Document/Exhibit Description Pages Size
1: 10-K Annual Report 43 265K
3: EX-10.38 Indenture Dated 11/30/1999 106 429K
4: EX-10.39 Supplemental Indenture #1 Dated 12/06/1999 34 119K
2: EX-10.4 Ace Limited Employee Retirement Plan 42 76K
5: EX-10.40 Amended & Restated Trust Agreement Dated 12/20 84 277K
1999
6: EX-10.41 Indenture Dated as of 12/01/1999 120 534K
7: EX-10.42 Common Securities Guarantee Agreement 13 45K
8: EX-10.43 Preferred Securities Guarantee Agreement 24 86K
9: EX-10.44 Service Agreement Btwn Ace London & J.R. Charman 27 66K
10: EX-10.45 Deed of Convenant Dated 07/09/1998 9 27K
11: EX-10.46 Consulting Agreement Dated 01/01/2000 6 19K
12: EX-10.47 Promissory Note From Dominic Frederico 3 17K
13: EX-10.49 2.05 Billion Credit Agmt. Dated as of 06/09/1999 111 322K
14: EX-10.50 250 Million Credit Agmt. Dated as of 06/11/1999 120 357K
15: EX-10.51 750 Million Credit Agmt. Dated as of 06/11/1999 109 317K
16: EX-10.52 Reimbursement Agreement Dated 09/08/1999 70 293K
17: EX-10.53 Gbp 290 Million Credit Agmt. Dated 11/26/1999 107 356K
18: EX-10.54 Ace Limited 1999 Replacement Stock Plan 11 44K
19: EX-13.1 Excerpt of the 1999 Annual Report 61 363K
20: EX-21.1 Subsidiaries of the Company 5 29K
21: EX-23.1 Consent of Pricewaterhousecoopers LLP 1 10K
22: EX-27.1 Financial Data Schedule 2 10K
EX-10.40 — Amended & Restated Trust Agreement Dated 12/20 1999
Exhibit Table of Contents
Exhibit 10.40
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ACE CAPITAL TRUST I
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
ACE INA HOLDINGS INC.,
AS DEPOSITOR
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
AS PROPERTY TRUSTEE
BANK ONE DELAWARE, INC.,
AS DELAWARE TRUSTEE
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF DECEMBER 20, 1999
--------------------------------------------------------------------------------
1
ACE Capital Trust I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the Trust Indenture Act of 1939:
[Download Table]
Trust
Trust Indenture Agreement
Act Section Section
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(S)310(a)(1) 8.7
(a)(2) 8.7
(a)(3) 8.9
(a)(4) 2.7(a)(ii)
(b) 8.8
(S)311(a) 8.13
(b) 8.13
(S)312(a) 5.7
(b) 5.7
(c) 5.7
(S)313(a) 8.14(a)
(a)(4) 8.14(b)
(b) 8.14(b)
(c) 10.8
(d) 8.14(c)
(S)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
(S)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
(S)316(a) Not Applicable
(a)(1)(A) Not Applicable
(a)(1)(B) Not Applicable
(a)(2) Not Applicable
(b) Not Applicable
(c) 6.7
(S)317(a)(1) Not Applicable
(a)(2) Not Applicable
(b) 5.9
2
[Download Table]
(S)318(a) 10.10
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Note: This reconciliation and tie sheet shall not, for any purpose be deemed to
be a part of the Trust Agreement.
3
Table of Contents
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Page
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ARTICLE I.
DEFINED TERMS
Section 1.1 Definitions 2
ARTICLE II.
ESTABLISHMENT OF THE TRUST
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 10
Section 2.4 Issuance of the Preferred Securities 10
Section 2.5 Issuance of the Common Securities; Subscription and Purchase of Debentures 11
Section 2.6 Declaration of Trust 11
Section 2.7 Authorization to enter into Certain Transactions 12
Section 2.8 Assets of Trust 15
Section 2.9 Title to Trust Property 15
ARTICLE III.
PAYMENT ACCOUNT
Section 3.1 Payment Account 15
ARTICLE IV.
CERTAIN TERMS OF THE TRUST SECURITIES
Section 4.1 Distributions 16
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
Section 5.1 Initial Ownership 21
Section 5.2 The Trust Securities Certificates 21
Section 5.3 Execution and Delivery of Trust Securities Certificates 21
Section 5.4 Registration of Transfer and Exchange of Preferred Securities Certificates 22
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Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates 22
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 25
Section 5.12 Notices to Clearing Agency 26
Section 5.13 Definitive Preferred Securities Certificates 26
Section 5.14 Rights of Securityholders 26
ARTICLE VI.
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.1 Limitations on Voting Rights 29
Section 6.2 Notice of Meetings 30
Section 6.3 Meetings of Preferred Securityholders 30
Section 6.4 Voting Rights 30
Section 6.5 Proxies, etc. 31
Section 6.6 Securityholder Action by Written Consent 31
Section 6.7 Record Date for Voting and Other Purposes 31
Section 6.8 Acts of Securityholders 31
Section 6.9 Inspection of Records 32
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
Section 7.1 Representations and Warranties of the Property Trustee and the
Delaware Trustee 32
Section 7.2 Representations and Warranties of Depositor 34
ARTICLE VIII.
THE TRUSTEES
Section 8.1 Certain Duties and Responsibilities 34
Section 8.2 Certain Notices 35
Section 8.3 Certain Rights of Property Trustee 35
Section 8.4 Not Responsible for Recitals or Issuance of Securities 37
Section 8.5 May hold Securities 37
Section 8.6 Compensation; Indemnity; Fees 38
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees 38
Section 8.8 Conflicting Interests 39
Section 8.9 Co-Trustees and Separate Trustee 39
Section 8.10 Resignation and Removal; Appointment of Successor 40
Section 8.11 Acceptance of Appointment by Successor 42
Section 8.12 Merger, Conversion, Consolidation or Succession to Business 43
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Section 8.13 Preferential Collection of Claims Against Depositor,
Debenture Issuer or Trust 43
Section 8.14 Reports by Property Trustee 43
Section 8.15 Reports to the Property Trustee 44
Section 8.16 Evidence of Compliance with Conditions Precedent 44
Section 8.17 Number of Trustees 44
Section 8.18 Delegation of Power 44
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ARTICLE IX.
