As filed with the Securities and Exchange
Commission on June 21, 2004
Registration Nos.
333-
333- -01
333- -02
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Valero Energy Corporation
VEC Trust III
VEC Trust IV
(Exact name of each registrant as specified in
its charter)
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Delaware
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74-1828067
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Delaware
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75-6637349
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Delaware
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75-6637350
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Nos.)
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One Valero Way
San Antonio, Texas 78249
(210) 345-2000
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Jay D. Browning, Esq.
Vice President and Secretary
One Valero Way
San Antonio, Texas 78249
(210) 345-2000
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(Address, including zip code, and telephone
number,
including area code, of each registrant’s principal
executive office)
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(Name, address, including zip code, and
telephone
number, including area code, of agent for service for each
registrant)
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Copy to:
R. Joel Swanson, Esq.
Baker Botts L.L.P.
One Shell Plaza
910 Louisiana
Houston, Texas 77002-4995
(713) 229-1234
Approximate date
of commencement of proposed sale to the
public:
From time to time after the
effective date of this Registration Statement.
If the only
securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please
check the following
box.
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If any of the
securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the “Securities
Act”), other than securities offered only in connection
with dividend or interest reinvestment plans, check the
following
box.
þ
If this Form is
filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
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If this Form is a
post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.
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If delivery of the
prospectus is expected to be made pursuant to Rule 434,
please check the following
box.
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(Continued on next page)
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
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Proposed Maximum
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Title of Each Class of
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Aggregate Offering
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Amount of
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Securities to be Registered
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Price(1), (2), (3)
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Registration Fee
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Senior Debt Securities and Subordinated Debt
Securities of Valero Energy Corporation
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Common Stock ($0.01 par value) of Valero
Energy Corporation (4)
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Preferred Stock ($0.01 par value) of Valero
Energy Corporation
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Warrants of Valero Energy Corporation
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Stock Purchase Contracts of Valero Energy
Corporation
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Stock Purchase Units of Valero Energy Corporation
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Preferred Securities of VEC Trust III and
VEC Trust IV
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Guarantees of Preferred Securities of VEC
Trust III and VEC Trust IV by Valero Energy Corporation
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TOTAL
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$3,500,000,000
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$443,450(5)
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(1)
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Estimated solely for the purpose of calculating
the registration fee pursuant to Rule 457(o) under the
Securities Act and exclusive of accrued interest, distributions
and dividends, if any. The aggregate initial offering price of
all securities issued from time to time pursuant to this
registration statement shall not exceed $3,500,000,000 or the
equivalent thereof in foreign currencies, foreign currency units
or composite currencies. If any debt securities are issued at an
original issue discount, then the offering price shall be in
such greater principal amount as shall result in an aggregate
initial offering price of up to $3,500,000,000 or the equivalent
thereof in foreign currencies, foreign currency units or
composite currencies, less the dollar amount of any securities
previously issued hereunder. Any securities registered hereunder
may be sold separately or as units with other securities
registered hereunder.
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(2)
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There is being registered hereunder such
indeterminate number or amount of senior and subordinated debt
securities, common stock, preferred stock, warrants, stock
purchase contracts and stock purchase units of Valero Energy
Corporation and preferred securities of VEC Trust III and
VEC Trust IV as may from time to time be issued at
indeterminate prices and as may be issuable upon conversion,
redemption, exchange, exercise or settlement of any securities
registered hereunder, including under any applicable
antidilution provisions. Senior debt securities and subordinated
debt securities may be issued and sold to VEC Trust III and
VEC Trust IV, in which event such debt securities may later
be distributed to the holders of preferred securities upon a
dissolution of VEC Trust III and VEC Trust IV and the
distribution of their assets.
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(3)
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Valero Energy Corporation is also registering
under this registration statement all guarantees and other
obligations that it may have with respect to preferred
securities that may be issued by VEC Trust III and VEC
Trust IV. No separate consideration will be received for
the guarantees or any other such obligations.
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(4)
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Each share of common stock includes one preferred
share purchase right. No separate consideration is payable for
the preferred share purchase rights. The registration fee for
these securities is included in the fee for the common stock.
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(5)
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Valero Energy Corporation, VEC Trust III and
VEC Trust IV previously filed with the Securities and
Exchange Commission on March 22, 2002, a registration
statement on Form S-3 (Registration Nos. 333-84820,
333-84820-01 and 333-84820-02) for the registration of
$3,500,000,000 of securities. Unsold securities having an
aggregate initial offering price of $100,010,000 remain under
such registration statement. The filing fee paid by the
registrants in connection with the remaining unsold securities
under such prior registration statement is offset, pursuant to
Rule 457(p) under the Securities Act, against the filing
fee due in connection with this registration statement,
resulting in a net paid filing fee of $434,250.
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The registrants
hereby amend this registration statement on such date or dates
as may be necessary to delay its effective date until the
registrants shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities
Act, or until the registration statement shall become effective
on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Explanatory Note
The registration statement contains two forms of
prospectuses to be used in connection with offerings of the
following securities:
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(1) Debt securities (consisting of senior
debt securities and subordinated debt securities), common stock,
preferred stock and warrants of Valero Energy Corporation.
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(2) Preferred securities of VEC
Trust III or VEC Trust IV, debt securities (consisting
of senior debt securities and subordinated debt securities),
common stock, stock purchase contracts and stock purchase units
of Valero Energy Corporation and guarantees by Valero Energy
Corporation of preferred securities that may be issued by VEC
Trust III and VEC Trust IV.
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Under the shelf process, we may offer any
combination of the securities described in these two
prospectuses in one or more offerings with a total initial
offering price of up to $3,500,000,000.
The information in this
prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted.
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SUBJECT TO COMPLETION DATED
JUNE 21, 2004
PROSPECTUS
$3,500,000,000
Senior Debt Securities
Subordinated Debt Securities
Common Stock
Preferred Stock
Warrants
Valero Energy Corporation
One Valero Way
San Antonio, Texas 78249
(210) 345-2000
The Offering
We may offer from
time to time:
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Senior debt securities
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Subordinated debt securities
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Common stock
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Preferred stock
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Warrants
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We will provide the
specific terms of the securities in one or more supplements to
this prospectus. You should read this prospectus and the related
prospectus supplement carefully before you invest in our
securities. Our common stock is listed on the New York Stock
Exchange under the symbol “VLO.”
Investing
in the securities involves risks. See “Risk Factors”
beginning on page 4.
Neither the
Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus
is ,
2004.
TABLE OF CONTENTS
This prospectus is part of a registration
statement we filed with the Securities and Exchange Commission.
You should rely only on the information we have provided or
incorporated by reference in this prospectus or any prospectus
supplement. We have not authorized anyone to provide you with
additional or different information. We are not making an offer
of these securities in any jurisdiction where the offer is not
permitted. You should assume that the information in this
prospectus or any prospectus supplement is accurate only as of
the date on the front of the document and that any information
we have incorporated by reference is accurate only as of the
date of the document incorporated by reference.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement that we have filed with the Securities and Exchange
Commission using a “shelf” registration process. The
registration statement also includes a prospectus under which
VEC Trust III and VEC Trust IV, two trusts we have
established, may offer from time to time preferred securities
guaranteed by us and we may offer our related senior debt
securities or subordinated debt securities, which securities may
be convertible into our common stock, and our stock purchase
contracts or stock purchase units. Under the shelf process, we
may offer any combination of the securities described in these
two prospectuses in one or more offerings with a total initial
offering price of up to $3,500,000,000. This prospectus provides
you with a general description of the senior debt securities,
subordinated debt securities, common stock, preferred stock and
warrants we may offer. Each time we use this prospectus to offer
securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering.
The prospectus supplement may also add, update or change
information contained in this prospectus. Please carefully read
this prospectus and the prospectus supplement together with the
additional information described under the heading “Where
You Can Find More Information.”
References in this prospectus to the terms
“we,” “us,” “our” or
“Valero” or other similar terms mean Valero Energy
Corporation, unless we state otherwise or the context indicates
otherwise.
ABOUT VALERO ENERGY CORPORATION
We are a Fortune 500 company based in
San Antonio, Texas with approximately 20,000 employees and
annual revenues of approximately $38 billion. We currently
own and operate 15 refineries having a combined throughput
capacity of approximately 2.4 million barrels per day. Our
refining network extends from eastern Canada to the
U.S. Gulf Coast and West Coast and includes the island of
Aruba. We produce premium, environmentally clean products, such
as reformulated gasoline, gasoline meeting the specifications of
the California Air Resources Board, or CARB, CARB diesel fuel,
low-sulfur diesel fuel and oxygenates (liquid hydrocarbon
compounds containing oxygen). We also produce a substantial
slate of conventional gasolines, distillates, jet fuel, asphalt
and petrochemicals.
We are also a leading marketer of refined
products. We market branded and unbranded refined products on a
wholesale basis in the United States and Canada through an
extensive bulk and rack marketing network. We also sell refined
products through a network of more than 4,500 retail and
wholesale branded outlets in the United States, Canada and
Aruba. Our retail operations include approximately
1,600 company-operated sites that sell transportation fuels
and convenience store merchandise. Our primary wholesale and
retail brand names include Diamond Shamrock®,
Shamrock®, Ultramar®, Valero® and Beacon®.
Through agreements with Valero L.P., we also have
access to a logistics system that complements our refining and
marketing assets primarily in the U.S. Gulf Coast, West
Coast and Mid-Continent regions. We own approximately 46%
(including the 2% general partner interest) of Valero L.P., a
master limited partnership that owns and operates crude oil
pipelines, crude oil and intermediate feedstock storage
facilities, and refined product pipelines and terminals
primarily in Texas, California, Oklahoma, New Mexico, Colorado
and New Jersey. Publicly traded limited partner units of Valero
L.P. are listed on the New York Stock Exchange under the symbol
“VLI.”
We were incorporated in Delaware in 1981 as
Valero Refining and Marketing Company, a wholly owned subsidiary
of our predecessor company. On July 31, 1997, our stock was
distributed, or spun off, by our predecessor company to its
stockholders, and we changed our name to Valero Energy
Corporation. Our common stock is listed for trading on the New
York Stock Exchange under the symbol “VLO.”
We have our principal executive offices at One
Valero Way, San Antonio, Texas 78249, and our telephone
number is (210) 345-2000.
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RISK FACTORS
You should carefully consider the following
matters, in addition to the other information we have provided
in this prospectus, the accompanying prospectus supplement and
the documents we incorporate by reference, before reaching a
decision regarding an investment in our securities.
Our financial results are affected by volatile
refining margins.
Our financial results are primarily affected by
the relationship, or margin, between refined product prices and
the prices for crude oil and other feedstocks. The cost to
acquire our feedstocks and the price at which we can ultimately
sell refined products depend upon numerous factors beyond our
control. Historically, refining margins have been volatile, and
they are likely to continue to be volatile in the future.
Earnings on a fully diluted basis for 2002 and 2003 were
$0.83 per share and $5.09 per share, respectively. The
significant fluctuation in our earnings between 2002 and 2003
was primarily related to refining margins.
Compliance with and changes in environmental
laws could adversely affect our performance.
We are subject to extensive federal, state and
local environmental laws and regulations, including those
relating to the discharge of materials into the environment,
waste management, pollution prevention measures and
characteristics and composition of gasoline and diesel fuels. If
we violate or fail to comply with these laws and regulations, we
could be fined or otherwise sanctioned. Because environmental
laws and regulations are increasingly becoming more stringent
and new environmental laws and regulations are continuously
being enacted or proposed, such as those relating to methyl
tertiary butyl ether (MTBE), CARB gasoline, the Tier II
gasoline and distillate standards and the Maximum Available
Control Technology rule (MACT II rule) under the Clean Air
Act, the level of future expenditures required for environmental
matters could increase in the future. In addition, any major
upgrades in any of our refineries could require material
additional expenditures to comply with environmental laws and
regulations.
In February 2000, the Environmental Protection
Agency’s “Tier II” gasoline standard was
published in final form under the Clean Air Act. The standard
requires the sulfur content in gasoline to be reduced from
approximately 300 parts per million to 30 parts per
million. The regulation is being phased in from 2004 to 2006. In
addition, the EPA finalized its Tier II distillate standard
to reduce the sulfur content of diesel fuel sold to highway
consumers by 97%, from 500 parts per million to
15 parts per million, beginning June 1, 2006. We have
determined that modifications will be required at most of our
refineries as a result of the Tier II standards. We believe
that the Tier II specifications will require approximately
$1.5 billion in capital expenditures through 2006 for our
refineries to comply, of which approximately $550 million
had been expended through March 31, 2004. The aggregate
estimate of expenditures includes amounts related to projects at
two of our refineries to provide hydrogen as part of the process
of removing sulfur from gasoline and diesel. We expect that such
estimates will change as additional engineering is completed and
progress is made toward construction of these various projects.
We expect all modifications to be complete in time for
compliance with the effective dates of the gasoline and
distillate standards.
Disruption of our ability to obtain crude oil
could adversely affect our operations.
About 70% of our total crude oil feedstock
requirements are purchased through term crude oil feedstock
contracts. The remainder of our crude oil feedstock requirements
are purchased on the spot market. All of our contracts provide
for market-based pricing that fluctuates based on prevailing
commodity prices. The term agreements include contracts to
purchase feedstocks from various foreign national oil companies
and various international and domestic integrated oil companies.
In particular, a significant portion of our feedstock
requirements are satisfied through suppliers located in the
Middle East, and we are, therefore, subject to the political,
geographic and economic risks attendant to doing business with
suppliers located in that area. In the event one or more of our
term contracts were terminated or political events disrupted our
traditional crude oil supply, it is possible that we would be
unable to find alternative sources of supply. If we are unable
to obtain adequate crude oil volumes or are only able to
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obtain such volumes at unfavorable prices, our
results of operations could be materially adversely affected,
including reduced sales volumes of refined products or reduced
margins as a result of higher crude oil costs.
Competitors who produce their own supply of
feedstocks, who have more extensive retail outlets or who have
greater financial resources may have a competitive
advantage.
The refining and marketing industry is highly
competitive with respect to both feedstock supply and refined
product markets. We compete with numerous other companies for
available supplies of crude oil and other feedstocks and for
outlets for our refined products. We do not produce any of our
crude oil feedstocks. Many of our competitors, however, obtain a
significant portion of their feedstocks from company-owned
production and some have more extensive retail outlets than we
do. Competitors that have their own production or extensive
retail outlets (and brand-name recognition) are at times able to
offset losses from refining operations with profits from
producing or retailing operations, and may be better positioned
to withstand periods of depressed refining margins or feedstock
shortages.
A number of our competitors also have materially
greater financial and other resources than we possess. Such
competitors have a greater ability to bear the economic risks
inherent in all phases of the industry. In addition, we compete
with other industries that provide alternative means to satisfy
the energy and fuel requirements of our industrial, commercial
and individual consumers.
A significant interruption in one or more of
our refineries could adversely affect our business.
With the acquisition of the Aruba refinery and
certain related businesses, our refining activities are
conducted at fifteen major refineries in Texas, Louisiana, New
Jersey, California, Oklahoma, Colorado, Quebec, Canada and the
island of Aruba located in the Caribbean Sea. The refineries are
our principal operating assets. As a result, our operations
could be subject to significant interruption if one or more of
the refineries were to experience a major accident, be damaged
by severe weather or other natural disaster, or otherwise be
forced to shut down. If any refinery were to experience an
interruption in operations, earnings therefrom could be
materially adversely affected, including as a result of lost
production and repair costs.
We may be unable to compete successfully with
other companies in the retail sector.
The retail sector has become increasingly
competitive. We face strong competition from the fully
integrated major oil companies that have increased their efforts
to capture retail market share in recent years. We also compete
with large grocery stores and other general merchandisers (the
so-called “hypermarts”) that often sell gasoline at
aggressively competitive prices in order to attract customers to
their sites. A number of our competitors also have materially
greater financial and other resources than we possess. The
actions of our competitors could lead to lower prices and
reduced margins, which could have a material adverse effect on
our financial position.
Our operations expose us to many operating
risks, not all of which are insured.
Our refining and marketing operations are subject
to various hazards common to the industry, including explosions,
fires, toxic emissions, maritime hazards and uncontrollable
flows of oil and gas. They are also subject to the additional
hazards of loss from severe weather conditions. As protection
against operating hazards, we maintain insurance coverage
against some, but not all, such potential losses. We may not be
able to maintain or obtain insurance of the type and amount we
desire at reasonable rates. As a result of market conditions,
premiums and deductibles for certain of our insurance policies
have increased substantially, and could escalate further. In
some instances, certain insurance could become unavailable or
available only for reduced amounts of coverage. For example,
insurance carriers are now requiring broad exclusions for losses
due to war risk and terrorist acts. If we were to incur a
significant liability for which we were not fully insured, it
could have a material adverse effect on our financial position.
