paul D. Allen
Vice President
Dated: September 11, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business June 30, 1998, published
in accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section
22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................. 1,553,703
Interest-bearing balances .......................................... 12,440,716
Securities................................................................... 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................ 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 6,633,608
Allowance for loan and lease losses ................. 92,999
Allocated transfer risk reserve...................... 0
Loans and leases, net of unearned income and allowances ............ 6,540,609
Assets held in trading accounts ............................................. 1,267,679
Premises and fixed assets ................................................... 491,928
Other real estate owned ..................................................... 100
Investments in unconsolidated subsidiaries .................................. 1,278
Customers' liability to this bank on acceptances outstanding ................ 68,312
Intangible assets ........................................................... 231,294
Other assets................................................................. 1,667,282
Total assets ................................................................ 42,484,392
==============
LIABILITIES
Deposits:
In domestic offices................................................. 12,553,371
Noninterest-bearing ........................ 10,204,405
Interest-bearing ........................... 2,348,966
In foreign offices and Edge subsidiary ............................. 16,961,571
Noninterest-bearing ........................ 154,792
Interest-bearing ........................... 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................ 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 0
Trading liabilities.......................................................... 883,096
Other borrowed money ........................................................ 361,141
Subordinated notes and debentures ........................................... 0
Bank's liability on acceptances executed and outstanding .................... 68,289
Other liabilities ........................................................... 1,017,284
Total liabilities ........................................................... 40,027,546
--------------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common stock ................................................................ 29,931
Surplus ..................................................................... 455,288
Undivided profits and capital reserves/Net unrealized holding gains (losses). 1,964,924
Net unrealized holding gains (losses) on available-for-sale securities ...... 15,557
Cumulative foreign currency translation adjustments ......................... (8,854)
Total equity capital ........................................................ 2,456,846
--------------
Total liabilities and equity capital ........................................ 42,484,392
--------------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
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 Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Liberty Financial Capital Trust II
(Exact name of obligor as specified in its charter)
MASSACHUSETTS XX-XXXXXXX
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(617) 722-6000
Preferred Securities
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 11th day of September, 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
----------------------------------------
Paul D. Allen
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Liberty
Financial Capital Trust II of its Preferred Securities, we hereby consent that
reports of examination by Federal, State, Territorial or District authorities
may be furnished by such authorities to the Securities and Exchange Commission
upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
------------------------------------------
Paul D. Allen
Vice President
Dated: September 11, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business June 30, 1998, published
in accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section
22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................. 1,553,703
Interest-bearing balances .......................................... 12,440,716
Securities................................................................... 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................ 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 6,633,608
Allowance for loan and lease losses ................. 92,999
Allocated transfer risk reserve...................... 0
Loans and leases, net of unearned income and allowances ............ 6,540,609
Assets held in trading accounts ............................................. 1,267,679
Premises and fixed assets ................................................... 491,928
Other real estate owned ..................................................... 100
Investments in unconsolidated subsidiaries .................................. 1,278
Customers' liability to this bank on acceptances outstanding ................ 68,312
Intangible assets ........................................................... 231,294
Other assets................................................................. 1,667,282
Total assets ................................................................ 42,484,392
==============
LIABILITIES
Deposits:
In domestic offices................................................. 12,553,371
Noninterest-bearing ........................ 10,204,405
Interest-bearing ........................... 2,348,966
In foreign offices and Edge subsidiary ............................. 16,961,571
Noninterest-bearing ........................ 154,792
Interest-bearing ........................... 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................ 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 0
Trading liabilities.......................................................... 883,096
Other borrowed money ........................................................ 361,141
Subordinated notes and debentures ........................................... 0
Bank's liability on acceptances executed and outstanding .................... 68,289
Other liabilities ........................................................... 1,017,284
Total liabilities ........................................................... 40,027,546
--------------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common stock ................................................................ 29,931
Surplus ..................................................................... 455,288
Undivided profits and capital reserves/Net unrealized holding gains (losses). 1,964,924
Net unrealized holding gains (losses) on available-for-sale securities ...... 15,557
Cumulative foreign currency translation adjustments ......................... (8,854)
Total equity capital ........................................................ 2,456,846
--------------
Total liabilities and equity capital ........................................ 42,484,392
--------------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
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 Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Liberty Financial Companies, Inc.