DISSOLUTION, LIQUIDATION, TERMINATION AND MERGER
Section 9.1 Dissolution upon Expiration Date 45
Section 9.2 Early Dissolution 45
Section 9.3 Termination 45
Section 9.4 Liquidation 46
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements of the Trust 47
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.1 Limitation of Rights of Securityholders 48
Section 10.2 Amendment 48
Section 10.3 Separability 49
Section 10.4 Governing Law 49
Section 10.5 Payments due on Non-Business Day 50
Section 10.6 Successors 50
Section 10.7 Headings 50
Section 10.8 Reports, Notices and Demands 50
Section 10.9 Agreement not to Petition 51
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act 51
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and Indenture 52
Exhibit A-1 Certificate of Trust of ACE Capital Trust I
Exhibit A-2 Assignment and Assumption Agreement and First Amendment to the
Trust Agreement of ACE Capital Trust I
Exhibit B Form of Certificate Depository Agreement Pertaining to the Trust
Originated Preferred Securities
Exhibit C Form of Common Security Certificate
Exhibit D Form of Agreement as to Expenses and Liabilities
Exhibit E Form of Preferred Security Certificate
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of December 20, 1999,
among (i) ACE INA HOLDINGS INC., a corporation duly organized and existing under
the laws of the State of Delaware (including any successors or assigns, the
"Depositor"), (ii) BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION, previously
known as The First National Bank of Chicago, a national banking association duly
organized and existing under the laws of the United States, as property trustee
(the "Property Trustee" and, in its individual capacity and not in its capacity
as Property Trustee, the "Bank"), (iii) BANK ONE DELAWARE, INC., a Delaware
corporation, as Delaware trustee (in such capacity, the "Delaware Trustee,"),
(iv) Robert A. Blee, an individual, and Christopher Z. Marshall, an individual,
each of whose address is c/o ACE Limited, The ACE Building, 30 Woodbourne
Avenue, Hamilton, HM08, Bermuda (each an "Administrative Trustee" and
collectively, the "Administrative Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees are referred to collectively as the
"Trustees") and (v) the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, ACE Limited, as original sponsor of the Trust (the "Original
Depositor") and certain of the Trustees (the "Original Trustees") have
heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act by the entering into of that certain Trust
Agreement, dated as of May 19, 1999 (the "Initial Trust Agreement"), and by the
execution by the Original Trustees and filing with the Secretary of State of the
State of Delaware of the Certificate of Trust, filed on May 19, 1999 (the
"Certificate of Trust"), attached as Exhibit A-1;
WHEREAS, the Original Depositor has assigned to the Depositor, and the
Depositor has assumed, all of the Original Depositor's right, title and interest
in and to, and its obligations as Trust sponsor under, the Initial Trust
Agreement, pursuant to the Assignment and Assumption Agreement and First
Amendment to the Trust Agreement of ACE Capital Trust I, dated as of August 5,
1999 (the "Amendment"), among the Original Depositor, the Depositor and the
Original Trustees (the Initial Trust Agreement as amended by the Amendment being
hereinafter referred to as the "Original Trust Agreement"), attached as Exhibit
A-2; and
WHEREAS, the Depositor (as successor Trust sponsor) 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 Debenture Issuer (as hereinafter defined)
of all of the right, title and interest in the Debentures and (iv) the
appointment of an additional Administrative Trustee;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and
8
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;
(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 Amounts" means, with respect to Trust Securities of a given
Liquidation Amount, for a given period, the amount of any Additional Interest
and any Additional Amounts (as defined in the Indenture) paid by the Debenture
Issuer or the Debenture Guarantor on a Like Amount of Debentures for such
period.
"Additional Interest" has the meaning specified in Section 1.1 of the
Indenture.
"Additional Sums" has the meaning specified in Section 10.9 of the
Indenture.
"Administrative Trustee" means each of Robert A. Blee and Christopher Z.
Marshall, solely in such Person's capacity as Administrative Trustee of the
Trust 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.
9
"Bankruptcy Event" means, with respect to any Person: (a) the entry of a
decree or order by a court having jurisdiction in the premises judging such
Person a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjudication or composition of or in
respect of such Person under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of such
Person or of any substantial part of its property or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or (b) the
institution by such Person of proceedings to be adjudicated a bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
proceedings against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or the consent by
it to the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or similar official) of such Person
or of any substantial part of its 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 Law" 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 Depositor 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, delivered to the appropriate Trustee or 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 DTC, 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.
"Certificate of Trust" has the meaning specified in the recitals to this
Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. DTC
will be the initial Clearing Agency.
10
"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 Time" has the meaning specified in the Underwriting Agreement,
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
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 Chicago, Illinois.
"Date of Delivery" has the meaning specified in the Underwriting Agreement.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Guarantor" means ACE Limited, a Cayman Islands company, in its
capacity as guarantor under the Indenture, and its successors.
"Debenture Issuer" means ACE INA Holdings Inc., a Delaware corporation, in
its capacity as the issuer of the Debentures under the Indenture, and its
successors.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Trustee" means the Bank, in its capacity as trustee under the
Indenture, or any successor trustee appointed as therein provided.
"Debentures" means the aggregate principal amount of the Debenture Issuer's
8.875% Junior Subordinated Deferrable Interest Debentures due 2029, 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
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Certificates 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 first paragraph of this Trust Agreement solely in its capacity
as Delaware Trustee of the Trust 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.
"Direct Action" has the meaning specified in Section 5.14(c).
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"DTC" means The Depository Trust Company.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (a) the occurrence of a Debenture Event
of Default; or (b) default by the 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.
12
"Expiration Date" has the meaning specified in Section 9.1.
"Extension Period" has the meaning specified in Section 4.1(a).
"Guarantee" means the Preferred Securities Guarantee Agreement executed and
delivered by the Preferred Securities Guarantor and the Bank, as Guarantee
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 Subordinated Indenture, dated as of December 1, 1999,
among the Debenture Issuer, the Debenture Guarantor and the Debenture Trustee,
as trustee, as amended or supplemented from time to time.
"Initial Trust Agreement" has the meaning specified in the recitals to this
Trust Agreement.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"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 dissolution and liquidation
of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(e).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, a Vice Chairman, the President, any Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Depositor, that complies with the requirements of Section 314(e) of the
Trust Indenture Act and is delivered to the appropriate Trustee or Trustees.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor, as the case may be, or
other counsel who shall be reasonably acceptable to the Property Trustee, that,
if required by the Trust Indenture Act,
13
complies with the requirements of Section 314(e) of the Trust Indenture Act.
"Original Depositor" has the meaning specified in the recitals to this
Trust Agreement.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Original Trustees" 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, unless there shall have
been presented to the Property Trustee proof satisfactory to it that
such Preferred Security is held by a bona fide purchaser in whose hand
such Preferred Security is a valid obligation of the Trust;
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
or are present at a meeting of Securityholders for quorum purposes, 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 (a) 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 (b) 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 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
14
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 Paying Agent 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.
"Preferred Securities Guarantor" means ACE Limited, a Cayman Islands
company, in its capacity as guarantor under the Guarantee, and its successors.
"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 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 the related amount of the premium, if
any, and any Additional Amounts paid by the Debenture Issuer or the Debenture
Guarantor 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.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in
15
Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person being 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 purposes 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.
"Successor Securities" has the meaning specified in Section 9.5.
"Time of Delivery" means, collectively, the Closing Time and each Date of
Delivery.
"Trust" means the Delaware business trust created by the Original Trust
Agreement and the Certificate of Trust 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 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) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to 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 Underwriting Agreement, dated as of
December 15, 1999, among the Trust, the Depositor, ACE Limited and the
Underwriters named therein.
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ARTICLE II.
ESTABLISHMENT OF THE TRUST
Section 2.1 Name.
The Trust continued hereby shall be known as "ACE 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 Three
Christina Centre, 201 North Walnut Street, Wilmington, Delaware 19801, or such
other address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Depositor. The principal executive office of the Trust is
c/o ACE INA Holdings Inc., Two Liberty Place, 1601 Chestnut Street,
Philadelphia, Pennsylvania 19101.