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Pending or future litigation involving the
manufacture or use of MTBE could adversely affect us.
We are defendants in more than 60 cases
pending in 16 states alleging MTBE contamination in
groundwater. The plaintiffs in these cases are generally water
providers, governmental authorities and private well owners
alleging that refiners and suppliers of gasoline containing MTBE
are liable for manufacturing or distributing a defective
product. The suits generally seek individual, unquantified
compensatory and punitive damages and attorneys’ fees.
Almost all of these cases, in which Valero has been named along
with many other refining industry companies, have been filed
since September 30, 2003 in anticipation of a pending
federal energy bill that may contain provisions for MTBE
liability protection. Although we believe that we have several
strong defenses to these claims and intend to vigorously defend
the lawsuits, an adverse result in one or more of these suits is
reasonably possible. An adverse result in all or substantially
all of these cases could have a material adverse effect on our
results of operations and financial position.
We may not be successful in continuing to grow
through acquisitions, and any further acquisitions may require
us to obtain additional financing or could result in
dilution.
A substantial portion of our growth over the last
several years has been attributable to acquisitions. The ability
to continue to grow through acquisitions will be dependent on a
number of factors, including our ability to:
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identify acceptable acquisition candidates
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consummate acquisitions on favorable terms
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obtain financing to support our growth
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successfully integrate acquired businesses
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We may not be successful in continuing to grow
through acquisitions. In addition, the financing of future
acquisitions may require us to incur additional indebtedness,
which could limit our financial flexibility, or to issue
additional equity, which could result in further dilution of the
ownership interest of existing stockholders.
Provisions in our corporate documents and
Delaware law could delay or prevent a change in our
control.
The existence of some provisions in our corporate
documents and Delaware law could delay or prevent a change in
control of us, even if that change might be beneficial to our
stockholders. In addition, we have adopted a stockholder rights
plan that would cause extreme dilution to any person or group
who attempts to acquire a significant interest in us without
advance approval of our board of directors. Delaware law imposes
additional restrictions on mergers and other business
combinations between us and any holder of 15% or more of our
outstanding common stock.
A patent dispute with Unocal could adversely
affect us.
Union Oil Company of California has filed a
patent infringement lawsuit against us in California federal
court. The complaint seeks a 5.75 cent per gallon royalty
on all reformulated gasoline infringing on Unocal patents that
cover certain compositions of cleaner-burning gasoline. The
complaint seeks treble damages for our alleged willful
infringement of Unocal’s patents and our alleged conduct to
induce others to infringe the patents. In a previous lawsuit
involving one of its patents, Unocal prevailed against five
other major refiners. In 2001, the Federal Trade Commission, or
the FTC, began an antitrust investigation concerning
Unocal’s conduct with a joint industry research group and
regulators during the time that Unocal was prosecuting its
patents at the U.S. Patent and Trademark Office, or the
PTO. In 2003, the FTC filed a complaint against Unocal for
antitrust violations. The FTC’s complaint sought an
injunction against any future enforcement activity by Unocal
related to the patents that are the subject of this lawsuit. In
November 2003, an administrative law judge dismissed the
FTC’s case against Unocal, which the FTC staff appealed to
the full FTC. The FTC has not yet ruled on that appeal. The PTO
has
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reexamined Unocal’s patents, and has issued
notices of rejection of all claims of the patents. These
rejections are subject to additional proceedings, including
administrative appeal by Unocal, followed by an appeal in
federal district court or the court of appeals. Ultimate
invalidation would preclude Unocal from pursuing claims based on
the patents. Unocal’s patent lawsuit against us is
indefinitely stayed as a result of the PTO reexamination
proceedings. However, due to the inherent uncertainty of
litigation, there can be no assurance that we will prevail in
the lawsuit, and an adverse result could have a material adverse
effect on our results of operations and financial position.
Our leverage may limit our financial
flexibility.
As of March 31, 2004, we had total debt of
approximately $4.9 billion, stockholders’ equity of
approximately $6.4 billion, and cash and temporary cash
investments of $239.0 million. Under our revolving bank
credit facilities, at March 31, 2004, our
debt-to-capitalization ratio (net of cash) was approximately 42%
as is more fully described in our quarterly report on
Form 10-Q/A for the quarterly period ended March 31,
2004 incorporated by reference herein. We may also incur
additional indebtedness in the future, including in connection
with acquisitions, although our ability to do so will be
restricted by existing bank credit facilities. The level of our
indebtedness will have several important effects on our future
operations, including, among others:
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a significant portion of our cash flow from
operations will be dedicated to the payment of principal and
interest on our indebtedness and will not be available for other
purposes
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covenants contained in our existing debt
arrangements require us to meet certain financial tests, which
may affect our flexibility in planning for, and reacting to,
changes in our business, including possible acquisition
opportunities
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our ability to obtain additional financing for
working capital, capital expenditures, acquisitions, general
corporate and other purposes may be limited
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we may be at a competitive disadvantage to our
competitors that are less leveraged
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our vulnerability to adverse economic and
industry conditions may increase
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Our ability to meet our debt service obligations
and to reduce our total indebtedness will be dependent upon our
future performance, which will be subject to general economic
conditions, industry cycles and financial, business and other
factors affecting our operations, many of which are beyond our
control. We cannot assure you that our business will continue to
generate sufficient cash flow from operations to service our
indebtedness. If we are unable to generate sufficient cash flow
from operations, we may be required to sell assets, to refinance
all or a portion of our indebtedness or to obtain additional
financings. Such refinancing might not be possible and
additional financing might not be available on commercially
acceptable terms or at all.
Our bank credit facilities impose financial and
other restrictions on us. Covenants contained in the credit
facilities and relating to certain of our other indebtedness
limit, among other things, our ability and our
subsidiaries’ ability to incur funded indebtedness and
require maintenance of a minimum coverage ratio and a maximum
debt-to-capitalization ratio. Failure to comply with such
covenants may result in a default with respect to the related
debt under the credit facilities or such other indebtedness and
could lead to acceleration of such debt or any instruments
evidencing indebtedness that contain cross-acceleration or
cross-default provisions. In such a case, we might not be able
to refinance or otherwise repay such indebtedness.
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CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
This prospectus and the accompanying prospectus
supplement, including the information we incorporate by
reference, contain certain estimates, predictions, projections,
assumptions and other “forward-looking statements” (as
defined in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934) that
involve various risks and uncertainties. While these
forward-looking statements, and any assumptions upon which they
are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results
will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions, or other
future performance suggested in this report. These
forward-looking statements can generally be identified by the
words “anticipate,” “believe,”
“expect,” “plan,” “intend,”
“estimate,” “project,” “budget,”
“forecast,” “will,” “could,”
“should,” “may” and similar expressions.
These forward-looking statements include, among other things,
statements regarding:
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future refining margins, including gasoline and
heating oil margins
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future retail margins, including gasoline,
diesel, home heating oil and convenience store merchandise
margins
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expectations regarding feedstock costs, including
crude oil discounts, and operating expenses
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anticipated levels of crude oil and refined
product inventories
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our anticipated level of capital investments,
including deferred refinery turnaround and catalyst costs and
capital expenditures for environmental and other purposes, and
the effect of those capital investments on our results of
operations
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anticipated trends in the supply of and demand
for crude oil and other feedstocks and refined products in the
United States, Canada and elsewhere
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expectations regarding environmental and other
regulatory initiatives
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the effect of general economic and other
conditions on refining and retail industry fundamentals
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Our forward-looking statements are based on our
beliefs and assumptions derived from information available at
the time the statements are made. Differences between actual
results and any future performance suggested in these
forward-looking statements could result from a variety of
factors, including, but not limited to, those described under
the heading “Risk Factors” and the following:
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acts of terrorism aimed at either our facilities
or other facilities that could impair our ability to produce
and/or transport refined products or receive foreign feedstocks
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political conditions in crude oil producing
regions, including the Middle East and South America
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the domestic and foreign supplies of refined
products such as gasoline, diesel fuel, jet fuel, home heating
oil and petrochemicals
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the domestic and foreign supplies of crude oil
and other feedstocks
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the ability of the members of the Organization of
Petroleum Exporting Countries (OPEC) to agree on and to
maintain crude oil price and production controls
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the level of consumer demand, including seasonal
fluctuations
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refinery overcapacity or undercapacity
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the actions taken by competitors, including both
pricing and the expansion and retirement of refining capacity in
response to market conditions
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environmental and other regulations at both the
state and federal levels and in foreign countries
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the level of foreign imports of refined products
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accidents or other unscheduled shutdowns
affecting our refineries, machinery, pipelines or equipment, or
those of our suppliers or customers
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changes in the cost or availability of
transportation for feedstocks and refined products
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the price, availability and acceptance of
alternative fuels and alternative-fuel vehicles
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cancellation of or failure to implement planned
capital projects and realize the various assumptions and
benefits projected for such projects or cost overruns in
constructing such planned capital projects
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earthquakes, hurricanes, tornadoes and irregular
weather, which can unforeseeably affect the price or
availability of natural gas, crude oil and other feedstocks and
refined products
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rulings, judgments or settlements in litigation
or other legal or regulatory matters, including unexpected
environmental remediation costs in excess of any reserves or
insurance coverage
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the introduction or enactment of federal or state
legislation which may adversely affect our business or operations
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changes in the credit ratings assigned to our
debt securities and trade credit
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changes in the value of the Canadian dollar
relative to the U.S. dollar
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overall economic conditions
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Any one of these factors, or a combination of
these factors, could materially affect our future results of
operations and whether any forward-looking statements ultimately
prove to be accurate. Our forward-looking statements are not
guarantees of future performance, and actual results and future
performance may differ materially from those suggested in any
forward-looking statements. We do not intend to update these
statements unless we are required by the securities laws to do
so.
All subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the foregoing. We
undertake no obligation to publicly release the results of any
revisions to any such forward-looking statements that may be
made to reflect events or circumstances after the date of this
report or to reflect the occurrence of unanticipated events.
9
USE OF PROCEEDS
Unless we inform you otherwise in the prospectus
supplement, we expect to use the net proceeds from the sale of
securities for general corporate purposes. These purposes may
include, but are not limited to:
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equity investments in existing and future projects
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permanent financing of bridge facilities used to
make acquisitions
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acquisitions
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working capital
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capital expenditures
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repayment or refinancing of debt or other
corporate obligations
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repurchases and redemptions of securities
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Pending any specific application, we may
initially invest funds in short-term marketable securities or
apply them to the reduction of short-term indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO
OF EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
The following table sets forth the ratio of
earnings to fixed charges and the ratio of earnings to combined
fixed charges and preferred stock dividends for the periods
indicated:
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Three Months
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Years Ended December 31,
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Ended
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March 31, 2004
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2003
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2002
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2001
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2000
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1999
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Ratio of earnings to fixed charges
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4.9x
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3.4x
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1.3x
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7.3x
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5.6x
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1.3x
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Ratio of earnings to combined fixed charges and
preferred stock dividends
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4.6x
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3.4x
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1.3x
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7.3x
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5.6x
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1.3x
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We have computed the ratio of earnings to fixed
charges by dividing earnings by fixed charges. We have computed
the ratio of earnings to combined fixed charges and preferred
stock dividends by dividing earnings by fixed charges and
preferred stock dividends. For these purposes, earnings consist
of consolidated income from continuing operations before income
taxes and fixed charges (excluding capitalized interest), with
certain other adjustments. Fixed charges consist of total
interest, whether expensed or capitalized, including
amortization of debt expense and premiums or discounts related
to outstanding indebtedness, one-third (the proportion deemed
representative of the interest factor) of rental expense and
distributions on preferred securities of subsidiary trusts which
are deducted in the determination of consolidated pre-tax income
from continuing operations.
On July 1, 2003, we issued
10,000,000 shares of our 2% mandatory convertible preferred
stock. Prior to July 1, 2003, we had no preferred or
preference securities outstanding with respect to continuing
operations for any period presented, other than preferred
securities of subsidiary trusts. As a result, the ratio of
earnings to combined fixed charges and preferred stock dividends
for those prior periods is the same as the ratio of earnings to
fixed charges.
10
DESCRIPTION OF DEBT SECURITIES
The debt securities covered by this prospectus
will be our general unsecured obligations. We will issue senior
debt securities under an indenture dated as of June 18,
2004 between us and The Bank of New York, a New York banking
corporation, as trustee. We will issue subordinated debt
securities under an indenture to be entered into between us and
The Bank of New York, as indenture trustee. The indenture for
the senior debt securities and the indenture for the
subordinated debt securities will be substantially identical,
except for the provisions relating to subordination and
restrictive covenants. We sometimes refer to the senior
indenture and the subordinated indenture as the
“indentures.”
We have summarized selected provisions of the
indentures and the debt securities below. This summary is not
complete. For a complete description, we encourage you to read
the indentures. We have filed the senior indenture and the form
of subordinated indenture with the Securities and Exchange
Commission (“SEC”), and we will include the final
subordinated indenture and any other instrument establishing the
terms of any debt securities we offer as exhibits to a filing we
will make with the SEC in connection with that offering. Please
read “Where You Can Find More Information.”
Ranking
The senior debt securities will constitute senior
debt and will rank equally with all of our unsecured and
unsubordinated debt. The subordinated debt securities will be
subordinated to, and thus have a junior position to, the senior
debt securities and all of our other senior debt. Neither
indenture limits the amount of debt securities that can be
issued under that indenture or the amount of additional
indebtedness we or any of our subsidiaries may incur. We may
issue debt securities under either indenture from time to time
in one or more series, each in an amount we authorize prior to
issuance. The trustee will authenticate and deliver debt
securities executed and delivered to it by us as set forth in
the applicable indenture.
We are organized as a holding company that owns
subsidiary companies. Our subsidiary companies conduct
substantially all of our business. The holding company structure
results in two principal risks:
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Our subsidiaries may be restricted by contractual
provisions or applicable laws from providing us the cash that we
need to pay parent company debt service obligations, including
payments on the debt securities
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In any liquidation, reorganization or insolvency
proceeding involving us, your claim as a holder of the debt
securities will be effectively junior to the claims of holders
of any indebtedness or preferred stock of our subsidiaries
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Terms
The prospectus supplement relating to any series
of debt securities we are offering will include specific terms
relating to that offering. These terms will include some or all
of the following:
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whether the debt securities are senior or
subordinated debt securities
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the title of the debt securities
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any limit on the total principal amount of the
debt securities
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the date or dates on which the principal of the
debt securities will be payable
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any interest rate, or the method of determining
the interest rate, on the debt securities, the date from which
interest will accrue, interest payment dates and record dates
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any right to extend or defer the interest payment
periods and the duration of the extension
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if other than as set forth in this prospectus,
the place or places where payments on the debt securities will
be payable
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any optional redemption provisions
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any sinking fund or other provisions that would
obligate us to redeem or purchase the debt securities
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any provisions for the remarketing of the debt
securities
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any changes or additions to the events of default
or covenants
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whether we will issue the debt securities in
individual certificates to each holder in registered or bearer
form, or in the form of temporary or permanent global securities
held by a depositary on behalf of holders
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the denominations in which we will issue the debt
securities, if other than denominations of an integral multiple
of $1,000
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the terms of any right to convert debt securities
into shares of our common stock or other securities or property
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whether payments on the debt securities will be
payable in foreign currency or currency units (including
composite currencies) or another form
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any provisions that would determine the amount of
principal, premium, if any, or interest, if any, on the debt
securities by references to an index or pursuant to a formula
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the portion of the principal amount of the debt
securities that will be payable if the maturity is accelerated,
if other than the entire principal amount
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any other terms of the debt securities not
inconsistent with the relevant indentures
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We may sell the debt securities at a discount,
which may be substantial, below their stated principal amount.
These debt securities may bear no interest or interest at a rate
that at the time of issuance is below market rates. We will
describe in the prospectus supplement any material United States
federal income tax consequences applicable to those securities.
If we sell any of the debt securities for any
foreign currency or currency unit or if payments on the debt
securities are payable in any foreign currency or currency unit,
we will describe in the prospectus supplement the restrictions,
elections, tax consequences, specific terms and other
information relating to those debt securities and the foreign
currency or currency unit.