(Exact name of obligor as specified in its charter)
MASSACHUSETTS 04-3260640
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(617) 722-6000
Guarantee relating to certain obligations of
Liberty Capital Trust I
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission
as Exhibit 1 to Amendment No. 1 to the Statement of Eligibility
and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 11th day of September, 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
------------------------------------
Paul D. Allen
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Liberty
Financial Companies, Inc. of its Guarantee, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
----------------------------------
Paul D. Allen
Vice President
Dated: September 11, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business June 30, 1998, published
in accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section
22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................. 1,553,703
Interest-bearing balances .......................................... 12,440,716
Securities................................................................... 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................ 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 6,633,608
Allowance for loan and lease losses ................. 92,999
Allocated transfer risk reserve...................... 0
Loans and leases, net of unearned income and allowances ............ 6,540,609
Assets held in trading accounts ............................................. 1,267,679
Premises and fixed assets ................................................... 491,928
Other real estate owned ..................................................... 100
Investments in unconsolidated subsidiaries .................................. 1,278
Customers' liability to this bank on acceptances outstanding ................ 68,312
Intangible assets ........................................................... 231,294
Other assets................................................................. 1,667,282
Total assets ................................................................ 42,484,392
==============
LIABILITIES
Deposits:
In domestic offices................................................. 12,553,371
Noninterest-bearing ........................ 10,204,405
Interest-bearing ........................... 2,348,966
In foreign offices and Edge subsidiary ............................. 16,961,571
Noninterest-bearing ........................ 154,792
Interest-bearing ........................... 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................ 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 0
Trading liabilities.......................................................... 883,096
Other borrowed money ........................................................ 361,141
Subordinated notes and debentures ........................................... 0
Bank's liability on acceptances executed and outstanding .................... 68,289
Other liabilities ........................................................... 1,017,284
Total liabilities ........................................................... 40,027,546
--------------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common stock ................................................................ 29,931
Surplus ..................................................................... 455,288
Undivided profits and capital reserves/Net unrealized holding gains (losses). 1,964,924
Net unrealized holding gains (losses) on available-for-sale securities ...... 15,557
Cumulative foreign currency translation adjustments ......................... (8,854)
Total equity capital ........................................................ 2,456,846
--------------
Total liabilities and equity capital ........................................ 42,484,392
--------------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
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 Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
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)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
Liberty Financial Companies, Inc.
(Exact name of obligor as specified in its charter)
MASSACHUSETTS 04-3260640
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(617) 722-6000
Guarantee relating to certain obligations of
Liberty Capital Trust II
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its parent,
State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission
as Exhibit 1 to Amendment No. 1 to the Statement of Eligibility
and Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-17940)
and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Eastern Edison
Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 11th day of September, 1998
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
--------------------------------------
Paul D. Allen
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Liberty
Financial Companies, Inc. of its Guarantee, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
----------------------------------
Paul D. Allen
Vice President
Dated: September 11, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business June 30, 1998, published
in accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act and in accordance with a
call made by the Commissioner of Banks under General Laws, Chapter 172, Section
22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ................. 1,553,703
Interest-bearing balances .......................................... 12,440,716
Securities................................................................... 9,436,138
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary ................................ 8,785,353
Loans and lease financing receivables:
Loans and leases, net of unearned income ............ 6,633,608
Allowance for loan and lease losses ................. 92,999
Allocated transfer risk reserve...................... 0
Loans and leases, net of unearned income and allowances ............ 6,540,609
Assets held in trading accounts ............................................. 1,267,679
Premises and fixed assets ................................................... 491,928
Other real estate owned ..................................................... 100
Investments in unconsolidated subsidiaries .................................. 1,278
Customers' liability to this bank on acceptances outstanding ................ 68,312
Intangible assets ........................................................... 231,294
Other assets................................................................. 1,667,282
Total assets ................................................................ 42,484,392
==============
LIABILITIES
Deposits:
In domestic offices................................................. 12,553,371
Noninterest-bearing ........................ 10,204,405
Interest-bearing ........................... 2,348,966
In foreign offices and Edge subsidiary ............................. 16,961,571
Noninterest-bearing ........................ 154,792
Interest-bearing ........................... 16,806,779
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary ................................ 8,182,794
Demand notes issued to the U.S. Treasury and Trading Liabilities ............ 0
Trading liabilities.......................................................... 883,096
Other borrowed money ........................................................ 361,141
Subordinated notes and debentures ........................................... 0
Bank's liability on acceptances executed and outstanding .................... 68,289
Other liabilities ........................................................... 1,017,284
Total liabilities ........................................................... 40,027,546
--------------
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common stock ................................................................ 29,931
Surplus ..................................................................... 455,288
Undivided profits and capital reserves/Net unrealized holding gains (losses). 1,964,924
Net unrealized holding gains (losses) on available-for-sale securities ...... 15,557
Cumulative foreign currency translation adjustments ......................... (8,854)
Total equity capital ........................................................ 2,456,846
--------------
Total liabilities and equity capital ........................................ 42,484,392
--------------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
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 Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