Section 2.3 Initial Contribution of Trust Property; Organizational Expenses.
The Trustees acknowledge receipt in trust from the Original Depositor in
connection with the Initial 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.
The Depositor, on behalf of the Trust and as successor Trust sponsor under
the Initial Trust Agreement, has executed and delivered the Underwriting
Agreement. At the Closing Time, 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 4,000,000 Preferred Securities having an
aggregate Liquidation Amount of $100,000,000, against receipt of such aggregate
purchase price of such Preferred Securities of $100,000,000, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee. On each
Date 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 600,000 Preferred Securities (less such number of Preferred Securities
evidenced by Preferred Securities Certificates executed and delivered on any
prior Dates of Delivery) having an aggregate Liquidation Amount of up to
$15,000,000 (less the aggregate Liquidation Amount of any Preferred Securities
evidenced by Preferred Securities Certificates executed and delivered on any
prior Dates of Delivery), against receipt of such aggregate purchase price of
such Preferred Securities of $15,000,000 (less the
17
aggregate Liquidation Amount of any Preferred Securities evidenced by Preferred
Securities Certificates executed and delivered on any prior Dates of Delivery),
which amount such Administrative Trustee shall promptly deliver to the Property
Trustee.
Section 2.5 Issuance of the Common Securities; Subscription and Purchase of
Debentures.
(a) At the Closing Time, 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 123,712 Common Securities having an aggregate Liquidation
Amount of $3,092,800, against payment by the Depositor of such amount, which
amount such Administrative Trustee shall promptly deliver to the Property
Trustee. On each Date 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 18,557 Common Securities (less such number of Common
Securities evidenced by Common Securities Certificates executed and delivered on
any prior Dates of Delivery) having an aggregate Liquidation Amount of up to
$463,925 (less the aggregate Liquidation Amount of any Common Securities
evidenced by Common Securities Certificates executed and delivered on any prior
Dates of Delivery), against payment by the Depositor of such amount, which
amount such Administrative Trustee shall promptly deliver to the Property
Trustee.
(b) At the Closing Time and on each Date of Delivery, an Administrative
Trustee, on behalf of the Trust, shall subscribe to and purchase from the
Debenture Issuer Debentures, registered in the name of the Trust and having an
aggregate principal amount equal to the aggregate Liquidation Amount of the
Preferred Securities and Common Securities issued and sold on such date, and, in
satisfaction of the purchase price for such Debentures, the Property Trustee, on
behalf of the Trust, shall deliver to the Debenture Issuer the amount received
on such date from one of the Administrative Trustees pursuant to Section 2.4 and
Section 2.5.
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 upon and subject to the conditions
set forth herein for the benefit of 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
Trustees set forth herein except as required by the Delaware Business Trust Act.
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(a) of the
Delaware Business Trust Act.
Section 2.7 Authorization to enter into Certain Transactions.
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(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 Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative 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 of the Administrative Trustees, acting
singly or together, 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;
(C) to assist 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) to assist 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; and to seek relief from the reporting requirements
of the Securities Exchange Act of 1934, as amended;
(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) the establishment of a record date for any of the purposes
contemplated by Section 6.7 hereof;
(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
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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;
(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 to 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) engaging in such ministerial activities as shall be
necessary, appropriate, convenient or incidental to effect the
repayment of the Preferred Securities and the
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Common Securities to the extent the Debentures mature or are redeemed.
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 cause the Trust to (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 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
21
Underwriting Agreement providing for the sale of the Preferred Securities;
and
(vi) the taking of any other actions deemed by the Depositor to be
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 or
classified as an association taxable as a corporation for United States Federal
income tax purposes and so that the Debentures will be treated as indebtedness
of the Debenture Issuer 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.
CERTAIN TERMS OF THE TRUST SECURITIES
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 December 20, 1999, and shall
be payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, commencing on March 31, 2000, except as otherwise described
below. The Debenture Issuer has the right under the Indenture, at any time and
from time to time, to defer payments of interest for such period or periods as
may be specified with respect to the Debentures (each, an "Extension Period"),
on the terms and conditions specified in the Indenture. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accumulate at the rate set forth in paragraph (b)
of this Section 4.1, together with additional distributions thereon (to the
extent permitted by applicable law) at the rate at which Additional Interest is
then accruing on the Debentures, compounded quarterly during any such Extension
Period. 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
additional distributions 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 the date such payment was
originally payable (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 the Distributions on the Trust Securities shall be payable
at a rate of 8.875% per annum of the Liquidation Amount of the Trust Securities.
The term "Distributions" as used herein includes such cash distributions and any
accumulated or additional distributions that are payable hereunder unless
otherwise stated. The amount of Distributions payable for any full or partial
period shall be computed on the basis of a 360-day year of twelve 30-day months.
The amount of Distributions payable for any period shall include 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 at the close of business on the relevant record date, which, as long as
the Preferred Securities remain in book-entry only form, shall be the date one
Business Day immediately preceding such Distribution Date. The relevant record
dates for the Common Securities shall be the same record dates as for the
Preferred Securities. If the Preferred Securities shall not continue to remain
in book-entry only form or are not in book-entry only form at issuance, the
relevant record dates for the Preferred Securities
23
shall be the date 15 days prior to the relevant Distribution Date, which
Distribution Dates shall correspond to the interest payment dates on the
Debentures. Distributions payable on any Trust Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture Issuer
(or the Debenture Guarantor on its behalf) having failed to make an interest
payment under the Debentures, will cease to be payable to the Person in whose
name such Trust Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Trust Securities are registered on the special record date or other specified
date for determining Debentureholders entitled to such defaulted interest
established in accordance with the Indenture.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed pro rata among the Holders of the Trust Securities. A reference
herein to any payment, distribution or treatment as being "pro rata" shall mean
pro rata to each Holder of Trust Securities according to the aggregate
Liquidation Amount of the Trust Securities held by the relevant Holder in
relation to the aggregate Liquidation Amount of all Trust Securities outstanding
unless, in relation to a payment, a Debenture Event of Default has occurred and
is continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to the
aggregate Liquidation Amount of Preferred Securities held by the relevant Holder
relative to the aggregate Liquidation Amount of all Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Preferred Securities, to each Holder of Common Securities pro rata according
to the aggregate Liquidation Amount of Common Securities held by the relevant
Holder relative to the aggregate Liquidation Amount of all Common Securities
outstanding.
Section 4.2 Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at a price per Trust Security equal to 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
24
(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.
(d) If the Property Trustee gives a notice of redemption (which notice
shall be irrevocable) 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 relevant Persons' accounts at such Clearing Agency on
the applicable Redemption Date. If the Preferred Securities are no longer in
book-entry-only form, and in the case of the Common Securities, 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 Trust Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Securities
Register 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 immediately prior to the close of business on 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 and any Distributions 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 Preferred Securities
Guarantor 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.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the recordholders thereof as they appear on the Securities Register for the
Trust Securities on the
25
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.
(f) 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.