Consolidation, Merger and Sale
We have agreed in the indentures that we will
consolidate with or merge into any entity or transfer or dispose
of all or substantially all of our assets to any entity only if:
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we are the continuing corporation, or
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if we are not the continuing corporation, the
successor is organized and existing under the laws of any United
States jurisdiction and assumes all of our obligations under the
indenture and the debt securities, and
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in either case, immediately after giving effect
to the transaction, no default or event of default would occur
and be continuing
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Events of Default
Unless we inform you otherwise in the prospectus
supplement, the following are events of default under the
indentures with respect to a series of debt securities:
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our failure to pay interest on any debt security
of that series for 30 days
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our failure to pay principal of or any premium on
any debt security of that series when due
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our failure to make any sinking fund payment for
any debt security of that series when due
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12
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our failure to perform any of our other covenants
or breach of any of our other warranties in that indenture,
other than a covenant or warranty included in the indenture
solely for the benefit of another series of debt securities, and
that failure continues for 60 days after written notice is
given or received as provided in the indentures
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certain bankruptcy, insolvency or reorganization
events involving us
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any other event of default we may provide for
that series
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If an event of default for any series of debt
securities occurs and is continuing, the trustee or the holders
of at least 25% in principal amount of the outstanding debt
securities of the series affected by the default may declare the
principal amount of all the debt securities of that series to be
due and payable immediately. After any declaration of
acceleration of a series of debt securities, but before a
judgment or decree for payment has been obtained, the event of
default giving rise to the declaration of acceleration will,
without further act, be deemed to have been waived, and such
declaration and its consequences will, without further act, be
deemed to have been rescinded and annulled if:
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we have paid or deposited with the trustee a sum
sufficient to pay
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all overdue interest
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the principal and premium, if any, due otherwise
than by the declaration of acceleration and any interest on such
amounts
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any interest on overdue interest, to the extent
legally permitted
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all amounts due to the trustee under the indenture
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all events of default with respect to that series
of debt securities, other than the nonpayment of the principal
which became due solely by virtue of the declaration of
acceleration, have been cured or waived
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In most cases, the trustee will be under no
obligation to exercise any of its rights or powers under the
indentures at the request or direction of any of the holders,
unless the holders have offered to the trustee indemnity
reasonably satisfactory to the trustee. Subject to this
provision for indemnification, the holders of a majority in
aggregate principal amount of the outstanding debt securities of
any series may direct the time, method and place of:
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conducting any proceeding for any remedy
available to the trustee
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exercising any trust or power conferred on the
trustee, with respect to the debt securities of that series
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Each indenture requires us to furnish to the
trustee annually a statement as to our performance of certain of
our obligations under the indenture and as to any default in
performance.
Modification and Waiver
We may modify or amend each of the indentures
without the consent of any holders of the debt securities in
certain circumstances, including to:
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evidence the assumption of our obligations under
the indenture and the debt securities by a successor
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add further covenants for the protection of the
holders
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cure any ambiguity or correct any inconsistency
in the indenture, so long as such action will not adversely
affect the interests of the holders
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establish the form or terms of debt securities of
any series
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evidence the acceptance of appointment by a
successor trustee
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13
We may modify or amend each indenture with the
consent of the holders of a majority in principal amount of the
outstanding debt securities of each series issued under the
indenture affected by the modification or amendment. Without the
consent of the holder of each outstanding debt security
affected, however, no modification may:
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change the stated maturity of the principal of,
or any installment of interest on, any debt security
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reduce the principal amount of, the interest on,
or the premium payable on, any debt security
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reduce the amount of principal of discounted debt
securities payable upon acceleration of maturity
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change the place of payment or the currency in
which any debt security is payable
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impair the right to institute suit for the
enforcement of any payment on any debt security
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reduce quorum or voting rights
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The holders of a majority in aggregate principal
amount of the outstanding debt securities of each series may
waive past defaults by us under the indentures with respect to
the debt securities of that series only. Those holders may not,
however, waive any default in any payment on any debt security
of that series or compliance with a provision that cannot be
modified or amended without the consent of each holder affected.
Discharge
We will be discharged from all obligations of any
series of debt securities, except for certain surviving
obligations to register the transfer or exchange of the debt
securities and any right by the holders to receive additional
amounts under the indentures if:
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all debt securities of that series previously
authenticated and delivered under the relevant indenture have
been delivered to the trustee for cancellation or
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all debt securities of that series have become
due and payable or will become due and payable within one year,
at maturity or by redemption, and we deposit with the trustee,
in trust, sufficient money to pay the entire indebtedness of all
the debt securities of that series on the dates the payments are
due in accordance with the terms of the debt securities
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To exercise the right of deposit described above,
we must deliver to the trustee an opinion of counsel and an
officers’ certificate stating that all conditions precedent
to the satisfaction and discharge of the relevant indenture have
been complied with.
Form, Exchange, Registration and
Transfer
Unless we inform you otherwise in the prospectus
supplement, we will issue the debt securities only in fully
registered form, without coupons, in denominations of $1,000 and
integral multiples.
Debt securities will be exchangeable for other
debt securities of the same series, the same total principal
amount and the same terms in such authorized denominations as
may be requested. Holders may present debt securities for
registration of transfer at the office of the security registrar
or any transfer agent we designate. The security registrar or
transfer agent will effect the transfer or exchange when it is
satisfied with the documents of title and identity of the person
making the request. We will not charge a service charge for any
transfer or exchange of the debt securities. We may, however,
require payment of any tax or other governmental charge payable
for the registration of the transfer or exchange.
We will appoint the trustee under each indenture
as security registrar for the debt securities issued under that
indenture. We are required to maintain an office or agency for
transfers and exchanges in each place of payment. We may at any
time designate additional transfer agents for any series of debt
securities.
14
We will not be required:
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to issue, register the transfer of or exchange
debt securities of a series during a period beginning 15
business days prior to the day of mailing of a notice of
redemption of debt securities of that series selected for
redemption and ending on the close of business on the day of
mailing of the relevant notice or
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to register the transfer of or exchange any debt
security, or portion of any debt security, called for
redemption, except the unredeemed portion of any debt security
we are redeeming in part
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Payment and Paying Agents
Unless we inform you otherwise in the prospectus
supplement, principal and interest will be payable, and the debt
securities will be transferable and exchangeable, at the office
or offices of the applicable trustee or any paying agent we
designate. At our option, we will pay interest on the debt
securities by check mailed to the holder’s registered
address or by wire transfer for global debt securities. Unless
we inform you otherwise in a prospectus supplement, we will make
interest payments to the persons in whose name the debt
securities are registered at the close of business on the record
date for each interest payment date.
In most cases, the trustee and paying agent will
repay to us upon written request any funds held by them for
payments on the debt securities that remain unclaimed for two
years after the date upon which that payment has become due.
After payment to us, holders entitled to the money must look to
us for payment.
Book-Entry and Settlement
We may issue the debt securities of a series in
the form of one or more global debt securities that would be
deposited with a depositary or its nominee identified in the
prospectus supplement. The prospectus supplement will describe:
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any circumstances under which beneficial owners
may exchange their interests in a global debt security for
certificated debt securities of the same series with the same
total principal amount and the same terms
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the manner in which we will pay principal of and
any premium and interest on a global debt security
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the terms of any depositary arrangement and the
rights and limitations of owners of beneficial interests in any
global debt security
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Notices
Notices to holders will be given by mail to the
addresses of such holders as they appear in the security
register.
Governing Law
New York law will govern each indenture and the
debt securities.
The Trustee
The Bank of New York is the trustee under our
senior indenture. Its address is 101 Barclay Street,
Floor 21 West, New York, New York 10286. As of
March 31, 2004, The Bank of New York serves as trustee
for our senior unsecured notes and bonds aggregating
approximately $4.0 billion and receives customary fees for
its services. The Bank of New York also will serve as
trustee under the subordinated indenture. Please read
“About This Prospectus.”
15
The holders of a majority in principal amount of
the outstanding debt securities of any series issued under each
indenture will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy
available to the trustee, subject to certain exceptions. If an
event of default occurs and is continuing, the trustee will be
required in the exercise of its powers to use the degree of care
and skill of a prudent person in the conduct of his own affairs.
The trustee will be obligated to exercise any of its rights or
powers under the relevant indenture at the request of any
holders of debt securities of any series issued under that
indenture only after those holders have offered the trustee
indemnity reasonably satisfactory to it. The trustee may resign
at any time or the holders of a majority in principal amount of
the debt securities may remove the trustee. If the trustee
resigns, is removed or becomes incapable of acting as trustee or
if a vacancy occurs in the office of the trustee for any reason,
we will appoint a successor trustee in accordance with the
provisions of the applicable indenture.
If the trustee becomes one of our creditors, it
will be subject to limitations in the indenture on its rights to
obtain payment of claims or to realize on certain property
received for any claim, as security or otherwise. The trustee
may engage in other transactions with us. If, however, it
acquires any conflicting interest, it must eliminate that
conflict or resign as required under the indenture.
Subordination Under the Subordinated
Indenture
Under the subordinated indenture, payment of the
principal, interest and any premium on the subordinated debt
securities will generally be subordinated and junior in right of
payment to the prior payment in full of all senior debt as
defined in the subordinated indenture. Unless we inform you
otherwise in the prospectus supplement, for purposes of this
indenture “senior debt” will mean all indebtedness,
including guarantees, of Valero, unless the indebtedness states
that it is not senior to the subordinated debt securities.
Unless we inform you otherwise in the prospectus
supplement, we may not make any payment of principal of,
interest on, or any premium on, the subordinated debt securities
if:
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we fail to pay the principal, interest, premium
or any other amounts on any senior debt when due or
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we default in performing any other covenant (a
“covenant default”) in any senior debt that we have
designated if the covenant default allows the holders of that
senior debt to accelerate the maturity of the senior debt they
hold
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The subordination does not affect our obligation,
which is absolute and unconditional, to pay, when due, the
principal of and any premium and interest on the subordinated
debt securities. In addition, the subordination does not prevent
the occurrence of any default under the subordinated indenture.
The subordinated indenture will not limit the
amount of senior debt that we may incur. As a result of the
subordination of the subordinated debt securities, if we became
insolvent, holders of subordinated debt securities may receive
less on a proportionate basis than other creditors.
Restrictive Covenants in the Senior
Indenture
We have agreed to two principal restrictions on
our activities for the benefit of holders of the senior debt
securities. Unless waived or amended, the restrictive covenants
summarized below will apply to a series of debt securities
issued under the senior indenture as long as any of those debt
securities is outstanding, unless the prospectus supplement for
the series states otherwise. We have used in this summary
description terms that we have defined below under
“— Glossary.”
We have agreed that when any senior debt
securities are outstanding neither we nor any of our
subsidiaries will create or assume any liens upon any of our
receivables or other assets or any asset, stock
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or indebtedness of any of our subsidiaries unless
those senior debt securities are secured equally and ratably
with or prior to the debt secured by the lien. This covenant has
exceptions that permit:
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subject to certain limitations, any lien created
to secure all or part of the purchase price of any property or
to secure a loan made to finance the acquisition of the property
described in such lien
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subject to certain limitations, any lien existing
on any property at the time of its acquisition or created not
later than 12 months thereafter
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subject to certain limitations, any lien created
in connection with the operation or use of any property acquired
or constructed by us and created within 12 months after the
acquisition, construction or commencement of full operations on
the property
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any mechanic’s or materialmen’s lien or
any lien related to workmen’s compensation or other
insurance
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any lien arising by reason of deposits with or
the giving of any form of security to any governmental agency,
including for taxes and other governmental charges
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liens for taxes or charges which are not
delinquent or are being contested in good faith
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any judgment lien the execution of which has been
stayed or which has been adequately appealed and secured
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any lien incidental to the conduct of our
business which was not incurred in connection with the borrowing
of money or the obtaining of advances or credit and which does
not materially interfere with the conduct of our business
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any intercompany lien
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liens incurred in connection with the borrowing
of funds, if such funds are used within 120 days to repay
indebtedness of at least an equal amount secured by a lien on
our property having a fair market value at least equal to the
fair market value of the property securing the new lien
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any lien created to secure indebtedness and
letter of credit reimbursement obligations incurred in
connection with the extension of working capital financing
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any lien existing on the date of the indenture
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subject to an aggregate limit of
$200 million, any lien on cash, cash equivalents or other
account holdings securing derivative obligations
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subject to an aggregate limit of 10% of our
consolidated net tangible assets, any liens not otherwise
permitted by any of the other exceptions set forth in the
indenture
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Limitations on Sale/Leaseback
Transactions
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We have agreed that neither we nor our
subsidiaries will enter into any sale/ leaseback transactions
with regard to any principal property, providing for the leasing
back to us or a subsidiary by a third party for a period of more
than three years of any asset which has been or is to be sold or
transferred by us or such subsidiary to such third party or to
any other person. This covenant has exceptions that permit
transactions of this nature under the following circumstances:
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we would be entitled, pursuant to the
“Limitations on Liens” covenant described above, to
incur indebtedness secured by a lien on the property to be
leased, without equally and ratably securing the senior debt
securities then outstanding or
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within 120 days of the effective date of
such sale/ leaseback transaction, we apply an amount equal to
the value of such transaction:
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to the voluntary retirement of funded debt or
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to the purchase of another principal property
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In addition, subject to a limit (on an aggregated
basis with indebtedness secured by liens permitted by the
limitations on liens covenant described above) of 10% of our
consolidated net tangible assets, we can enter into sale/
leaseback transactions not otherwise permitted by the express
provisions of the indenture.
We define the following terms in the senior
indenture. We use them here with the same definitions. Generally
accepted accounting principles should be used to determine all
items in this section, unless otherwise indicated.
“Consolidated net tangible assets”
means the total amount of assets shown on a consolidated balance
sheet of us and our subsidiaries (excluding goodwill and other
intangible assets), less all current liabilities (excluding
notes payable, short-term debt and current portion of long-term
debt and capital lease obligations).
“Funded debt” means generally any
indebtedness for money borrowed, created, issued, incurred,
assumed or guaranteed which would be classified as long-term
debt or capital lease obligations.
“Principal Property” means any of our
or our subsidiaries’ refineries or refinery-related assets,
distribution facilities or other real property which has a net
book value exceeding 2.5% of consolidated net tangible assets,
but not including any property which in our opinion is not
material to our and our subsidiaries’ total business
conducted as an entirety or any portion of a particular property
that is similarly found not to be material to the use or
operation of such property.
“Subsidiary” means any entity of which
at the time of determination we or one or more of our
subsidiaries owns or controls directly or indirectly more than
50% of the shares of voting stock or the outstanding partnership
or similar interests and any limited partnership (i) of
which we or any one of our subsidiaries are a general partner
and (ii) which is consolidated with us for financial
reporting purposes.
DESCRIPTION OF CAPITAL STOCK
We have summarized selected aspects of our
capital stock below. The summary is not complete. For a complete
description, you should refer to our restated certificate of
incorporation, restated by-laws, certificates of designation and
the Rights Agreement, dated as of July 17, 1997 between us
and Computershare Investor Services, LLC, as successor rights
agent to Harris Trust and Savings Bank, as amended, all of which
are exhibits to the registration statement of which this
prospectus is a part.
Our authorized capital stock consists of:
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300,000,000 shares of common stock, par
value $0.01 per share
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20,000,000 shares of preferred stock, par
value $0.01 per share, issuable in series
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Common Stock
Each share of common stock is entitled to
participate equally in dividends as and when declared by our
board of directors. The payment of dividends on our common stock
may be limited by obligations we may have to holders of any
preferred stock. For information regarding restrictions on
payments of dividends, see below and the prospectus supplement
applicable to any issuance of common stock.
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Common stockholders are entitled to one vote for
each share held on all matters submitted to them. The common
stock does not have cumulative voting rights, meaning that
holders of a majority of the shares of common stock voting for
the election of directors can elect all the directors if they
choose to do so.
If we liquidate or dissolve our business, the
holders of common stock will share ratably in the distribution
of assets available for distribution to stockholders after
creditors are paid and preferred stockholders receive their
distributions. The shares of common stock have no preemptive
rights and are not convertible, redeemable or assessable or
entitled to the benefits of any sinking fund.
All issued and outstanding shares of common stock
are fully paid and nonassessable. Any shares of common stock we
offer under this prospectus will be fully paid and nonassessable.
The common stock is listed on the New York Stock
Exchange and trades under the symbol “VLO.”
Preferred Stock
Our board of directors can, without action by
stockholders, issue one or more series of preferred stock. The
board can determine for each series the number of shares,
designation, relative voting rights, dividend rates, liquidation
and other rights, preferences and limitations. In some cases,
the issuance of preferred stock could delay or discourage a
change in control of us.