(g) Subject to applicable law, the Preferred Securities Guarantor and its
subsidiaries, including the Depositor, may at any time and from time to time
purchase Outstanding Preferred Securities by tender in the open market or by
private agreement.
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(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date 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.
26
(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 by the
Code to be provided. The Administrative Trustees shall provide the Depositor and
the Property Trustee with a copy of all such returns and reports promptly after
such filing or furnishing. 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 shall be
reduced by
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the amount of any corresponding payment such Holder (and any Owner with respect
thereto) 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 minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in excess
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.
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, a
Vice Chairman, its President, a Vice President or its Treasurer and attested by
its Secretary or one of its Assistant Secretaries, 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"). 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
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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 after such Preferred Securities 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 customary practice. Registration of transfers or
exchanges of Preferred Securities Certificates shall be effected without service
charge by or on behalf of the Trust, but the Securities Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any such transfer or exchange.
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.
Prior to due presentation of a Trust Securities Certificate for
registration of transfer, the Administrative Trustees or the Securities
Registrar shall treat the Person in whose name any
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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.
The Administrative Trustees shall furnish or cause to be furnished (x) to
the Depositor, within 15 days after receipt by any Administrative Trustee of a
request therefor from the Depositor in writing and (y) to the Property Trustee,
promptly after receipt by any Administrative Trustee of a request therefor from
the Property Trustee in writing in order to enable the Property Trustee to
discharge its obligations under this Trust Agreement, a list, in such form as
the Depositor or the Property Trustee may reasonably require, of the names and
addresses of the Securityholders as of a recent date. If Holders of Trust
Securities Certificates evidencing ownership at such time and for the previous
six months of not less than 25% of the Outstanding aggregate Liquidation Amount
apply in writing to any Administrative Trustee, and such application states that
the applicants desire to communicate with other Securityholders with respect to
their rights under this Trust Agreement or under the Trust Securities
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Administrative Trustees
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of
Securityholders. Each Holder, by receiving and holding 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 in Chicago, Illinois, 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 and the Trust
Agreement may be served. The Administrative Trustees initially designate Bank
One Trust Company, National Association, Bank One Plaza, Suite IL1-0126,
Chicago, Illinois 60670-0126; Attention: Corporate Trust Services Division, as
the 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.
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
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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 (which shall be a bank or
trust company that is acceptable to the Administrative Trustees and the
Depositor) to act as Paying Agent. 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 Paying Agent appointed hereunder 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 all of the Common Securities then issued by the Trust,
in an amount equal to at least 3% of the total capital of the Trust, at the same
time as the Preferred Securities are issued and sold. The aggregate Liquidation
Amount of the Common Securities at any time shall not be less than 3% of the
total capital of the Trust. 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 EXCEPT AS PROVIDED IN THE TRUST AGREEMENT (AS
DEFINED BELOW)".
Section 5.11 Book-Entry Preferred Securities Certificates; Common Securities
Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to DTC, 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 beneficial owner will receive a Definitive
Preferred Securities Certificate representing such beneficial owner's interest
in such Preferred Securities, except as provided in Section 5.13. Except for
Definitive Preferred Securities Certificates as specified herein, unless and
until
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Definitive Preferred Securities Certificates have been issued to beneficial
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; provided,
that solely for the purposes of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided
for in this Trust Agreement, so long as Definitive Preferred Security
Certificates have not been issued, the Trustees may conclusively rely on,
and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the
Owners' votes or assigning the right to vote on any matter to any other
Persons either in whole or in part. Pursuant to the Certificate Depository
Agreement, unless and until 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.
(a) 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.
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 act as clearing agency with respect to
the Preferred Securities Certificates, and the Depositor fails to appoint a
qualified successor within 90 days, (b) the Depositor at its option
32
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
of the Outstanding Preferred Securities advise the Property Trustee 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 Property 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 Property
Trustee 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 to the Debenture
Issuer, the Debenture Guarantor, the Debenture Trustee and the Property 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, interest, and any other amounts payable with respect
to such Debentures shall remain
33
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 then Outstanding, by written notice to the Debenture Issuer, the
Debenture Guarantor, the Debenture Trustee and the Property Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Debenture Issuer or the Debenture Guarantor has paid or
deposited with the Debenture Trustee a sum sufficient to pay
(A) all overdue installments of interest (including any
Additional Interest) on, and any other Additional Amounts with respect
to, all of the Debentures,
(B) the principal of and premium on any Debentures which have
become due otherwise than by such declaration of acceleration and
interest thereon and any Additional Amounts with respect thereto at
the rate or rates borne by or provided for in the Debentures,
(C) to the extent the payment of such interest or Additional
Amounts is lawful, interest upon overdue installments of any interest
and Additional Amounts at the rate or rates borne by or provided for
in the Debentures, and
(D) all sums paid or advanced by the Debenture Trustee under the
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Debenture Trustee, its agents and counsel and all
other amounts due the Debenture Trustee under the Indenture; and
(ii) all Events of Default with respect to the Debentures, other than
the non-payment of the principal of, any premium and interest on, and any
Additional Amounts with respect to the Debentures which have become due
solely by such acceleration, have been cured or waived as provided in
Section 5.13 of the Indenture.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
The Holders of not less than a majority in Liquidation Amount of the
Preferred Securities then Outstanding may, on behalf of the Holders of all the
Preferred Securities, waive any past default under the Indenture, except a
default (i) in the payment of principal of, any premium or interest (including
any Additional Interest) on, or any other Additional Amounts with respect to,
the Debentures or (ii) 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.
Upon receipt by the Property Trustee of written notice declaring such
an
34
acceleration, or rescission and annulment thereof, by Holders of the Preferred
Securities all or part of which are 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. 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, any Holder of Preferred Securities shall have the right, upon
a Debenture Event of Default specified in Section 5.1(1) or 5.1(2) of the
Indenture, to institute directly a proceeding against the Debenture Issuer or
the Debenture Guarantor, as the case may be, pursuant to Section 5.8 of the
Indenture, for enforcement of payment to such Holder of the principal of, and
any premium and (subject to the provisions of the Indenture) interest (including
any Additional Interest) on, and any other Additional Amounts with respect to,
such 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 Common Securities will be
subrogated to the rights of any Holder of Preferred Securities to the extent of
any payment made by the Debenture Issuer or the Debenture Guarantor, as the case
may be, to such Holder of Preferred Securities as a result of such Direct
Action. Except as set forth in Section 5.14(b) and (c), or as otherwise
contemplated by the Indenture, 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.
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(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
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 rendered by 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. No amendment to
this Trust Agreement may be made if, as a result of such amendment, the
Trust would be classified as an association taxable as a corporation for
United States federal income tax purposes.
Section 6.2 Notice of Meetings.
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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 any time in
their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which 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 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.
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Section 6.6 Securityholder Action by Written Consent.
Any required approval or action which may be given or taken by
Securityholders at a meeting convened for such purpose may be given or taken
without a meeting and without prior notice if Securityholders holding 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.
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 to act by written consent, or to
participate in any distribution on the Trust Securities in respect of which a
record date is not otherwise provided for in this Trust Agreement, or for the
purpose of any other action, the Administrative Trustees may from time to time
fix a date, not more than 90 days prior to the date of any meeting of
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
38
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 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.
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 Property Trustee and the
Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf of
and solely as each such representation or warranty applies to itself, hereby
represents and warrants for the benefit of the Depositor and the Securityholders
that:
(a) the Property Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United States, and
the Delaware Trustee is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) each of the Property Trustee and 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,
and, in the case of the Delaware Trustee, satisfies for the Trust Section
3807(a) of the Delaware Business Trust Act;
(c) this Trust Agreement has been duly authorized, executed and delivered
by each of the Property Trustee and the Delaware Trustee and constitutes the
respective valid and legally binding agreement of each of the Property Trustee
and the Delaware Trustee enforceable against it 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;
(d) the execution, delivery and performance by each of the Property Trustee
and the Delaware Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Property Trustee or the
Delaware Trustee, as the case may be, and
39
does not require any approval of stockholders of the Property Trustee or the
Delaware Trustee, and such execution, delivery and performance will not (i)
violate the Property Trustee's or the Delaware Trustee's Charter or By-laws,
(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, as the case may be, 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 corporate, banking or trust 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;
(e) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee, as the case may be, of this Trust Agreement nor
the consummation of any of the transactions by the Property Trustee or the
Delaware Trustee, as the case may be, 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 corporate, banking or trust
powers of the Property Trustee or the Delaware Trustee, as appropriate in
context, under the laws of the United States or the State of Delaware; and
(f) 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 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 Trust
Agreement and the Securityholders will be, as of each such date, entitled to the
benefits 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, subject to the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to
40
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. 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 Trust or 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 and, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own bad faith, negligence or willful
misconduct, except that: (i) the Property Trustee undertakes to perform only
those duties specifically set forth in this Agreement, provided that, it must
exercise the same degree of care as a prudent person would exercise in the
conduct of his or her own affairs; (ii) the Property Trustee shall not be liable
for any error of judgment made in good faith by an authorized officer of the
Property Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts; (iii) the Property Trustee shall
not be liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of 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; (iv) 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; (v) the Property Trustee
shall not be liable for any interest on any money received by it except as it
may otherwise agree with the Depositor; and money held by the Property Trustee
need not be segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section 3.1 and
except to the extent otherwise
41
required by law; and (vi) 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 ninety (90) 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 Debenture Issuer's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustees 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 and the Property Trustee shall be fully
protected in acting in accordance with such instructions; provided, however,
that if the Property Trustee does not receive such instructions of the Depositor
within ten (10) 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 (2) 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;
42
(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;
(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; 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
43
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 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 Depositor, and the Trustees do not
assume any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Debenture Issuer of the proceeds
of the Debentures.
Section 8.5 May hold Securities.
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, except as otherwise provided in the definition of "Outstanding"
in Article I 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 bad faith, negligence or willful
misconduct; and
(c) to indemnify each of the Trustees and their agents, officers, directors
and employees or any predecessor Trustee for, and to hold them harmless against,
any loss, damage, claims, liability, penalty or expense incurred without bad
faith, negligence or willful misconduct on their
44
part, arising out of or in connection with the acceptance or administration of
this Trust Agreement, including the costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance of
any of their powers or duties hereunder.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement or the resignation or removal of any Trustee. 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.
Section 8.7 Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder. 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.
(b) There shall at all times be one or more Administrative Trustees
hereunder. 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. 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. Subject to the foregoing, 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 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
45
investment or other opportunity. Any Trustee may engage 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 8.9 Co-Trustees and Separate 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 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. 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.
46
(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. Subject to the
immediately preceding sentence, the Relevant Trustee may resign at any time with
respect to the Trust Securities by giving written notice thereof to the
Depositor. 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 Depositor, any court of competent jurisdiction
for the appointment of a successor Relevant Trustee with respect to the Trust
Securities. 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). In no event will the Holders
of Preferred Securities have the right to vote to appoint, remove or replace the
Administrative Trustees. An Administrative Trustee may be removed by Act of 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 with respect to the Trust Securities and the
Trust, 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
47
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 with respect to the Trust Securities and the Trust, 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 with respect to the
Trust Securities and the Trust, and such successor Administrative Trustee or
Trustees shall comply with the applicable requirements of Section 8.11. If no
successor Relevant Trustee with respect to the Trust Securities 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 with
respect to the Trust Securities. The Depositor shall give notice of each
resignation and each removal of the Property Trustee or the Delaware Trustee and
each appointment of a successor Property Trustee or Delaware Trustee to all
Securityholders in the manner provided in Section 10.8. Each notice shall
include the name of the successor Relevant Trustee and the address of its
Corporate Trust Office if it is the Property Trustee. Notwithstanding the
foregoing or any other provision of this Trust Agreement, in the event any
Administrative Trustee or a Delaware Trustee who is a natural person dies or
becomes, in the opinion of the 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
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 with respect to the Trust Securities
and the Trust, 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
48
(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 trusts
hereunder by more than one Relevant Trustee, it being understood that nothing
herein or in such amendment shall constitute such Relevant Trustees co-trustees
of the same trust and that each such Relevant Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Relevant Trustee 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 with respect to the Trust Securities and the Trust; 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. 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 (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 Relevant Trustee
shall be a party, 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, Debenture
Issuer or Trust.
If and when the Property Trustee or the Delaware Trustee shall be or become
a creditor of the Depositor, the Debenture Issuer or the Trust (or any other
obligor upon the Debentures or the Trust Securities), the Property Trustee or
the Delaware Trustee, as the case may be, shall be subject to and shall take all
actions necessary in order to comply with the provisions of the Trust Indenture
Act regarding the collection of claims against the Depositor, Debenture Issuer
or Trust (or any such other obligor).
Section 8.14 Reports by Property Trustee.
(a) Within 60 days after September 15 of each year commencing with the
first September 15
49
following the first issuance of Preferred Securities pursuant to this Trust
Agreement, 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 September 15 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 Time) ending with such September 15 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 stock exchange, interdealer
quotation system or other 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.
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 if the Property Trustee meets the applicable
requirements.
50
(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,
dissolve or terminate 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 the Trust, as set forth herein.
ARTICLE IX.
DISSOLUTION, LIQUIDATION, TERMINATION AND MERGER
Section 9.1 Dissolution upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on
December 31, 2054 (the "Expiration Date").
Section 9.2 Early Dissolution.
The first to occur of any of the following events is an "Early Termination
Event", upon the occurrence of which the Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Debenture Issuer or the Debenture Guarantor;
(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 dissolve the Trust and distribute a Like Amount of Debentures to
Securityholders in exchange for the Trust Securities;
51
(c) the redemption of all of the Trust 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 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(e).
(b) 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 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(e) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee shall deem
appropriate.
(c) Except where Section 9.2(c) or 9.4(e) 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.
52
(d) Except where Section 9.2(c) or 9.4(e) applies, on and 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 the Holders of Trust Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange, (iii)
the Depositor shall cause the Debenture Issuer to use its reasonable efforts to
have the Debentures listed or traded on the such stock exchange, interdealer
quotation system and/or other self-regulatory organization as the Preferred
Securities are then listed or traded, (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.