The prospectus supplement relating to any series
of preferred stock we are offering will include specific terms
relating to the offering. These terms will include some or all
of the following:
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the title of the preferred stock
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the maximum number of shares of the series
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the dividend rate or the method of calculating
the dividend, the date from which dividends will accrue and
whether dividends will be cumulative
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any liquidation preference
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any redemption provisions
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any sinking fund or other provisions that would
obligate us to redeem or purchase the preferred stock
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any terms for the conversion or exchange of the
preferred stock for other securities of us or any other entity
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any voting rights
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any other preferences and relative,
participating, optional or other special rights or any
qualifications, limitations or restrictions on the rights of the
shares
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Any shares of preferred stock we issue will be
fully paid and nonassessable.
Our board of directors has reserved for issuance
pursuant to our Stockholder Rights Plan described below a total
of 1,500,000 shares of Junior Participating Preferred
Stock, Series I. We have not issued any shares of the
Junior Participating Preferred Stock, Series I at the date
of this prospectus.
Additionally on July 1, 2003, we issued
10,000,000 shares of our 2% mandatory convertible preferred
stock (liquidation preference $25 per share)
(“Convertible Preferred Stock”) in connection with our
acquisition of Orion Refining Corporation’s refinery
located in St. Charles Parish, Louisiana. The Convertible
Preferred Stock will automatically convert to our common stock
on July 1, 2006. Holders of the Convertible Preferred Stock
are entitled to vote with the holders of common stock on all
matters. Each share of Convertible Preferred Stock is entitled
to a vote equal to the mandatory conversion ratio in effect on
the record date for any such vote. The mandatory conversion
ratio ranges from 0.4955 to 0.6690 based on the market value of
our common stock and is subject to adjustment in certain
circumstances. We
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pay annual dividends on each share of Convertible
Preferred Stock in the amount of $0.50 when, as and if declared
by our board of directors. Dividends will be paid quarterly,
provided that dividends will not accrue or be payable with
respect to a particular calendar quarter if we do not declare a
dividend on our common stock during that calendar quarter. The
Convertible Preferred Stock will rank with respect to dividend
rights and rights upon our liquidation, winding-up or
dissolution as follows: (i) senior to all common stock and
to all of our other capital stock issued in the future that
ranks junior to the Convertible Preferred Stock; (ii) on a
parity with any of our capital stock issued in the future the
terms of which expressly provide that it will rank on a parity
with the Convertible Preferred Stock; and (iii) junior to
all of our capital stock the terms of which expressly provide
that such capital stock will rank senior to the Convertible
Preferred Stock.
Anti-Takeover Provisions
The provisions of Delaware law and our restated
certificate of incorporation and our restated by-laws summarized
below may have an anti-takeover effect and may delay, defer or
prevent a tender offer or takeover attempt that a stockholder
might consider in his or her best interest, including those
attempts that might result in a premium over the market price
for the common stock.
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Staggered Board of Directors
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Our board of directors is divided into three
classes that are elected for staggered three-year terms. The
classification of the board of directors has the effect of
requiring at least two annual stockholder meetings, instead of
one, to effect a change in control of the board of directors.
Holders of 60% of the shares of common stock entitled to vote in
the election of directors may remove a director for cause, but
stockholders may not remove any director without cause.
Our restated certificate of incorporation
contains a fair price provision. Mergers, consolidations and
other business combinations involving us and an “interested
stockholder” require the approval of holders of at least
66 2/3% of our outstanding voting stock not owned by the
interested stockholder. Interested stockholders include any
holder of 15% or more of our outstanding voting stock. The
66 2/3% voting requirement does not apply, however, if the
“continuing directors,” as defined in our restated
certificate of incorporation, approve the business combination,
or the business combination meets other specified conditions.
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Liability of Our Directors
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As permitted by the Delaware corporation statute,
we have included in our restated certificate of incorporation a
provision that limits our directors’ liability for monetary
damages for breach of their fiduciary duty of care to us and our
stockholders. The provision does not affect the liability of a
director:
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for any breach of his/her duty of loyalty to us
or our stockholders
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for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law
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for the declaration or payment of unlawful
dividends or unlawful stock repurchases or redemptions
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for any transaction from which the director
derived an improper personal benefit
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This provision also does not affect a
director’s responsibilities under any other laws, such as
the federal securities laws or state or federal environmental
laws.
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Stockholder Proposals and Director
Nominations
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Our stockholders can submit stockholder proposals
and nominate candidates for our board of directors if the
stockholders follow advance notice procedures described in our
restated by-laws.
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Generally, stockholders must submit a written
notice between 60 and 90 days before the first anniversary
of the date of our previous year’s annual
stockholders’ meeting. To nominate directors, the notice
must include the name and address of the stockholder, the class
and number of shares owned by the stockholder, information about
the nominee required by the SEC and a description of any
arrangements or understandings with respect to the election of
directors that exist between the stockholder and any other
person. To make stockholder proposals, the notice must include a
description of the proposal, the reasons for bringing the
proposal before the meeting, the name and address of the
stockholder, the class and number of shares owned by the
stockholder and any material interest of the stockholder in the
proposal.
In each case, if we have changed the date of the
annual meeting to more than 30 days before or 60 days
after the anniversary date of our previous year’s annual
stockholders’ meeting, stockholders must submit the notice
between 60 and 90 days prior to such annual meeting or no
later than 10 days after the day we make public the date of
the annual meeting.
Director nominations and stockholder proposals
that are late or that do not include all required information
may be rejected. This could prevent stockholders from bringing
certain matters before an annual meeting, including making
nominations for directors.
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Delaware Anti-takeover
Statute
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We are a Delaware corporation and are subject to
Section 203 of the Delaware General Corporation Law. In
general, Section 203 prevents us from engaging in a
business combination with an “interested stockholder”
(generally, a person owning 15% or more of our outstanding
voting stock) for three years following the time that person
becomes a 15% stockholder unless one of the following is
satisfied:
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before that person became a 15% stockholder, our
board of directors approved the transaction in which the
stockholder became a 15% stockholder or approved the business
combination
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upon completion of the transaction that resulted
in the stockholder’s becoming a 15% stockholder, the
stockholder owns at least 85% of our voting stock outstanding at
the time the transaction began (excluding stock held by
directors who are also officers and by employee stock plans that
do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer)
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after the transaction in which that person became
a 15% stockholder, the business combination is approved by our
board of directors and authorized at a stockholders’
meeting by at least two-thirds of the outstanding voting stock
not owned by the 15% stockholder.
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Under Section 203, these restrictions also
do not apply to certain business combinations proposed by a 15%
stockholder following the disclosure of an extraordinary
transaction with a person who was not a 15% stockholder during
the previous three years or who became a 15% stockholder with
the approval of a majority of our directors. This exception
applies only if the extraordinary transaction is approved or not
opposed by a majority of our directors who were directors before
any person became a 15% stockholder in the previous three years,
or the successors of these directors.
Our restated certificate of incorporation also
provides that:
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stockholders may act only at an annual or special
meeting and not by written consent
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an 80% vote of the outstanding voting stock is
required for the stockholders to amend our restated by-laws
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an 80% vote of the outstanding voting stock is
required to amend our restated certificate of incorporation with
respect to certain matters, including those described in the
first two bullet points above
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Transfer Agent and Registrar
Computershare Investor Services, LLC, is our
transfer agent and registrar.
Stockholder Rights Plan
We have a stockholder rights plan under which one
preferred share purchase right is attached to each outstanding
share of our common stock. The rights become exercisable under
specified circumstances, including any person or group (an
“acquiring person”) becoming the beneficial owner of
15% or more of our outstanding common stock, subject to
specified exceptions. Each right entitles the registered holder
to purchase from us one one-hundredth of a share of Junior
Participating Preferred Stock, Series I, at an exercise
price of $100, subject to adjustment under specified
circumstances. If events specified in the stockholder rights
plan occur, each holder of rights other than the acquiring
person can exercise their rights. When a holder exercises a
right, the holder will be entitled to receive common stock
valued at twice the exercise price of the right. In some cases,
the holder will receive cash, property or other securities
instead of common stock. We may redeem the rights for
$0.01 per right at any time prior to the tenth day after a
person or group becomes an acquiring person.
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DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt
securities, common stock, preferred stock or other securities.
We may issue warrants independently or together with other
securities. Warrants sold with other securities may be attached
to or separate from the other securities. We will issue warrants
under one or more warrant agreements between us and a warrant
agent that we will name in the prospectus supplement.
The prospectus supplement relating to any
warrants we are offering will include specific terms relating to
the offering. These terms will include some or all of the
following:
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the title of the warrants
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the aggregate number of warrants offered
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the designation, number and terms of the debt
securities, common stock, preferred stock or other securities
purchasable upon exercise of the warrants and procedures by
which those numbers may be adjusted
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the exercise price of the warrants
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the dates or periods during which the warrants
are exercisable
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the designation and terms of any securities with
which the warrants are issued
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if the warrants are issued as a unit with another
security, the date on and after which the warrants and the other
security will be separately transferable
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if the exercise price is not payable in
U.S. dollars, the foreign currency, currency unit or
composite currency in which the exercise price is denominated
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any minimum or maximum amount of warrants that
may be exercised at any one time
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any terms relating to the modification of the
warrants
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any terms, procedures and limitations relating to
the transferability, exchange or exercise of the warrants
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The description in the prospectus supplement will
not necessarily be complete, and reference will be made to the
warrant agreements which will be filed with the SEC.
PLAN OF DISTRIBUTION
We may sell the offered securities in and outside
the United States (a) through underwriters or dealers,
(b) directly to purchasers, including our affiliates,
(c) through agents or (d) through a combination of any
of these methods. The prospectus supplement will include the
following information:
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the terms of the offering
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the names of any underwriters or agents
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the name or names of any managing underwriter or
underwriters
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the purchase price of the securities from us
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the net proceeds to us from the sale of the
securities
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any delayed delivery arrangements
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any underwriting discounts, commissions and other
items constituting underwriters’ compensation
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any initial public offering price
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any discounts or concessions allowed or reallowed
or paid to dealers
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any commissions paid to agents
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Sale Through Underwriters or Dealers
If we use underwriters in the sale, the
underwriters will acquire the securities for their own account.
The underwriters may resell the securities from time to time in
one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at
the time of sale. Underwriters may offer securities to the
public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more firms
acting as underwriters. Unless we inform you otherwise in the
prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain conditions,
and the underwriters will be obligated to purchase all the
offered securities if they purchase any of them. The
underwriters may change from time to time any initial public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers.
During and after an offering through
underwriters, the underwriters may purchase and sell the
securities in the open market. These transactions may include
overallotment and stabilizing transactions and purchases to
cover syndicate short positions created in connection with the
offering. The underwriters also may impose a penalty bid, which
means that selling concessions allowed to syndicate members or
other broker-dealers for the offered securities sold for their
account may be reclaimed by the syndicate if the offered
securities are repurchased by the syndicate in stabilizing or
covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the offered securities,
which may be higher than the price that might otherwise prevail
in the open market. If commenced, the underwriters may
discontinue these activities at any time.
If we use dealers in the sale of securities, we
will sell the securities to them as principals. They may then
resell those securities to the public at varying prices
determined by the dealers at the time of resale. The dealers
participating in any sale of the securities may be deemed to be
underwriters within the meaning of the Securities Act of 1933
with respect to any sale of these securities. We will include in
the prospectus supplement the names of the dealers and the terms
of the transaction.
Direct Sales and Sales Through
Agents
We may sell the securities directly. In that
event, no underwriters or agents would be involved. We may also
sell the securities through agents we designate from time to
time. In the prospectus supplement, we will name any agent
involved in the offer or sale of the offered securities, and we
will describe any commissions payable by us to the agent. Unless
we inform you otherwise in the prospectus supplement, any agent
will agree to use its reasonable best efforts to solicit
purchases for the period of its appointment.
We may sell the securities directly to
institutional investors or others who may be deemed to be
underwriters within the meaning of the Securities Act of 1933
with respect to any sale of those securities. We will describe
the terms of any such sales in the prospectus supplement.
Delayed Delivery Contracts
If we so indicate in the prospectus supplement,
we may authorize agents, underwriters or dealers to solicit
offers from certain types of institutions to purchase securities
from us at the public offering price under delayed delivery
contracts. These contracts would provide for payment and
delivery on a specified date in the future. The contracts would
be subject only to those conditions described in the prospectus
supplement. The prospectus supplement will describe the
commission payable for solicitation of those contracts.
Remarketing
We may offer and sell any of the offered
securities in connection with a remarketing upon their purchase,
in accordance with a redemption or repayment by their terms or
otherwise by one or more remarketing firms acting as principals
for their own accounts or as our agents. We will identify any
remarketing firm, the terms of any remarketing agreement and the
compensation to be paid to the
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remarketing firm in the prospectus supplement.
Remarketing firms may be deemed underwriters under the
Securities Act of 1933.
Derivative Transactions
We may enter into derivative transactions with
third parties, or sell securities not covered by this prospectus
to third parties in privately negotiated transactions. If the
applicable prospectus supplement indicates, in connection with
those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement,
including in short sale transactions. If so, the third parties
may use securities pledged by us or borrowed from us or others
to settle those sales or to close out any related open
borrowings of stock, and may use securities received from us in
settlement of those derivatives to close out any related open
borrowings of stock. The third parties in such sale transactions
will be underwriters and, if not identified in this prospectus,
will be identified in the applicable prospectus supplement (or a
post-effective amendment).
We or one of our affiliates also may loan or
pledge securities to a financial institution or other third
party, who may in turn sell the securities pursuant to this
prospectus and the applicable prospectus supplement. Such
financial institution or third party may transfer its short
position to investors in our securities or in connection with a
simultaneous offering of other securities offered by this
prospectus and the applicable prospectus supplement or otherwise.
General Information
We may have agreements with the agents, dealers
and underwriters to indemnify them against certain civil
liabilities, including liabilities under the Securities Act of
1933, or to contribute with respect to payments that the agents,
dealers or underwriters may be required to make. Agents, dealers
and underwriters may be customers of, engage in transactions
with or perform services for us in the ordinary course of their
businesses.
LEGAL MATTERS
Mr. Jay D. Browning, Esq., our Vice
President and Corporate Secretary, will issue opinions about the
legality of the offered securities for us. Mr. Browning is
our employee and at March 31, 2004, beneficially owned
approximately 19,215 shares of our common stock (including
shares held under employee benefit plans) and held options under
our employee stock option plans to purchase an additional
35,699 shares of our common stock. None of such shares or
options were granted in connection with the offering of the
securities. Any underwriters will be advised about other issues
relating to any offering by their own legal counsel.
EXPERTS
The consolidated financial statements of Valero
Energy Corporation and subsidiaries at December 31, 2003
and 2002, and for each of the years then ended, appearing in
Valero Energy Corporation’s Annual Report on Form 10-K
for the year ended December 31, 2003, have been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements of Valero
Energy Corporation and subsidiaries for the year ended
December 31, 2001, appearing in Valero Energy
Corporation’s Annual Report on Form 10-K for the year
ended December 31, 2003, have been audited by Arthur
Andersen LLP, independent public accountants, as set forth in
their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
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The financial statements of Orion Refining
Corporation appearing in Valero Energy Corporation’s
Current Report on Form 8-K/A filed August 12, 2003,
have been audited by PricewaterhouseCoopers LLP, independent
registered public accounting firm, as set forth in their report
thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference
in reliance upon such report given on the authority of such firm
as experts in accounting and auditing.
The combined financial statements of the
El Paso Aruba Refining Business appearing in Valero Energy
Corporation’s Current Report on Form 8-K/ A filed
May 10, 2004, have been audited by PricewaterhouseCoopers
LLP, independent registered public accounting firm, as set forth
in their report thereon included therein and incorporated herein
by reference. Such combined financial statements are
incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
MATTERS RELATING TO ARTHUR ANDERSEN
LLP
Arthur Andersen LLP has not consented to the
incorporation by reference of their report in this prospectus,
and we have dispensed with the requirement to file their consent
in reliance upon Rule 437a of the Securities Act of 1933.
Because Arthur Andersen LLP has not consented to the
incorporation by reference of their report in this prospectus,
you will not be able to recover against Arthur Andersen LLP
under Section 11 of the Securities Act of 1933 for any
untrue statement of a material fact contained in the financial
statements audited by Arthur Andersen LLP or any omissions to
state a material fact required to be stated therein.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You can
read and copy any materials we file with the SEC at the
SEC’s public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can obtain information about
the operation of the SEC’s public reference room by calling
the SEC at 1-800-SEC-0330. The SEC also maintains a web site
that contains information we file electronically with the SEC,
which you can access over the Internet at
http://www.sec.gov.
You can obtain information about us
at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
This prospectus is part of a registration
statement we have filed with the SEC relating to the securities
we may offer. As permitted by SEC rules, this prospectus does
not contain all of the information we have included in the
registration statement and the accompanying exhibits and
schedules we file with the SEC. You may refer to the
registration statement, the exhibits and schedules for more
information about us and our securities. The registration
statement, exhibits and schedules are available at the
SEC’s public reference room or through its web site.