(e) 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 wound-up and terminated by
the Property Trustee in such manner as the Property Trustee determines. In such
event, Securityholders will be entitled to receive out of the assets of the
Trust available for 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 winding up, 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 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, convert 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 entity, except
pursuant to this Section 9.5 or Section 9.4. The Trust may, at the request of
the Depositor, with the consent of only the Administrative Trustees and without
the consent of the Holders of the Preferred Securities, merge with or into,
convert into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to 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
53
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, conversion, 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, conversion, 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 substantially identical to that of the
Trust, (vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Depositor has received an
Opinion of Counsel rendered by independent counsel experienced in such matters
to the effect that (a) such merger, conversion, 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, conversion, 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 Investment Company Act and (viii)
the Depositor (or any permitted successor or assignee) owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. 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, convert 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, convert into, or replace it if such
consolidation, amalgamation, merger, conversion, 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.
54
Section 10.2 Amendment.
(a) This Trust Agreement may be amended from time to time by the 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 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 Securityholder.
Any such 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 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 Investment Company Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder, 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, 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 Investment Company 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, this
Trust Agreement may not be amended in a manner which imposes any additional
obligation on the Depositor, the Property Trustee or the Delaware Trustee
without the consent of the Depositor, the Property Trustee or the Delaware
Trustee, as the case may be.
(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.
55
(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.
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 may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
Section 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
56
name and address may appear on the Securities Register; and (b) in the case of
the Common Securityholder or the Depositor, to ACE INA Holdings Inc., Two
Liberty Place, 1601 Chestnut Street, Philadelphia, Pennsylvania 19101,
Attention: General Counsel, facsimile no.: 215-761-5380. 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 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 Trustee, to Bank One Trust Company, National Association, Bank
One Plaza, Suite IL1-0126, Chicago, Illinois 60670-0126, Attention: Corporate
Trust Services Division; (b) with respect to the Delaware Trustee, to Bank One
Delaware, Inc., Three Christina Center, 201 North Walnut Street, Wilmington,
Delaware 19801, Attention: Legal Department/First USA; and (c) with respect to
the Administrative Trustees, to them at c/o ACE Limited, The ACE Building, 30
Woodbourne Avenue, Hamilton, HM08, Bermuda, Attention: General Counsel,
facsimile no.: 441-296-7799, marked "Attention Administrative Trustees of ACE
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 dissolved 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
57
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 Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
58
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.
ACE INA HOLDINGS INC., as Depositor
By:
Name:
Title:
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Property Trustee
By:
Name:
Title:
BANK ONE DELAWARE, INC.,
as Delaware Trustee
By:
Name:
Title:
Robert A. Blee,
as Administrative Trustee
Christopher Z. Marshall,
as Administrative Trustee
59
EXHIBIT A-1
-----------
CERTIFICATE OF TRUST
OF
ACE CAPITAL TRUST I
This Certificate of Trust of ACE Capital Trust I (the "Trust"), dated as of
May 19, 1999, 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. (S)
3801. et seq.)
1. Name. The name of the business trust formed hereby is ACE 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 is Bank One
Delaware, Inc., Three Christina Centre, 201 North Walnut Street, Wilmington,
Delaware 19801.
3. Effective Date. This Certificate of Trust shall be effective upon
filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned being the trustees of the Trust, have
executed this Certificate of Trust as of the date first above written.
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely as trustee
of the trust
By: _________________________________
Name:
Title:
BANK ONE DELAWARE, INC., not in its
individual capacity but solely as trustee of the
Trust
By: _________________________________
Name:
Title:
_______________________________________
ROBERT A. BLEE, not in his individual capacity
but solely as trustee of the Trust
A-1-61
EXHIBIT A-2
-----------
ASSIGNMENT AND ASSUMPTION AGREEMENT
AND
FIRST AMENDMENT TO THE
TRUST AGREEMENT OF
ACE CAPITAL TRUST I
This Assignment and Assumption Agreement and First Amendment to the Trust
Agreement of ACE Capital Trust I (the "Trust"), dated as of August 5, 1999 (this
"Assignment and Amendment Agreement"), is made and entered into by and among ACE
Limited, a Cayman Islands company limited by shares, as the original depositor
(the "Original Depositor"), ACE INA Holdings Inc., a Delaware corporation, as
the substitute depositor (the "Substitute Depositor"), The First National Bank
of Chicago, a national banking association, as property trustee (the "Property
Trustee"), Bank One Delaware, Inc., a Delaware corporation, as trustee (the
"Delaware Trustee"), and Robert A. Blee, an individual, as trustee (the
"Administrative Trustee") (the Property Trustee, the Delaware Trustee and the
Administrative Trustee being hereinafter collectively referred to as the
"Trustees").
WITNESSETH
----------
WHEREAS, the Trust is a Delaware statutory business trust that was created
under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. (S) 3801, et seq.
pursuant to (i) the Trust Agreement of the Trust, dated as of May 19, 1999 (the
"Trust Agreement"), and (ii) the Certificate of the Trust of the Trust, dated as
of May 19, 1999, as filed with the office of the Secretary of State of the State
of Delaware on May 19, 1999;
WHEREAS, the Original Depositor, as the depositor under the Trust
Agreement, desires to assign, transfer and convey all of its right, title and
interest in the Trust (the "Depositor's Interest") to the Substitute Depositor,
and the Original Depositor desires to cease to be the depositor of the Trust;
WHEREAS, the Substitute Depositor desires to acquire the Depositor's
Interest currently held by the Original Depositor, and the Substitute Depositor
desires to become the depositor of the Trust; and
WHEREAS, the undersigned, being the Original Depositor, the Substitute
Depositor and all the Trustees of the Trust, to accomplish the foregoing, desire
to amend the Trust Agreement in the manner set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and obligations
contained herein, the parties, intending to be legally bound, hereby agree as
follows:
1. Assignment. Notwithstanding any provision in the Trust Agreement to
the contrary, for value received, the receipt and sufficiency of which are
hereby acknowledged, upon the
execution of this Assignment and Amendment Agreement by the parties hereto, the
Original Depositor does hereby assign, transfer and convey the Depositor's
Interest to the Substitute Depositor.
2. Substitution. Notwithstanding any provision in the Trust Agreement to
the contrary, contemporaneously with the assignment described in Section 1 of
this Assignment and Amendment Agreement, the Substitute Depositor shall become
the depositor of the Trust and shall have all rights, powers and obligations of
the Depositor (as such term is used in the Trust Agreement) under the Trust
Agreement.
3. Cessation. Notwithstanding any provision in the Trust Agreement to the
contrary, immediately following the Substitute Depositor becoming the depositor
of the Trust, the Original Depositor shall cease to be the depositor of the
Trust, and shall thereupon cease to have any right, obligation or power as the
depositor of the Trust.
4. Continuation of the Trust. The parties hereto agree that (i) the
assignment of the Depositor's Interest, the Substitute Depositor becoming the
depositor of the Trust and the Original Depositor's ceasing to be the depositor
of the Trust shall not dissolve the Trust and (ii) the business of the Trust
shall continue without dissolution.