INFORMATION WE INCORPORATE BY
REFERENCE
We are incorporating by reference information we
file with the SEC, which means that we are disclosing important
information to you by referring you to those documents. The
information we incorporate by reference is an important part of
this prospectus, and information that we file later with the SEC
automatically will update and supersede this information. We
incorporate by reference the documents listed below and any
future filings we make with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we sell all the securities or after the date on which the
registration statement that includes this prospectus was
initially filed with the SEC and before the effectiveness of
such registration statement:
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our annual report on Form 10-K for the year
ended December 31, 2003
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our quarterly report on Form 10-Q for the
quarterly period ended March 31, 2004, as amended by our
quarterly report on Form 10-Q/ A for the quarterly period
ended March 31, 2004
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the description of our common stock contained in
our registration statement on Form 8-A, as may be amended
from time to time to update that description
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the description of the rights associated with our
common stock contained in our registration statement on
Form 8-A, as may be amended from time to time to update
that description
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our current report on Form 8-K filed with
the SEC on July 15, 2003, as amended by our current reports
on Form 8-K/A filed with the SEC on August 12, 2003
and September 18, 2003
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Item 5 of our current report on
Form 8-K filed with the SEC on February 5, 2004
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our current report on Form 8-K filed with
the SEC on February 11, 2004
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our current report on Form 8-K filed with
the SEC on March 9, 2004, as amended by our current report
on Form 8-K/ A filed with the SEC on May 10, 2004
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our current report on Form 8-K filed with
the SEC on March 12, 2004
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our current report on Form 8-K filed with
the SEC on March 25, 2004
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You may request a copy of these filings (other
than an exhibit to those filings unless we have specifically
incorporated that exhibit by reference into the filing), at no
cost, by writing or telephoning us at the following address:
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Valero Energy Corporation
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One Valero Way
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San Antonio, Texas 78249
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Attention: Investor Relations
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Telephone: (210) 345-2139
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The information in this
prospectus is not complete and may be changed. We may not sell
these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted.
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SUBJECT TO COMPLETION, DATED
JUNE 21, 2004
PROSPECTUS
$3,500,000,000
Senior Debt Securities
Subordinated Debt Securities
Common Stock
Stock Purchase Contracts
Stock Purchase Units
VEC Trust III
VEC Trust IV
Trust Preferred Securities fully and
unconditionally guaranteed,
as described herein, by
Valero Energy Corporation
One Valero Way, San Antonio, Texas 78249 (210)
345-2000
The Trusts
Valero Energy Corporation
formed VEC Trust III and VEC Trust IV for the purpose
of issuing trust preferred securities.
The Offering
Trust Preferred Securities
The trusts may offer from
time to time trust preferred securities representing undivided
beneficial interests in the assets of the issuing trust. The
trusts will use the proceeds from the sale of their trust
preferred securities to purchase Valero’s debt securities.
Debt Securities
Valero may offer from
time to time its debt securities to the trusts. The debt
securities may be distributed to holders of the trust preferred
securities if and when a trust is dissolved. The debt securities
may be convertible into shares of Valero’s common stock.
The debt securities will be unsecured. We will indicate the type
of debt securities to be issued in a prospectus supplement.
Guarantee
Valero will guarantee the
trusts’ payment obligations on the trust preferred
securities as described in this prospectus and the prospectus
supplement. We will provide the specific terms of the guarantee
in a prospectus supplement.
Stock Purchase Contracts
Valero may issue stock
purchase contracts obligating holders to purchase from Valero a
specified number of shares of common stock in the future. The
stock purchase contracts may be issued separately or as a part
of stock purchase units consisting of a stock purchase contract
and debt securities, trust preferred securities or debt
obligations of third parties, including U.S. treasury
securities, securing the holders’ obligations to purchase
common stock under the stock purchase contracts. We will provide
the specific terms of the stock purchase contracts and stock
purchase units in a prospectus supplement.
We will provide the
specific terms of the securities in one or more supplements to
this prospectus. You should read this prospectus and the related
prospectus supplement carefully before you invest in our
securities. Valero’s common stock is listed on the New York
Stock Exchange under the Symbol “VLO.”
Investing in
the securities involves risks. See “Risk Factors”
beginning on page 7.
Neither the Securities
and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The date of this prospectus
is ,
2004.
TABLE OF CONTENTS
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About This Prospectus
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3
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Summary Information — Q&A
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4
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About Valero Energy Corporation
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6
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Risk Factors
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7
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Cautionary Statement Concerning Forward-Looking
Statements
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Use of Proceeds
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13
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Ratio of Earnings to Fixed Charges and Ratio of
Earnings to Combined Fixed Charges and Preferred Stock Dividends
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13
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The Trusts
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Description of the Trust Preferred Securities
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Description of the Trust Preferred Securities
Guarantee
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18
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Description of the Debt Securities
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21
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Relationship Among the Trust Preferred
Securities, the Debt Securities and the Guarantee
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29
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Description of Stock Purchase Contracts and Stock
Purchase Units
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31
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Description of Capital Stock
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31
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Plan of Distribution
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36
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Legal Matters
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38
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Experts
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38
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Matters Relating to Arthur Andersen LLP
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Where You Can Find More Information
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Information We Incorporate by Reference
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39
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This prospectus is part of a registration
statement we filed with the Securities and Exchange Commission.
You should rely only on the information we have provided or
incorporated by reference in this prospectus or any prospectus
supplement. We have not authorized anyone to provide you with
additional or different information. We are not making an offer
of these securities in any jurisdiction where the offer is not
permitted. You should assume that the information in this
prospectus or any prospectus supplement is accurate only as of
the date on the front of the document and that any information
we have incorporated by reference is accurate only as of the
date of the document incorporated by reference.
2
ABOUT THIS PROSPECTUS
This prospectus is part of a registration
statement we have filed with the Securities and Exchange
Commission using a “shelf” registration process. The
registration statement also includes a prospectus under which
Valero may offer from time to time its senior debt securities,
subordinated debt securities, shares of common or preferred
stock and warrants. Under the shelf process, we may offer any
combination of the securities described in these two
prospectuses in one or more offerings with a total initial
offering price of up to $3,500,000,000. This prospectus provides
you with a general description of the trust preferred
securities, the debt securities to be issued by Valero, the
Valero common stock into which the debt securities may be
convertible or which may be issued pursuant to Valero’s
stock purchase contracts, Valero’s guarantee, Valero’s
stock purchase contracts and Valero’s stock purchase units.
Each time we use this prospectus to offer securities, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus
supplement may also add, update or change information contained
in this prospectus. Please carefully read this prospectus and
the prospectus supplement together with the additional
information described under the heading “Where You Can Find
More Information.”
We have not included separate financial
statements of the trusts in this prospectus. We do not consider
that such financial statements are material to holders of the
trust preferred securities because:
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each trust is a newly created special purpose
entity
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neither trust has any operating history or
independent operations
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neither trust is engaged in, nor will it engage
in, any activity other than issuing trust preferred and trust
common securities, investing in and holding Valero’s debt
securities in accordance with its declaration of trust and
engaging in related activities
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Furthermore, the combination of Valero’s
obligations under the debt securities, the associated
indentures, the declarations of trust and the guarantees provide
a full, irrevocable and unconditional guarantee of payments of
distributions and other amounts due on the trust preferred
securities. In addition, we do not expect that the trusts will
file reports with the SEC under the Securities Exchange Act of
1934.
References in this prospectus to the terms
“we,” “us,” “our” or
“Valero” or other similar terms mean Valero Energy
Corporation, unless we state otherwise or the context indicates
otherwise.
3
SUMMARY INFORMATION —
Q&A
This summary provides a brief overview of the
key aspects of the trusts, the trust preferred securities, the
stock purchase contracts and the stock purchase units. The term
“trust” refers to the VEC Trust for the specific
transaction. This summary does not contain all information that
is important to you. We encourage you to read carefully this
prospectus and the prospectus supplement to understand fully the
terms of the securities that are important to you in making a
decision about whether to invest.
What are the trust preferred
securities?
Each trust preferred security represents an
undivided beneficial interest in the assets of a trust. Each
trust preferred security will entitle the holder to receive
distributions as described in this prospectus and the prospectus
supplement.
Who are the trusts?
Each of VEC Trust III and VEC Trust IV
is a Delaware statutory trust. The principal office of each
trust is One Valero Way, San Antonio, Texas 78249, and the
telephone number is (210) 345-2000.
We will own all common securities of each trust.
Each trust will use the proceeds from the sale of the trust
preferred securities and the trust common securities to purchase
a series of our debt securities with substantially the same
financial terms as the trust preferred securities. The debt
securities may be subordinated debt securities or senior debt
securities. We will specify the type of debt security in a
prospectus supplement. The trusts exist only to issue the trust
preferred and trust common securities, invest in and hold our
debt securities in accordance with its declaration of trust and
engage in related activities.
There are five trustees of each trust. Three of
them, referred to as regular trustees, will be our officers or
employees. The Bank of New York will act as the property trustee
of each trust, and The Bank of New York (Delaware) will act as
the Delaware trustee of each trust.
We will provide in the prospectus supplement
additional information about the issuing trust.
When will you receive distributions on the
trust preferred securities?
The only source of cash to make payments on the
trust preferred securities issuable by each trust will be
payments on the debt securities it purchases from us.
If you purchase trust preferred securities, you
are entitled to receive cash distributions at the rate specified
in the prospectus supplement. Unless we inform you otherwise in
the prospectus supplement, distributions will accumulate from
the date the trust issues the trust preferred securities and
will be paid in arrears on the dates we specify in the
prospectus supplement. We may, however, defer distributions as
described below.
When will payment of your distributions be
deferred?
If we defer interest payments on the debt
securities held by a trust, the trust will defer distributions
on the related trust preferred securities. We will describe in
the prospectus supplement any rights to defer distributions on
the trust preferred securities by extending the interest payment
period on the debt securities.
During any deferral period, except as described
on page 19, we will not be permitted to:
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declare or pay a dividend on shares of our
capital stock
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except in limited circumstances, redeem,
purchase, acquire or make a distribution or liquidation payment
on any shares of our capital stock
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make a payment on or repay, repurchase or redeem
any debt that ranks equally with or junior to the debt
securities or
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make a guarantee payment on any guarantee by us
of the debt of any of our subsidiaries if that guarantee ranks
equally with or junior to the debt securities
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What are our guarantees of the trust preferred
securities?
Under our guarantees of the trust preferred
securities, to the extent provided herein, we will irrevocably
and unconditionally guarantee that if we make a payment on the
debt securities to the relevant trust but, for any reason, the
trust does
4
not make the corresponding distribution or
redemption payment to the holders of the related trust preferred
securities, then we will make the payments directly to the
holders of the trust preferred securities.
Our following obligations taken together will
provide a full and unconditional guarantee of payments due on
the trust preferred securities:
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our obligations to make payments on the debt
securities
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our obligations under our guarantees of the trust
preferred securities and our obligations under the amended and
restated declaration of trust, which establishes the terms of
the trust
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We will provide the specific terms of the
guarantees in a prospectus supplement.
When could the debt securities be distributed
to you?
Unless we inform you otherwise in the prospectus
supplement, the holder of the trust common securities has the
right to dissolve the trust at any time. If the trust is
dissolved, after satisfaction of the trust’s creditors, the
trust may distribute debt securities on a proportionate basis to
the holders of trust preferred and trust common securities.
Will the trust preferred securities be listed
on a stock exchange?
If specified in the prospectus supplement, we
will apply to list the trust preferred securities on the stock
exchange specified.
Will holders of the trust preferred securities
have any voting rights?
Generally, the holders of the trust preferred
securities will not have any voting rights.
What are the stock purchase
contracts?
The stock purchase contracts are contracts
obligating holders to purchase from us, and us to sell to the
holders, a specified number of shares of our common stock at a
future date or dates. The price per share of common stock and
the number of shares of common stock may be fixed at the time
the stock purchase contracts are issued or may be determined by
reference to a specific formula set forth in the stock purchase
contracts.
What are the stock purchase units?
Each stock purchase unit consists of a stock
purchase contract and debt securities, trust preferred
securities or debt obligations of third parties, including
U.S. treasury securities, which secure the holders’
obligations to purchase the common stock under the stock
purchase contract.
5
ABOUT VALERO ENERGY CORPORATION
We are a Fortune 500 company based in
San Antonio, Texas with approximately 20,000 employees and
annual revenues of approximately $38 billion. We currently
own and operate 15 refineries having a combined throughput
capacity of approximately 2.4 million barrels per day. Our
refining network extends from eastern Canada to the
U.S. Gulf Coast and West Coast and includes the island of
Aruba. We produce premium, environmentally clean products, such
as reformulated gasoline, gasoline meeting the specifications of
the California Air Resources Board, or CARB, CARB diesel fuel,
low-sulfur diesel fuel and oxygenates (liquid hydrocarbon
compounds containing oxygen). We also produce a substantial
slate of conventional gasolines, distillates, jet fuel, asphalt
and petrochemicals.
We are also a leading marketer of refined
products. We market branded and unbranded refined products on a
wholesale basis in the United States and Canada through an
extensive bulk and rack marketing network. We also sell refined
products through a network of more than 4,500 retail and
wholesale branded outlets in the United States, Canada and
Aruba. Our retail operations include approximately
1,600 company-operated sites that sell transportation fuels
and convenience store merchandise. Our primary wholesale and
retail brand names include Diamond Shamrock®,
Shamrock®, Ultramar®, Valero® and Beacon®.
Through agreements with Valero L.P., we also have
access to a logistics system that complements our refining and
marketing assets primarily in the U.S. Gulf Coast, West
Coast and Mid-Continent regions. We own approximately 46%
(including the 2% general partner interest) of Valero L.P., a
master limited partnership that owns and operates crude oil
pipelines, crude oil and intermediate feedstock storage
facilities, and refined product pipelines and terminals
primarily in Texas, California, Oklahoma, New Mexico, Colorado
and New Jersey. Publicly traded limited partner units of Valero
L.P. are listed on the New York Stock Exchange under the symbol
“VLI.”
We were incorporated in Delaware in 1981 as
Valero Refining and Marketing Company, a wholly owned subsidiary
of our predecessor company. On July 31, 1997, our stock was
distributed, or spun off, by our predecessor company to its
stockholders, and we changed our name to Valero Energy
Corporation. Our common stock is listed for trading on the New
York Stock Exchange under the symbol “VLO.”
We have our principal executive offices at One
Valero Way, San Antonio, Texas 78249, and our telephone
number is (210) 345-2000.
6
RISK FACTORS
You should carefully consider the following
matters, in addition to the other information we have provided
in this prospectus, the accompanying prospectus supplement and
the documents we incorporate by reference, before reaching a
decision regarding an investment in our securities.
Our financial results are affected by volatile
refining margins.
Our financial results are primarily affected by
the relationship, or margin, between refined product prices and
the prices for crude oil and other feedstocks. The cost to
acquire our feedstocks and the price at which we can ultimately
sell refined products depend upon numerous factors beyond our
control. Historically, refining margins have been volatile, and
they are likely to continue to be volatile in the future.
Earnings on a fully diluted basis for 2002 and 2003 were
$0.83 per share and $5.09 per share, respectively. The
significant fluctuation in our earnings between 2002 and 2003
was primarily related to refining margins.
Compliance with and changes in environmental
laws could adversely affect our performance.
We are subject to extensive federal, state and
local environmental laws and regulations, including those
relating to the discharge of materials into the environment,
waste management, pollution prevention measures and
characteristics and composition of gasoline and diesel fuels. If
we violate or fail to comply with these laws and regulations, we
could be fined or otherwise sanctioned. Because environmental
laws and regulations are increasingly becoming more stringent
and new environmental laws and regulations are continuously
being enacted or proposed, such as those relating to methyl
tertiary butyl ether (MTBE), CARB gasoline, the Tier II
gasoline and distillate standards and the Maximum Available
Control Technology rule (MACT II rule) under the Clean Air
Act, the level of future expenditures required for environmental
matters could increase in the future. In addition, any major
upgrades in any of our refineries could require material
additional expenditures to comply with environmental laws and
regulations.