5. Successors and Assigns. This Assignment and Amendment Agreement shall
be binding upon, and shall enure to the benefit of, the parties hereto and their
respective successors and assigns.
6. Full Force and Effect. Except to the extent modified hereby, the Trust
Agreement shall remain in full force and effect.
7. Counterparts. This Assignment and Amendment Agreement may be executed
in counterparts, all of which together shall constitute one agreement binding on
all parties hereto, notwithstanding that all such parties are not signatories to
the original or same counterpart.
8. Governing Law. This Assignment and Amendment Agreement shall be
interpreted in accordance with the laws of the State of Delaware (without regard
to conflict of laws principles), all rights and remedies being governed by such
laws.
9. Effectiveness of Amendment. This Assignment and Amendment Agreement
shall become a legally effective and binding instrument as of the date hereof.
[SIGNATURE PAGES FOLLOW]
A-2-63
IN WITNESS WHEREOF, the undersigned have executed this Assignment and
Amendment Agreement as of the day and year first above written.
ACE LIMITED,
as Original Depositor
By: __________________________________
Name:
Title:
ACE INA HOLDINGS INC.,
as Substitute Depositor
By: __________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but solely as
trustee of the Trust
By: _________________________________
Name:
Title:
BANK ONE DELAWARE, INC.,
not in its individual capacity but solely as
trustee of
the Trust
By: ________________________________
Name:
Title:
____________________________________
ROBERT A. BLEE, not in his individual
capacity but solely as trustee of the Trust
A-2-64
EXHIBIT B
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
PERTAINING TO THE TRUST ORIGINATED PREFERRED SECURITIES
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: John C. Drennan
General Counsel's Officer
Re: ACE Capital Trust I 8.875% Trust Originated Preferred Securities
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 ACE
Capital Trust I 8.875% Trust Originated Preferred Securities (the "Preferred
Securities") of ACE Capital Trust I, a Delaware business trust (the "Issuer"),
governed by an Amended and Restated Trust Agreement among ACE INA Holdings Inc.
("ACE INA"), Bank One Trust Company, National Association, as Property Trustee,
Bank One Delaware, Inc., as Delaware Trustee, and the Administrative Trustees
named therein (the "Trust Agreement"). The payment of distributions on the
Preferred Securities, and payments due upon liquidation of the Issuer or
redemption of the Preferred Securities, to the extent the Issuer has funds
available for the payment thereof are guaranteed by ACE Limited, a Cayman
Islands company and the parent of ACE INA ("ACE"), to the extent set forth in
the Preferred Securities Guarantee Agreement, dated December 20, 1999, between
ACE and Bank One Trust Company, National Association, as Guarantee Trustee. ACE
INA, ACE and the Issuer propose to sell the Preferred Securities to certain
Underwriters (the "Underwriters") pursuant to an Underwriting Agreement, dated
December 15, 1999, by and among the Underwriters, the Issuer, ACE INA and ACE
and the Underwriters wish to take delivery of the Preferred Securities through
DTC. Bank One Trust Company, National Association 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
Underwrites, which is expected to occur on or about December 20, 1999 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 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 the Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
(2) The Trust Agreement 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
B-66
7 Hanover Square, 23rd Floor
New York, New York 10004-2695.
The Issuer or the Transfer Agent and Registrar shall confirm DTC's receipt
of such telecopy by telephoning the Dividend Department at (212) 709-1270.
(5) In the event of a redemption by the Issuer of the Preferred Securities,
notice specifying the terms of the redemption and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC
not less than 30 calendar days prior to such event by a secure means in the
manner set forth in paragraph 4. Such redemption notice shall be sent to DTC's
Call Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of
such notice shall be confirmed by telephoning (516) 227-4070. Notice by mail or
by any other means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719.
(6) In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to DTC by
a secure means and in a timely manner as described in paragraph 4. Notices to
DTC pursuant to this paragraph and notices of other 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 ACE
Capital Trust I 8.875% Trust Originated Preferred Securities.
(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
B-67
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.
(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 of 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.
B-68
(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 ACE Capital Trust I.
Very truly yours,
ACE CAPITAL TRUST I,
as Issuer
By:
Name:
Administrative Trustee
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Transfer Agent and Registrar
By:
Name:
Title:
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:________________________________
Authorized Officer
B-69
EXHIBIT C
[FORM OF COMMON SECURITY CERTIFICATE]
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN
THE TRUST AGREEMENT (AS DEFINED BELOW)
Certificate Number Number of Common Securities
CS-____________
Certificate Evidencing Common Securities
of
ACE CAPITAL TRUST I
___ % Common Securities
(liquidation amount $25 per Common Security)
ACE CAPITAL TRUST I, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that ACE INA Holdings Inc.
(the "Holder") is the registered owner of ___________________ (_________) common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the ______% Common Securities (liquidation amount
$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 December __, 1999, 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. Capitalized terms used but not defined
herein shall have the meaning given them in the Trust Agreement. The Holder is
entitled to the benefit of the Common Securities Guarantee Agreement, dated as
of December __, 1999 (the "Common Securities Guarantee"). The Sponsor will
provide a copy of the Trust Agreement and the Common Securities 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 and to the benefits of the
Common Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal income
tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial
ownership in the Debentures.
C-71
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ___ day of December, 1999.
ACE CAPITAL TRUST I
By: _________________________
Name:
Administrative Trustee
C-72
[FORM OF REVERSE OF SECURITY]
Distributions on each Common Security will be payable at a rate per annum
of ___% (the "Distribution Rate") of the Liquidation Amount of $25 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one
quarterly period will bear additional distributions thereon compounded quarterly
at the applicable periodic Distribution Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein, includes any such
additional distributions unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Property Trustee has funds legally
available therefor.
Distributions on the Common Securities will be cumulative, will accumulate
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from December __, 1999, to but excluding the
related Distribution Date (as defined herein) or any date fixed for redemption
(a "Redemption Date"), and will be payable quarterly in arrears on ___________,
___________, ___________ and ____________ of each year, commencing ___________,
2000 (each, a "Distribution Date"), except as otherwise described below and in
the Trust Agreement. The amount of Distributions payable for any Distribution
Period will be computed on the basis of a 360-day year consisting of twelve 30-
day months. "Distribution Period" means the period from and including the
immediately preceding Distribution Date (or December __, 1999, in the case of
the first Distribution Period) to but excluding the applicable Distribution Date
or Redemption Date. If a Distribution Date is not a Business Day, then such
Distribution Date and the first day of the Distribution Period commencing on
such Distribution Date will be the next succeeding Business Day and no interest
or other payment in respect of any such delay shall accumulate for the period to
but excluding such Business Day. However, if the next succeeding Business Day
is in the next calendar year, payment of Distributions will be made on the
immediately preceding Business Day.
As long as no event of default has occurred and is continuing under the
Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 20 consecutive
quarterly periods (each, an "Extension Period"), provided that an Extension
Period must end on an interest payment date for the Debentures and may not
extend beyond the stated maturity date or Redemption Date for the Debentures.
As a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate with
additional interest thereon (to the extent permitted by applicable law but not
at a rate greater than the rate at which interest is then accruing on the
Debentures) at the Distribution Rate then in effect compounded quarterly during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions, may not exceed 20 consecutive
quarterly periods, must end on an interest payment date for the Debentures and
may not extend beyond the maturity date or Redemption Date of the Debentures.
At the end of the Extension Period, all accumulated and unpaid Distributions
(but only to the extent payments are made in
C-73
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds legally available therefor) will be payable to the
Holders as they appear on the books and records of the Trust on the record date
immediately preceding the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the foregoing
requirements.
The Common Securities shall be redeemable as provided in the Trust
Agreement.
C-74
EXHIBIT D
FORM OF AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of December 20, 1999, between ACE Limited, a Cayman
Islands company ("ACE"), and ACE Capital Trust I, a Delaware statutory business
trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from ACE INA Holdings Inc., a Delaware
corporation and a wholly-owned subsidiary of ACE ("ACE INA"), and to issue and
sell 8.875% Trust Originated Preferred Securities (the "Preferred Securities")
with such powers, preferences and special rights and restrictions as are set
forth in the Amended and Restated Trust Agreement of the Trust dated as of
December 20, 1999, as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, ACE INA will directly or indirectly own all of the Common
Securities of the Trust and will issue the Debentures;
WHEREAS, ACE will guarantee the obligations of ACE INA under the Debentures
and has agreed to guarantee certain expenses and liabilities of the Trust as
provided herein;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase ACE hereby agrees shall benefit ACE and
which purchase ACE acknowledges will be made in reliance upon the execution and
delivery of this Agreement, ACE and Trust hereby agree as follows:
ARTICLE I
Section 1.1. Guarantee by ACE.
Subject to the terms and conditions hereof, ACE 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 one which there are no
Beneficiaries remaining; provided, however, that this Agreement shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
holder
D-75
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 between ACE, in its capacity as guarantor with
respect to the Preferred Securities, and Bank One Trust Company, National
Association, 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.
ACE hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and ACE hereby waives presentment,
demand for payment, protest, notices 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 ACE 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;
(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, ACE with respect to the happening of any of the
foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against ACE, and ACE
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against ACE.
Section 1.6. Subrogation.
ACE shall be subrogated to all (if any) rights of the Trust in respect of
any amounts paid to the Beneficiaries by ACE under this Agreement; provided,
however, that ACE shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise
D-76
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 ACE and shall
inure to the benefit of the Beneficiaries.
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities are
outstanding, this Agreement shall not be modified or amended in any manner
adverse to such Beneficiary or to the holders of the Preferred Securities.
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):
ACE Capital Trust I
c/o ACE USA Inc.
Six Concourse Parkway
Suite 2500
Atlanta, Georgia 30328
Facsimile:
Attention:
ACE Limited
The ACE Building
30 Woodbourne Avenue
Hamilton 08
Bermuda
Facsimile:
Attention:
D-77
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.
THIS AGREEMENT is executed as of the day and year first above written.
ACE LIMITED
By:
Name:
Title:
ACE CAPITAL TRUST I
By:
Name:
Title:
D-78
EXHIBIT E
[FORM OF PREFERRED SECURITY CERTIFICATE]
[IF THIS PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS
PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO
TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY
OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE
OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE CLEARING AGENCY TO ACE 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 CLEARING AGENCY AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
E-79
Certificate Number Number of Preferred Securities
PS-____________
CUSIP NO. __________
Certificate Evidencing Preferred Securities
of
ACE CAPITAL TRUST I
___% Trust Originated Preferred Securities
(liquidation amount $25 per Preferred Security)
ACE CAPITAL TRUST I, a statutory business trust organized under the laws of
the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of __________ (__________) preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the ACE Capital Trust I ___% Trust Originated
Preferred Securities (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 represented hereby are set
forth in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of
the Amended and Restated Trust Agreement of the Trust, dated as of December __,
1999, as the same may be amended from time to time (the "Trust Agreement"),
including the designation of the terms of the Preferred Securities as set forth
therein. Capitalized terms used but not defined herein shall have the meaning
given them in the Trust Agreement. The Holder is entitled to the benefit of the
Preferred Securities Guarantee Agreement entered into by ACE Limited, a Cayman
Islands company, and Bank One Trust Company, National Association, as guarantee
trustee, dated as of December __, 1999 (the "Preferred Securities Guarantee"),
to the extent provided therein. The Trust will provide a copy of the Trust
Agreement and the Preferred Securities 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 and to the benefits of the
Preferred Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States Federal income
tax purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of indirect beneficial ownership in the Debentures.
E-80
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ___ day of December, 1999.
ACE CAPITAL TRUST I
By: ________________________
Name:
Administrative Trustee
E-81
[FORM OF REVERSE OF SECURITY]
Distributions on each Preferred Security will be payable at a rate per
annum of ____ % (the "Distribution Rate") of the Liquidation Amount of $25 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarterly period will bear additional distributions thereon
compounded quarterly at the applicable periodic Distribution Rate (to the extent
permitted by applicable law). The term "Distributions," as used herein,
includes any such additional distributions unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds legally available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from December __, 1999, to but excluding the
related Distribution Date (as defined herein) or any date fixed for redemption
(a "Redemption Date") and will be payable quarterly in arrears on ________,
_________, ________ and _________ of each year, commencing ___________, 2000
(each, a "Distribution Date"), except as otherwise described below and in the
Trust Agreement. The amount of Distributions payable for any Distribution
Period will be computed on the basis of a 360-day year consisting of twelve 30-
day months. "Distribution Period" means the period from and including the
immediately preceding Distribution Date (or December __, 1999, in the case of
the first Distribution Period) to but excluding the applicable Distribution Date
or Redemption Date. If a Distribution Date is not a Business Day, then such
Distribution Date and the first day of the Distribution Period commencing on
such Distribution Date will be the next succeeding Business Day and no interest
or other payment in respect of such delay shall accumulate for the period to but
excluding such Business Day. However, if the next succeeding Business Day is in
the next calendar year, payment of the Distributions will be made on the
immediately preceding Business Day.
As long as no event of default has occurred and is continuing under the
Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 20 consecutive
quarterly periods (each, an "Extension Period"), provided that an Extension
Period must end on an interest payment date for the Debentures and may not
extend beyond the stated maturity date or Redemption Date for the Debentures.
As a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate with
additional interest thereon (to the extent permitted by applicable law but not
at a rate greater than the rate at which interest is then accruing on the
Debentures) at the Distribution Rate then in effect compounded quarterly during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions, may not exceed 20 consecutive
quarterly periods, must end on an interest payment date for the Debentures and
may not extend beyond the maturity date or Redemption Date of the Debentures.
At the end of the Extension Period, all accumulated and unpaid Distributions
(but only to the extent payments are made in
E-82
respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor) will be payable to the Holders as
they appear on the books and records of the Trust on the record date immediately
preceding the end of the Extension Period. Upon the termination of any Extension
Period (or any extension period thereof) and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
foregoing requirements.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
E-83
ASSIGNMENT
_____________________
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer
this Preferred Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee**: ___________________________________
-----------------------
** Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
E-84
Dates Referenced Herein and Documents Incorporated by Reference
5 Subsequent Filings that Reference this Filing
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