In February 2000, the Environmental Protection
Agency’s “Tier II” gasoline standard was
published in final form under the Clean Air Act. The standard
requires the sulfur content in gasoline to be reduced from
approximately 300 parts per million to 30 parts per
million. The regulation is being phased in from 2004 to 2006. In
addition, the EPA finalized its Tier II distillate standard
to reduce the sulfur content of diesel fuel sold to highway
consumers by 97%, from 500 parts per million to
15 parts per million, beginning June 1, 2006. We have
determined that modifications will be required at most of our
refineries as a result of the Tier II standards. We believe
that the Tier II specifications will require approximately
$1.5 billion in capital expenditures through 2006 for our
refineries to comply, of which approximately $550 million
had been expended through March 31, 2004. The aggregate
estimate of expenditures includes amounts related to projects at
two of our refineries to provide hydrogen as part of the process
of removing sulfur from gasoline and diesel. We expect that such
estimates will change as additional engineering is completed and
progress is made toward construction of these various projects.
We expect all modifications to be complete in time for
compliance with the effective dates of the gasoline and
distillate standards.
Disruption of our ability to obtain crude oil
could adversely affect our operations.
About 70% of our total crude oil feedstock
requirements are purchased through term crude oil feedstock
contracts. The remainder of our crude oil feedstock requirements
are purchased on the spot market. All of our contracts provide
for market-based pricing that fluctuates based on prevailing
commodity prices. The term agreements include contracts to
purchase feedstocks from various foreign national oil companies
and various international and domestic integrated oil companies.
In particular, a significant portion of our feedstock
requirements are satisfied through suppliers located in the
Middle East, and we are, therefore, subject to the political,
geographic and economic risks attendant to doing business with
suppliers located in that area. In the event one or more of our
term contracts were terminated or political events disrupted our
traditional crude oil supply, it is possible that we would be
unable to find alternative sources of supply. If we are unable
to obtain adequate crude oil volumes or are only able to
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obtain such volumes at unfavorable prices, our
results of operations could be materially adversely affected,
including reduced sales volumes of refined products or reduced
margins as a result of higher crude oil costs.
Competitors who produce their own supply of
feedstocks, who have more extensive retail outlets or who have
greater financial resources may have a competitive
advantage.
The refining and marketing industry is highly
competitive with respect to both feedstock supply and refined
product markets. We compete with numerous other companies for
available supplies of crude oil and other feedstocks and for
outlets for our refined products. We do not produce any of our
crude oil feedstocks. Many of our competitors, however, obtain a
significant portion of their feedstocks from company-owned
production and some have more extensive retail outlets than we
do. Competitors that have their own production or extensive
retail outlets (and brand-name recognition) are at times able to
offset losses from refining operations with profits from
producing or retailing operations, and may be better positioned
to withstand periods of depressed refining margins or feedstock
shortages.
A number of our competitors also have materially
greater financial and other resources than we possess. Such
competitors have a greater ability to bear the economic risks
inherent in all phases of the industry. In addition, we compete
with other industries that provide alternative means to satisfy
the energy and fuel requirements of our industrial, commercial
and individual consumers.
A significant interruption in one or more of
our refineries could adversely affect our business.
With the acquisition of the Aruba refinery and
certain related businesses, our refining activities are
conducted at fifteen major refineries in Texas, Louisiana,
New Jersey, California, Oklahoma, Colorado, Quebec, Canada
and the island of Aruba located in the Caribbean Sea. The
refineries are our principal operating assets. As a result, our
operations could be subject to significant interruption if one
or more of the refineries were to experience a major accident,
be damaged by severe weather or other natural disaster, or
otherwise be forced to shut down. If any refinery were to
experience an interruption in operations, earnings therefrom
could be materially adversely affected, including as a result of
lost production and repair costs.
We may be unable to compete successfully with
other companies in the retail sector.
The retail sector has become increasingly
competitive. We face strong competition from the fully
integrated major oil companies that have increased their efforts
to capture retail market share in recent years. We also compete
with large grocery stores and other general merchandisers (the
so-called “hypermarts”) that often sell gasoline at
aggressively competitive prices in order to attract customers to
their sites. A number of our competitors also have materially
greater financial and other resources than we possess. The
actions of our competitors could lead to lower prices and
reduced margins, which could have a material adverse effect on
our financial position.
Our operations expose us to many operating
risks, not all of which are insured.
Our refining and marketing operations are subject
to various hazards common to the industry, including explosions,
fires, toxic emissions, maritime hazards and uncontrollable
flows of oil and gas. They are also subject to the additional
hazards of loss from severe weather conditions. As protection
against operating hazards, we maintain insurance coverage
against some, but not all, such potential losses. We may not be
able to maintain or obtain insurance of the type and amount we
desire at reasonable rates. As a result of market conditions,
premiums and deductibles for certain of our insurance policies
have increased substantially, and could escalate further. In
some instances, certain insurance could become unavailable or
available only for reduced amounts of coverage. For example,
insurance carriers are now requiring broad exclusions for losses
due to war risk and terrorist acts. If we were to incur a
significant liability for which we were not fully insured, it
could have a material adverse effect on our financial position.
8
Pending or future litigation involving the
manufacture or use of MTBE could adversely affect us.
We are defendants in more than 60 cases
pending in 16 states alleging MTBE contamination in
groundwater. The plaintiffs in these cases are generally water
providers, governmental authorities and private well owners
alleging that refiners and suppliers of gasoline containing MTBE
are liable for manufacturing or distributing a defective
product. The suits generally seek individual, unquantified
compensatory and punitive damages and attorneys’ fees.
Almost all of these cases, in which Valero has been named along
with many other refining industry companies, have been filed
since September 30, 2003 in anticipation of a pending
federal energy bill that may contain provisions for MTBE
liability protection. Although we believe that we have several
strong defenses to these claims and intend to vigorously defend
the lawsuits, an adverse result in one or more of these suits is
reasonably possible. An adverse result in all or substantially
all of these cases could have a material adverse effect on our
results of operations and financial position.
We may not be successful in continuing to grow
through acquisitions, and any further acquisitions may require
us to obtain additional financing or could result in
dilution.
A substantial portion of our growth over the last
several years has been attributable to acquisitions. The ability
to continue to grow through acquisitions will be dependent on a
number of factors, including our ability to:
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identify acceptable acquisition candidates
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consummate acquisitions on favorable terms
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obtain financing to support our growth
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successfully integrate acquired businesses
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We may not be successful in continuing to grow
through acquisitions. In addition, the financing of future
acquisitions may require us to incur additional indebtedness,
which could limit our financial flexibility, or to issue
additional equity, which could result in further dilution of the
ownership interest of existing stockholders.
Provisions in our corporate documents and
Delaware law could delay or prevent a change in our
control.
The existence of some provisions in our corporate
documents and Delaware law could delay or prevent a change in
control of us, even if that change might be beneficial to our
stockholders. In addition, we have adopted a stockholder rights
plan that would cause extreme dilution to any person or group
who attempts to acquire a significant interest in us without
advance approval of our board of directors. Delaware law imposes
additional restrictions on mergers and other business
combinations between us and any holder of 15% or more of our
outstanding common stock.
A patent dispute with Unocal could adversely
affect us.
Union Oil Company of California has filed a
patent infringement lawsuit against us in California federal
court. The complaint seeks a 5.75 cent per gallon royalty
on all reformulated gasoline infringing on Unocal patents that
cover certain compositions of cleaner-burning gasoline. The
complaint seeks treble damages for our alleged willful
infringement of Unocal’s patents and our alleged conduct to
induce others to infringe the patents. In a previous lawsuit
involving one of its patents, Unocal prevailed against five
other major refiners. In 2001, the Federal Trade Commission, or
the FTC, began an antitrust investigation concerning
Unocal’s conduct with a joint industry research group and
regulators during the time that Unocal was prosecuting its
patents at the U.S. Patent and Trademark Office, or the
PTO. In 2003, the FTC filed a complaint against Unocal for
antitrust violations. The FTC’s complaint sought an
injunction against any future enforcement activity by Unocal
related to the patents that are the subject of this lawsuit. In
November 2003, an administrative law judge dismissed the
FTC’s case against Unocal, which the FTC staff appealed to
the full FTC. The FTC has not yet ruled on that appeal. The PTO
has
9
reexamined Unocal’s patents, and has issued
notices of rejection of all claims of the patents. These
rejections are subject to additional proceedings, including
administrative appeal by Unocal, followed by an appeal in
federal district court or the court of appeals. Ultimate
invalidation would preclude Unocal from pursuing claims based on
the patents. Unocal’s patent lawsuit against us is
indefinitely stayed as a result of the PTO reexamination
proceedings. However, due to the inherent uncertainty of
litigation, there can be no assurance that we will prevail in
the lawsuit, and an adverse result could have a material adverse
effect on our results of operations and financial position.
Our leverage may limit our financial
flexibility.
As of March 31, 2004, we had total debt of
approximately $4.9 billion, stockholders’ equity of
approximately $6.4 billion, and cash and temporary cash
investments of $239.0 million. Under our revolving bank
credit facilities, at March 31, 2004, our
debt-to-capitalization ratio (net of cash) was approximately 42%
as is more fully described in our quarterly report on
Form 10-Q/A for the quarterly period ended March 31,
2004 incorporated by reference herein. We may also incur
additional indebtedness in the future, including in connection
with acquisitions, although our ability to do so will be
restricted by existing bank credit facilities. The level of our
indebtedness will have several important effects on our future
operations, including, among others:
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a significant portion of our cash flow from
operations will be dedicated to the payment of principal and
interest on our indebtedness and will not be available for other
purposes
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covenants contained in our existing debt
arrangements require us to meet certain financial tests, which
may affect our flexibility in planning for, and reacting to,
changes in our business, including possible acquisition
opportunities
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our ability to obtain additional financing for
working capital, capital expenditures, acquisitions, general
corporate and other purposes may be limited
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we may be at a competitive disadvantage to our
competitors that are less leveraged
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our vulnerability to adverse economic and
industry conditions may increase
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Our ability to meet our debt service obligations
and to reduce our total indebtedness will be dependent upon our
future performance, which will be subject to general economic
conditions, industry cycles and financial, business and other
factors affecting our operations, many of which are beyond our
control. We cannot assure you that our business will continue to
generate sufficient cash flow from operations to service our
indebtedness. If we are unable to generate sufficient cash flow
from operations, we may be required to sell assets, to refinance
all or a portion of our indebtedness or to obtain additional
financings. Such refinancing might not be possible and
additional financing might not be available on commercially
acceptable terms or at all.
Our bank credit facilities impose financial and
other restrictions on us. Covenants contained in the credit
facilities and relating to certain of our other indebtedness
limit, among other things, our ability and our
subsidiaries’ ability to incur funded indebtedness and
require maintenance of a minimum coverage ratio and a maximum
debt-to-capitalization ratio. Failure to comply with such
covenants may result in a default with respect to the related
debt under the credit facilities or such other indebtedness and
could lead to acceleration of such debt or any instruments
evidencing indebtedness that contain cross-acceleration or
cross-default provisions. In such a case, we might not be able
to refinance or otherwise repay such indebtedness.
10
CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
This prospectus and the accompanying prospectus
supplement, including the information we incorporate by
reference, contain certain estimates, predictions, projections,
assumptions and other “forward-looking statements” (as
defined in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934) that
involve various risks and uncertainties. While these
forward-looking statements, and any assumptions upon which they
are based, are made in good faith and reflect our current
judgment regarding the direction of our business, actual results
will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions, or other
future performance suggested in this report. These
forward-looking statements can generally be identified by the
words “anticipate,” “believe,”
“expect,” “plan,” “intend,”
“estimate,” “project,” “budget,”
“forecast,” “will,” “could,”
“should,” “may” and similar expressions.
These forward-looking statements include, among other things,
statements regarding:
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future refining margins, including gasoline and
heating oil margins
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future retail margins, including gasoline,
diesel, home heating oil and convenience store merchandise
margins
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expectations regarding feedstock costs, including
crude oil discounts, and operating expenses
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anticipated levels of crude oil and refined
product inventories
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our anticipated level of capital investments,
including deferred refinery turnaround and catalyst costs and
capital expenditures for environmental and other purposes, and
the effect of those capital investments on our results of
operations
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anticipated trends in the supply of and demand
for crude oil and other feedstocks and refined products in the
United States, Canada and elsewhere
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expectations regarding environmental and other
regulatory initiatives
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the effect of general economic and other
conditions on refining and retail industry fundamentals
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Our forward-looking statements are based on our
beliefs and assumptions derived from information available at
the time the statements are made. Differences between actual
results and any future performance suggested in these
forward-looking statements could result from a variety of
factors, including, but not limited to, those described under
the heading “Risk Factors” and the following:
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acts of terrorism aimed at either our facilities
or other facilities that could impair our ability to produce
and/or transport refined products or receive foreign feedstocks
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political conditions in crude oil producing
regions, including the Middle East and South America
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the domestic and foreign supplies of refined
products such as gasoline, diesel fuel, jet fuel, home heating
oil and petrochemicals
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the domestic and foreign supplies of crude oil
and other feedstocks
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the ability of the members of the Organization of
Petroleum Exporting Countries (OPEC) to agree on and to
maintain crude oil price and production controls
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the level of consumer demand, including seasonal
fluctuations
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refinery overcapacity or undercapacity
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the actions taken by competitors, including both
pricing and the expansion and retirement of refining capacity in
response to market conditions
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environmental and other regulations at both the
state and federal levels and in foreign countries
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the level of foreign imports of refined products
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accidents or other unscheduled shutdowns
affecting our refineries, machinery, pipelines or equipment, or
those of our suppliers or customers
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changes in the cost or availability of
transportation for feedstocks and refined products
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the price, availability and acceptance of
alternative fuels and alternative-fuel vehicles
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cancellation of or failure to implement planned
capital projects and realize the various assumptions and
benefits projected for such projects or cost overruns in
constructing such planned capital projects
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earthquakes, hurricanes, tornadoes and irregular
weather, which can unforeseeably affect the price or
availability of natural gas, crude oil and other feedstocks and
refined products
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rulings, judgments or settlements in litigation
or other legal or regulatory matters, including unexpected
environmental remediation costs in excess of any reserves or
insurance coverage
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the introduction or enactment of federal or state
legislation which may adversely affect our business or operations
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changes in the credit ratings assigned to our
debt securities and trade credit
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changes in the value of the Canadian dollar
relative to the U.S. dollar
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overall economic conditions
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Any one of these factors, or a combination of
these factors, could materially affect our future results of
operations and whether any forward-looking statements ultimately
prove to be accurate. Our forward-looking statements are not
guarantees of future performance, and actual results and future
performance may differ materially from those suggested in any
forward-looking statements. We do not intend to update these
statements unless we are required by the securities laws to do
so.
All subsequent written and oral forward-looking
statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the foregoing. We
undertake no obligation to publicly release the results of any
revisions to any such forward-looking statements that may be
made to reflect events or circumstances after the date of this
report or to reflect the occurrence of unanticipated events.
12
USE OF PROCEEDS
Each trust will use all the net proceeds from the
sale of the trust preferred securities and the trust common
securities to purchase our debt securities. Unless we inform you
otherwise in the prospectus supplement, we will use the net
proceeds from the sale of the offered securities for general
corporate purposes. These purposes may include, but are not
limited to:
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equity investments in existing and future projects
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permanent financing of bridge facilities used to
make acquisitions
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acquisitions
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working capital
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capital expenditures
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repayment or refinancing of debt or other
corporate obligations
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repurchases and redemptions of securities
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Pending any specific application, we may
initially invest those funds in short-term marketable securities
or apply them to the reduction of short-term indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO
OF EARNINGS
TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
The following table sets forth the ratio of
earnings to fixed charges and the ratio of earnings to combined
fixed charges and preferred stock dividends for the periods
indicated:
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Three Months
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Years Ended December 31,
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Ended
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March 31, 2004
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2003
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2002
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2001
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2000
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1999
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Ratio of earnings to fixed charges
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4.9x
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3.4x
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1.3x
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7.3x
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5.6x
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1.3x
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Ratio of earnings to combined fixed charges and
preferred stock dividends
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4.6x
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3.4x
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1.3x
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7.3x
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5.6x
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1.3x
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We have computed the ratio of earnings to fixed
charges by dividing earnings by fixed charges. We have computed
the ratio of earnings to combined fixed charges and preferred
stock dividends by dividing earnings by fixed charges and
preferred stock dividends. For these purposes, earnings consist
of consolidated income from continuing operations before income
taxes and fixed charges (excluding capitalized interest), with
certain other adjustments. Fixed charges consist of total
interest, whether expensed or capitalized, including
amortization of debt expense and premiums or discounts related
to outstanding indebtedness, one-third (the proportion deemed
representative of the interest factor) of rental expense and
distributions on preferred securities of subsidiary trusts which
are deducted in the determination of consolidated pre-tax income
from continuing operations.
On July 1, 2003, we issued
10,000,000 shares of our 2% mandatory convertible preferred
stock. Prior to July 1, 2003, we had no preferred or
preference securities outstanding with respect to continuing
operations for any period presented, other than preferred
securities of subsidiary trusts. As a result, the ratio of
earnings to combined fixed charges and preferred stock dividends
for those prior periods is the same as the ratio of earnings to
fixed charges.
13
THE TRUSTS
Each of the trusts is created under the Delaware
Statutory Trust Act and will be governed by an amended and
restated declaration of trust among the trustees of each trust
and us. Each declaration will be qualified under the Trust
Indenture Act of 1939.
We have summarized selected provisions of the
declarations below. This summary is not complete. For a complete
description, we encourage you to read the applicable form of
declaration, which we have filed with the Securities and
Exchange Commission (“SEC”). Please read “Where
You Can Find More Information.”
The address of the principal office of each trust
is One Valero Way, San Antonio, Texas 78249, and the
telephone number of each trust at that address is
(210) 345-2000.
Securities of Each Trust
When a trust issues its trust preferred
securities, the holders of the trust preferred securities will
own all the issued and outstanding trust preferred securities of
the trust. We will acquire all the issued and outstanding trust
common securities of each trust. The trust preferred securities
will be substantially identical to the trust common securities
and will rank equally with the trust common securities, except
that:
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if a trust enforcement event under the
declaration of trust occurs and is continuing, the holders of
trust preferred securities will have the right to receive
payments before the holders of the trust common securities
receive payments
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the holders of trust common securities have the
exclusive right to appoint, remove or replace the trustees and
to increase or decrease the number of trustees
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Each trust will exist primarily for the purposes
of:
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issuing its trust preferred and trust common
securities
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investing the proceeds from the sale of its
securities in our debt securities
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engaging in only such other activities as are
necessary or incidental to issuing its securities and purchasing
and holding our debt securities
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The rights of the holders of the trust preferred
securities, including economic rights, rights to information and
voting rights, will be contained in and governed by the
applicable declaration of trust, the Delaware Statutory Trust
Act and the Trust Indenture Act of 1939.
Powers and Duties of Trustees
The number of trustees of each trust will
initially be five. Three of the trustees will be individuals who
are our officers or employees. The fourth trustee will be The
Bank of New York, which will serve as the property trustee under
the declaration of trust for purposes of the Trust Indenture Act
of 1939. The fifth trustee will be The Bank of New York
(Delaware), which has its principal place of business in the
State of Delaware.
The property trustee will own and hold for the
benefit of the holders of the trust preferred securities our
debt securities purchased by a trust. The property trustee will
also:
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generally exercise the rights, powers and
privileges of a holder of the debt securities
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maintain exclusive control of a segregated
non-interest bearing bank account to hold all payments on the
debt securities
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promptly make distributions to the holders of the
trust securities out of funds from the property account
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The Bank of New York, acting in its capacity as
guarantee trustee, will hold for the benefit of the holders of
the trust preferred securities a trust preferred securities
guarantee, which will be separately qualified under the Trust
Indenture Act of 1939.
Because we will own all of the trust common
securities of each trust, we will have the exclusive right to
appoint, remove or replace trustees and to increase or decrease
the number of trustees. In most cases, there will be at least
five trustees. The term of a trust will be described in the
applicable prospectus supplement, but may dissolve earlier as
provided in the applicable declaration of trust.
The duties and obligations of the trustees of a
trust will be governed by the declaration of that trust, the
Delaware Statutory Trust Act and the Trust Indenture Act of 1939.
Books and Records
We will maintain the books and records of each
trust at the principal office of the trust. The books and
records of each trust will be open for inspection by each holder
of trust preferred securities of that trust or any authorized
representative of such holder for any purpose reasonably related
to the holder’s interest in the trust during normal
business hours.
The Property Trustee
The property trustee, for the benefit of the
holders of the trust securities, generally will exercise all
rights under the applicable indenture for the debt securities
deposited in the trust as trust assets, including the right to
enforce our obligations under the debt securities upon the
occurrence of an event of default under the applicable indenture.
If we extend the interest payment period for the
related debt securities held by a trust and, as a result, the
trust does not make distributions, the property trustee will not
be able to enforce the payment of distributions on the trust
preferred securities until a trust enforcement event under the
declaration of trust has occurred. If a trust enforcement event
under the declaration of trust has occurred and is continuing,
then the holders of at least 25% of outstanding trust preferred
securities may direct the property trustee to enforce the
available remedies under the related declaration of trust. If
the property trustee fails to enforce its rights under the
applicable series of debt securities after a holder has provided
a written request, the holder, to the fullest extent permitted
by law, may enforce those rights directly against us without
first instituting any legal proceeding against the property
trustee or any other person.
If a trust enforcement event under the applicable
declaration of trust has occurred and is continuing and results
from our failure to make payments on the applicable series of
debt securities when due, then any holder of the trust preferred
securities may directly institute a proceeding to enforce
payment of the principal of, any premium or interest on or any
additional amounts payable with respect to the applicable series
of debt securities in an amount corresponding to the aggregate
liquidation amount of that holder’s trust preferred
securities. If a holder brings a direct action, we will be
entitled to that holder’s rights under the applicable
declaration of trust to the extent of any payment made by us to
that holder.
Except as expressly provided in the preceding
sentences or in the applicable prospectus supplement, the
holders of the trust preferred securities will not be able to
exercise directly any other remedy available to the holders of
the applicable series of debt securities.
Trust Enforcement Events
If an event of default under a debt indenture
occurs and is continuing, a trust enforcement event under the
related declaration of trust will occur and be continuing. In
that case, each declaration of trust provides that the holders
of the trust common securities shall be deemed to have waived
the trust enforcement event until all trust enforcement events
under the declaration of trust relating to the trust preferred
securities have been cured, waived or otherwise eliminated.
Until all the trust enforcement events under the declaration of
trust relating to the trust preferred securities have been
cured, waived or otherwise eliminated, the property trustee
shall be deemed to be acting solely on behalf of the holders of
the trust
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preferred securities, and only the holders of the
trust preferred securities will have the right to direct the
property trustee.
If the holders of the trust preferred securities
waive any trust enforcement event under the declaration of
trust, the holder of the trust common securities will also be
bound by the waiver without any further act, vote or consent.
The property trustee will notify the holders of the trust
preferred securities of any trust enforcement event under the
related declaration of trust within 90 days of the
occurrence of the trust enforcement event, unless the default
has been cured before the giving of such notice or the property
trustee in good faith determines that the withholding of such
notice is in the interests of the holders of the trust preferred
securities.
DESCRIPTION OF THE TRUST PREFERRED
SECURITIES
Terms
Each trust may issue only one series of trust
preferred securities. The terms of the trust preferred
securities will include those stated in the amended and restated
declaration of trust and those made a part of that declaration
by the Trust Indenture Act of 1939. For a complete description
of the trust preferred securities, we encourage you to read the
prospectus supplement and the amended and restated declaration
of trust, a form of which we have filed with the SEC. Please
read “Where You Can Find More Information.”
We will guarantee the trust preferred securities
to the extent described under “Description of the Trust
Preferred Securities Guarantee.”
The prospectus supplement relating to trust
preferred securities being offered will include specific terms
relating to the offering. These terms will include some or all
of the following:
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the designation of the trust preferred securities
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the number of trust preferred securities to be
issued by the trust
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the annual distribution rate, the distribution
payment dates, the record dates for distribution payments and
the additional amounts, if any, that may be payable with respect
to the trust preferred securities
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whether distributions will be cumulative and
compounding and, if so, the dates from which distributions will
be cumulative or compounded
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the amounts that will be paid out of the assets
of the trust to the holders of trust preferred securities upon
dissolution of the trust
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any repurchase or redemption provisions
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any voting rights of the trust preferred
securities in addition to those required by law
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terms for any conversion or exchange of the debt
securities or the trust preferred securities into other
securities
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any rights to defer distributions on the trust
preferred securities by extending the interest payment period on
the debt securities
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any other relevant terms, rights, preferences,
privileges, limitations or restrictions of the trust preferred
securities
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We also will describe in the prospectus
supplement the material United States federal income tax
considerations applicable to any offering of trust preferred
securities.
The regular trustees, on behalf of the trust and
pursuant to the declaration of trust, will issue one class of
trust preferred securities and one class of trust common
securities. The trust securities will represent undivided
beneficial ownership interests in the assets of the trust.
16
General
Except as described below, the trust preferred
securities will rank equally, and payments will be made thereon
proportionately, with the trust common securities. The property
trustee of the trust will hold legal title to the debt
securities in trust for the benefit of the holders of the trust
securities. Certain material United States federal income tax
consequences and special considerations applicable to the trust
preferred securities will be described in the applicable
prospectus supplement.
Voting
Holders of trust preferred securities will have
limited voting rights, relating only to certain modifications of
the declaration of trust and the trust preferred securities
guarantees and the exercise of the property trustee’s
rights as holder of the debt securities. The holders of the
trust preferred securities will not be able to appoint, remove
or replace trustees or to increase or decrease the number of
trustees, because these rights will be vested exclusively in the
holder of the trust common securities.
Distributions
Under each declaration, the property trustee must
make distributions on the trust preferred securities to the
extent the property trustee has cash on hand in the applicable
property account to permit that payment. The only funds
available for distribution to the holders of the trust preferred
securities will be those received by the property trustee on the
applicable debt securities. If we do not make payments on the
debt securities, the property trustee will not make
corresponding distributions on the trust preferred securities.
Under each declaration, if and to the extent we make payments on
the debt securities, the property trustee will be obligated to
make distributions on the trust preferred and trust common
securities on a pro rata basis. If a trust enforcement event
under the related declaration has occurred and is continuing,
any funds available to make payments will be paid first to the
holders of the trust preferred securities pro rata based on the
aggregate liquidation amount of trust preferred securities held
in relation to the aggregate liquidation amount of all the
outstanding trust preferred securities. In that case, the holder
of trust common securities would receive payments only after
satisfaction of all amounts owed to the holders of trust
preferred securities.
We will guarantee payment of distributions on the
trust preferred securities as and to the extent described under
“Description of the Trust Preferred Securities
Guarantee.” The guarantees of the trust preferred
securities cover distributions and other payments on the
applicable trust preferred securities only if and to the extent
that we have made a payment to the property trustee on the
applicable debt securities.
Record Holders
The trustees of a trust may treat the registered
owners of the trust preferred securities as the holders for
purposes of receiving distributions and for all other purposes.
We may issue the trust preferred securities in the form of one
or more global certificates that would be deposited with a
depositary or its nominee identified in the prospectus
supplement. Under each declaration:
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the trust and its trustees will be entitled to
deal with the depositary for all purposes, including the payment
of distributions and receiving approvals, votes or consents
under the related declaration. Except for provisions in the
related declaration dealing with the issuance of definitive
certificates representing the trust preferred securities, the
trust and its trustees will not have any obligation to persons
owning a beneficial interest in trust preferred securities
registered in the name of and held by the depositary or its
nominee
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the rights of beneficial owners of trust
preferred securities will be exercised only through the
depositary and will be limited to those established by
applicable law and agreements with the depositary and/or its
participants
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The depositary will receive all notices and
communications to, and all distributions on, trust preferred
securities that are registered in the name of and held by a
depositary or its nominee. We will disclose in
17
the applicable prospectus supplement the specific
terms of the depositary arrangement for the trust preferred
securities and any additional rights and limitations of owners
of beneficial interests in the trust preferred securities.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
GUARANTEE
We will fully and unconditionally guarantee
payments on the trust preferred securities of each trust as
described in this section. The guarantees cover the following
payments:
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periodic cash distributions on the trust
preferred securities out of funds held by the property trustee
of the trust
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payments on liquidation of the trust
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payments on redemption of trust preferred
securities of the trust
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The Bank of New York, as guarantee trustee, will
hold the guarantee for the benefit of the holders of trust
preferred securities.
We have summarized selected provisions of the
guarantee below. This summary is not complete. For a complete
description, we encourage you to read the guarantee, the form of
which we have filed with the SEC. Please read “Where You
Can Find More Information.”
We will irrevocably and unconditionally agree to
pay the holders of the trust preferred securities in full the
following amounts to the extent not paid by the trust:
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any accumulated and unpaid distributions and any
additional amounts with respect to the trust preferred
securities and any redemption price for trust preferred
securities called for redemption by the trust, if and to the
extent that we have made corresponding payments on the debt
securities to the property trustee of the trust
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payments upon the dissolution of the trust equal
to the lesser of:
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the liquidation amount plus all accumulated and
unpaid distributions and additional amounts on the trust
preferred securities to the extent the trust has funds legally
available for those payments and
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the amount of assets of the trust remaining
legally available for distribution to the holders of trust
preferred securities in liquidation of the trust
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We will not be required to make these liquidation
payments if:
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the trust distributes the debt securities to the
holders of trust preferred securities in exchange for their
trust preferred securities or
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the trust redeems the trust preferred securities
in full upon the maturity or redemption of the debt securities
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We may satisfy our obligation to make a guarantee
payment either by making payment directly to the holders of
trust preferred securities or to the guarantee trustee for
remittance to the holders or by causing the applicable trust to
make the payment to them.
Each guarantee is a guarantee from the time of
issuance of the applicable series of trust preferred securities.
The guarantee only covers, however, distributions and other
payments on trust preferred securities if and to the extent that
we have made corresponding payments on the debt securities to
the applicable property trustee. If we do not make those
corresponding payments on the debt securities, the trust will
not have funds available for payments and we will have no
obligation to make a guarantee payment.
18
Our obligations under the declaration of trust
for each trust, the guarantee, the debt securities and the
associated indenture taken together will provide a full and
unconditional guarantee of payments due on the trust preferred
securities. We will describe the specific terms of the guarantee
in a prospectus supplement.
Covenants of Valero
In each guarantee, we will agree that, as long as
any trust preferred securities issued by the applicable trust
are outstanding, we will not make the payments and distributions
described below if:
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we are in default on our guarantee payments or
other payment obligations under the related guarantee
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any trust enforcement event under the applicable
declaration of trust has occurred and is continuing or
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we have elected to defer payments of interest on
the related debt securities by extending the interest payment
period and that deferral period is continuing
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In these circumstances, we will agree that we
will not:
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declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of our capital stock
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make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt
securities that rank equally with or junior in interest to the
debt securities or make any guarantee payments with respect to
any guarantee by us of the debt of any of our subsidiaries if
that guarantee ranks equally with or junior in interest to the
debt securities
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However, even during these circumstances, we may:
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purchase or acquire our capital stock in
connection with the satisfaction by us of our obligations under
any employee benefit plan or pursuant to any contract or
security outstanding on the first day of any extension period
requiring us to purchase our capital stock
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reclassify our capital stock or exchange or
convert one class or series of our capital stock for another
class or series of our capital stock
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purchase fractional interests in shares of our
capital stock pursuant to the conversion or exchange provisions
of the capital stock or the security being converted or exchanged
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declare dividends or distributions in our capital
stock
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redeem or repurchase any rights pursuant to a
rights agreement
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make payments under the guarantee related to the
trust preferred securities
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In addition, as long as trust preferred
securities issued by any trust are outstanding, we will agree
that we will:
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remain the sole direct or indirect owner of all
the outstanding trust common securities of that trust, except as
permitted by the applicable declaration of trust
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permit the trust common securities of that trust
to be transferred only as permitted by the applicable
declaration of trust
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use reasonable efforts to cause that trust to
continue to be treated as a grantor trust for United States
federal income tax purposes, except in connection with a
distribution of debt securities to the holders of trust
preferred securities as provided in the applicable declaration
of trust, in which case the trust would be dissolved
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19
Amendments and Assignment
We and the guarantee trustee may amend each
guarantee without the consent of any holder of trust preferred
securities if the amendment does not adversely affect the rights
of the holders in any material respect. In all other cases, we
and the guarantee trustee may amend each guarantee only with the
prior approval of the holders of at least a majority of
outstanding trust preferred securities issued by the applicable
trust.
We may assign our obligations under the
guarantees only in connection with a consolidation, merger or
asset sale involving us permitted under the indenture governing
the debt securities.
Termination of the Guarantee
A guarantee will terminate upon:
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full payment of the redemption price of all trust
preferred securities of the applicable trust
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distribution of the related debt securities, or
any securities into which those debt securities are convertible,
to the holders of the trust preferred securities and trust
common securities in exchange for all the securities issued by
that trust or
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full payment of the amounts payable upon
liquidation of that trust
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Each guarantee will, however, continue to be
effective or will be reinstated if any holder of trust preferred
securities must repay any amounts paid on those trust preferred
securities or under the guarantee.
Status of the Guarantee
Our obligations under each guarantee will be
unsecured and effectively junior to all debt and preferred stock
of our subsidiaries.
By your acceptance of the trust
preferred securities, you agree to any subordination provisions
and other terms of the related guarantee.
We will specify in
the prospectus supplement the ranking of each guarantee with
respect to our capital stock and other liabilities, including
other guarantees.
Each guarantee will be deposited with the
guarantee trustee to be held for the benefit of the holders of
the trust preferred securities. The guarantee trustee will have
the right to enforce the guarantee on the behalf of the holders
of the trust preferred securities. In most cases, the holders of
a majority of outstanding trust preferred securities issued by
the applicable trust will have the right to direct the time,
method and place of:
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conducting any proceeding for any remedy
available to the applicable guarantee trustee or
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exercising any trust or other power conferred
upon that guarantee trustee under the applicable guarantee
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Each guarantee will constitute a guarantee of
payment and not merely of collection. This means that the
guarantee trustee may institute a legal proceeding directly
against us to enforce the payment rights under the guarantee
without first instituting a legal proceeding against any other
person or entity.
If the guarantee trustee fails to enforce the
guarantee or we fail to make a guarantee payment, the holders of
the trust preferred securities may institute a legal proceeding
directly against us to enforce their rights under that guarantee
without first instituting a legal proceeding against the
applicable trust, the guarantee trustee or any other person or
entity.
Periodic Reports Under Guarantee
We will be required to provide annually to the
guarantee trustee a statement as to our performance of our
obligations and our compliance with all conditions under the
guarantees.
20
Duties of Guarantee Trustee
The guarantee trustee normally will perform only
those duties specifically set forth in the applicable guarantee.
There are no implied covenants applicable to the guarantee
trustee under the guarantee. If a default occurs under a
guarantee, the guarantee trustee will be required to use the
same degree of care and skill in exercise of its powers under
the guarantee as a prudent person would exercise or use under
the circumstances in the conduct of his own affairs. The
guarantee trustee will exercise any of its rights or powers
under the guarantee at the request or direction of holders of
the applicable series of trust preferred securities only if it
is offered security and indemnity satisfactory to it.
Governing Law
New York law will govern the guarantees.
DESCRIPTION OF THE DEBT SECURITIES
We may issue to a trust or as part of a stock
purchase unit from time to time one or more series of:
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senior debt securities under an indenture dated
as of June 18, 2004 between us and The Bank of New York, a
New York banking corporation, as indenture trustee
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subordinated debt securities under an indenture
to be entered into between us and The Bank of New York, as
indenture trustee
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We will provide information about the senior or
subordinated debt securities in a prospectus supplement. We will
issue only one series of debt securities to each trust. The
indenture for the senior debt securities and the indenture for
the subordinated debt securities will be substantially
identical, except for the provisions relating to subordination
and restrictive covenants. We sometimes refer to the senior
indenture and the subordinated indenture as the
“indentures.”
We have summarized selected provisions of the
indentures and the debt securities below. This summary is not
complete. For a complete description, we encourage you to read
the indentures. We have filed the senior indenture and the form
of subordinated indenture with the SEC, and we will include the
final subordinated indenture and any other instrument
establishing the terms of any debt securities we offer as
exhibits to a filing we will make with the SEC in connection
with that offering. Please read “Where You Can Find More
Information.”
Ranking
The senior debt securities will constitute senior
debt and will rank equally with all of our unsecured and
unsubordinated debt. The subordinated debt securities will be
subordinated to, and thus have a junior position to, the senior
debt securities and all of our other senior debt. None of the
indentures limit the amount of debt that can be issued under the
indentures or the amount of additional indebtedness we or any of
our subsidiaries may incur. We may issue debt securities under
any of the indentures from time to time in one or more series,
each in an amount we authorize prior to issuance. The indenture
trustee will authenticate and deliver debt securities executed
and delivered to it by us as set forth in the applicable
indenture.
We are organized as a holding company that owns
subsidiary companies. Our subsidiary companies conduct
substantially all of our business. The holding company structure
results in two principal risks:
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Our subsidiaries may be restricted by contractual
provisions or applicable laws from providing us the cash that we
need to pay parent company debt service obligations, including
payments on the debt securities
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In any liquidation, reorganization or insolvency
proceeding involving us, your claim as a holder of trust
preferred securities, which represents in effect an interest in
debt securities, or as a holder of
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debt securities as part of a stock purchase unit,
will be effectively junior to the claims of holders of any
indebtedness or preferred stock of our subsidiaries
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Subsequent Distribution to Holders of Trust
Securities
If we issue debt securities to a trust in
connection with the issuance of trust preferred and trust common
securities by that trust, those debt securities subsequently may
be distributed to the holders of the trust preferred and trust
common securities either:
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upon the dissolution of the trust or
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upon the occurrence of events that we will
describe in the prospectus supplement
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Terms
The prospectus supplement relating to any series
of debt securities we are offering will include specific terms
relating to that offering. These terms will include some or all
of the following:
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whether the debt securities are senior or
subordinated debt securities
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the title of the debt securities
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any limit on the total principal amount of the
debt securities
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the date or dates on which the principal of the
debt securities will be payable
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any interest rate, or the method of determining
the interest rate, on the debt securities, the date from which
interest will accrue, interest payment dates and record dates
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any right to extend or defer the interest payment
periods and the duration of the extension
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if other than as set forth in this prospectus,
the place or places where payments on the debt securities will
be payable
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any optional redemption provisions
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any sinking fund or other provisions that would
obligate us to redeem or purchase the debt securities
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any provisions for the remarketing of the debt
securities
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any changes or additions to the events of default
or covenants
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whether we will issue the debt securities in
individual certificates to each holder in registered or bearer
form, or in the form of temporary or permanent global securities
held by a depositary on behalf of holders
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the denominations in which we will issue the debt
securities, if other than denominations of an integral multiple
of $1,000
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the terms of any right to convert debt securities
into shares of our common stock or other securities or property
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whether payments on the debt securities will be
payable in foreign currency or currency units (including
composite currencies) or another form
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any provisions that would determine the amount of
principal, premium, if any, or interest, if any, on the debt
securities by references to an index or pursuant to a formula
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the portion of the principal amount of the debt
securities that will be payable if the maturity is accelerated,
if other than the entire principal amount
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any other terms of the debt securities not
inconsistent with the relevant indentures
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22
We may sell the debt securities at a discount,
which may be substantial, below their stated principal amount.
These debt securities may bear no interest or interest at a rate
that at the time of issuance is below market rates. We will
describe in the prospectus supplement any material United States
federal income tax consequences applicable to those securities.
If we sell any of the debt securities for any
foreign currency or currency unit or if payments on the debt
securities are payable in any foreign currency or currency unit,
we will describe in the prospectus supplement the restrictions,
elections, tax consequences, specific terms and other
information relating to those debt securities and the foreign
currency or currency unit.
Consolidation, Merger and Sale
We have agreed that we will consolidate with or
merge into any entity or transfer or dispose of all or
substantially all of our assets to any entity only if:
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we are the continuing corporation, or
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if we are not the continuing corporation, the
successor is organized and existing under the laws of any United
States jurisdiction and assumes all of our obligations under the
indenture and the debt securities, and
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in either case, immediately after giving effect
to the transaction, no default or event of default would occur
and be continuing
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Events of Default
Unless we inform you otherwise in the prospectus
supplement, the following are events of default under the
indentures with respect to a series of debt securities:
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our failure to pay interest on any debt security
of that series for 30 days
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our failure to pay principal of or any premium on
any debt security of that series when due
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our failure to make any sinking fund payment for
any debt security of that series when due
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our failure to perform any of our other covenants
or breach of any of our other warranties in that indenture,
other than a covenant or warranty included in the indenture
solely for the benefit of another series of debt securities, and
that failure continues for 60 days after written notice is
given or received as provided in the indentures
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certain bankruptcy, insolvency or reorganization
events involving us
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any other event of default we may provide for
that series
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If an event of default for any series of debt
securities occurs and is continuing, the indenture trustee or
the holders of at least 25% in principal amount of the
outstanding debt securities of the series affected by the
default may declare the principal amount of all the debt
securities of that series to be due and payable immediately.
After any declaration of acceleration of a series of debt
securities, but before a judgment or decree for payment has been
obtained, the event of default giving rise to the declaration of
acceleration will, without further act, be deemed to have been
waived, and such declaration and its consequences will, without
further act, be deemed to have been rescinded and annulled if:
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we have paid or deposited with the trustee a sum
sufficient to pay
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all overdue interest
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the principal and premium, if any, due otherwise
than by the declaration of acceleration and any interest on such
amounts
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any interest on overdue interest, to the extent
legally permitted
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all amounts due to the trustee under the indenture
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all events of default with respect to that series
of debt securities, other than the nonpayment of the principal
which became due solely by virtue of the declaration of
acceleration, have been cured or waived
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If required by the declaration of trust, any
rescission may be subject to the consent of the holders of the
trust preferred securities and the trust common securities.
In most cases, the indenture trustee will be
under no obligation to exercise any of its rights or powers
under the indentures at the request or direction of any of the
holders, unless the holders have offered to the indenture
trustee indemnity reasonably satisfactory to the trustee.
Subject to this provision for indemnification, the holders of a
majority in aggregate principal amount of the outstanding debt
securities of any series may direct the time, method and place
of:
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conducting any proceeding for any remedy
available to the indenture trustee
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exercising any trust or power conferred on the
indenture trustee, with respect to the debt securities of that
series
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Each indenture requires us to furnish to the
indenture trustee annually a statement as to our performance of
certain of our obligations under the indenture and as to any
default in performance.
An event of default under the applicable
indenture for a series of debt securities will constitute a
trust enforcement event under the declaration of trust for the
applicable series of trust preferred securities. A holder of
trust preferred securities may directly institute a proceeding
against us for enforcement of payment to that holder of its pro
rata share of principal, premium, interest or any additional
amounts if:
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an event of default under the applicable
declaration of trust has occurred and is continuing and
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that event of default is attributable to our
failure to pay principal, any premium, interest or additional
amounts on the applicable series of debt securities when due
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Except as described in the preceding sentences or
in the prospectus supplement, the holders of trust preferred
securities will not be able to exercise directly any other
remedy available to the holders of the applicable series of debt
securities.
Modification and Waiver
We may modify or amend any of the indentures
without the consent of any holders of the debt securities in
certain circumstances, including to:
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evidence the assumption of our obligations under
the indenture and the debt securities by a successor
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add further covenants for the protection of the
holders
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cure any ambiguity or correct any inconsistency
in the indenture, so long as such action will not adversely
affect the interests of the holders
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establish the form or terms of debt securities of
any series
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evidence the acceptance of appointment by a
successor indenture trustee
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We may modify or amend each indenture with the
consent of the holders of a majority in principal amount of the
outstanding debt securities of each series issued under the
indenture affected by the modification or amendment. Without the
consent of the holder of each outstanding debt security
affected, however, no modification may:
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change the stated maturity of the principal of,
or any installment of interest on, any debt security
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reduce the principal amount of, the interest on,
or the premium payable on, any debt security
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reduce the amount of principal of discounted debt
securities payable upon acceleration of maturity
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change the place of payment or the currency in
which any debt security is payable
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impair the right to institute suit for the
enforcement of any payment on any debt security
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reduce quorum or voting rights
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The holders of a majority in aggregate principal
amount of the outstanding debt securities of each series may
waive past defaults by us under the indentures with respect to
the debt securities of that series only. Those holders may not,
however, waive any default in any payment on any debt security
of that series or compliance with a provision that cannot be
modified or amended without the consent of each holder affected.
Discharge
We will be discharged from all obligations of any
series of debt securities, except for certain surviving
obligations to register the transfer or exchange of the debt
securities and any right by the holders to receive additional
amounts under the indentures if:
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all debt securities of the series previously
authenticated and delivered under the relevant indenture have
been delivered to the indenture trustee for cancellation or
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all debt securities of that series have become
due and payable or will become due and payable within one year,
at maturity or by redemption, and we deposit with the indenture
trustee, in trust, sufficient money to pay the entire
indebtedness of all the debt securities of that series on the
dates the payments are due in accordance with the terms of the
debt securities
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To exercise the right of deposit described above,
we must deliver to the indenture trustee an opinion of counsel
and an officers’ certificate stating that all conditions
precedent to the satisfaction and discharge of the relevant
indenture have been complied with.
Form, Exchange, Registration and
Transfer
Unless we inform you otherwise in the prospectus
supplement, we will issue the debt securities only in fully
registered form, without coupons, in denominations of $1,000 and
integral multiples.
Debt securities will be exchangeable for other
debt securities of the same series, the same total principal
amount and the same terms in such authorized denominations as
may be requested. Holders may present debt securities for
registration of transfer at the office of the security registrar
or any transfer agent we designate. The security registrar or
transfer agent will effect the transfer or exchange when it is
satisfied with the documents of title and identity of the person
making the request. We will not charge a service charge for any
transfer or exchange of the debt securities. We may, however,
require payment of any tax or other governmental charge payable
for the registration of the transfer or exchange.
We will appoint the indenture trustee under each
indenture as security registrar for the debt securities issued
under that indenture. We are required to maintain an office or
agency for transfers and exchanges in each place of payment. We
may at any time designate additional transfer agents for any
series of debt securities.
We will not be required:
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to issue, register the transfer of or exchange
debt securities of a series during a period beginning 15
business days prior to the day of mailing of a notice of
redemption of debt securities of that series selected for
redemption and ending on the close of business on the day of
mailing of the relevant notice or
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to register the transfer of or exchange any debt
security, or portion of any debt security, called for
redemption, except the unredeemed portion of any debt security
we are redeeming in part
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Payment and Paying Agents
Unless we inform you otherwise in the prospectus
supplement, principal and interest will be payable, and the debt
securities will be transferable and exchangeable, at the office
or offices of the applicable indenture trustee or any paying
agent we designate. At our option, we will pay interest on the
debt securities by check mailed to the holder’s registered
address or by wire transfer for global debt securities. Unless
we inform you otherwise in a prospectus supplement, we will make
interest payments to the persons in whose name the debt
securities are registered at the close of business on the record
date for each interest payment date.
In most cases, the indenture trustee and paying
agent will repay to us upon written request any funds held by
them for payments on the debt securities that remain unclaimed
for two years after the date upon which that payment has become
due. After payment to us, holders entitled to the money must
look to us for payment.
Book-Entry and Settlement
We may issue the debt securities of a series in
the form of one or more global debt securities that would be
deposited with a depositary or its nominee identified in the
prospectus supplement. The prospectus supplement will describe:
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any circumstances under which beneficial owners
may exchange their interests in a global debt security for
certificated debt securities of the same series with the same
total principal amount and the same terms
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the manner in which we will pay principal of and
any premium and interest on a global debt security
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the terms of any depositary arrangement and the
rights and limitations of owners of beneficial interests in any
global debt security
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Notices
Notices to holders will be given by mail to the
addresses of such holders as they appear in the security
register.
Governing Law
New York law will govern each indenture and the
debt securities.
The Trustee
The Bank of New York is the indenture trustee
under our senior indenture. Its address is 101 Barclay Street,
Floor 21 West, New York, New York 10286. As of March 31,
2004, The Bank of New York serves as trustee for our senior
unsecured notes and bonds aggregating approximately
$4.0 billion and receives customary fees for its services.
The Bank of New York also will serve as indenture trustee under
the subordinated indenture. Please read “About This
Prospectus.”
The holders of a majority in principal amount of
the outstanding debt securities of any series issued under each
indenture will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy
available to the indenture trustee, subject to certain
exceptions. If an event of default occurs and is continuing, the
indenture trustee will be required in the exercise of its powers
to use the degree of care and skill of a prudent person in the
conduct of his own affairs. The indenture trustee will be
obligated to exercise any of its rights or powers under the
relevant indenture at the request of any holders of debt
securities of any series issued under that indenture only after
those holders have offered the trustee indemnity reasonably
satisfactory to it. The indenture trustee may resign at any time
or the holders of a majority in principal amount of the debt
securities may remove the trustee. If the indenture trustee
resigns, is removed or becomes incapable of acting as trustee or
if a vacancy occurs
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in the office of the trustee for any reason, we
will appoint a successor indenture trustee in accordance with
the provisions of the applicable indenture.
If the indenture trustee becomes one of our
creditors, it will be subject to limitations in the indenture on
its rights to obtain payment of claims or to realize on certain
property received for any claim, as security or otherwise. The
indenture trustee may engage in other transactions with us. If,
however, it acquires any conflicting interest, it must eliminate
that conflict or resign as required under the indenture.
Subordination Under the Subordinated
Indenture
Under the subordinated indenture, payment of the
principal, interest and any premium on the subordinated debt
securities will generally be subordinated and junior in right of
payment to the prior payment in full of all senior debt as
defined in the subordinated indenture. Unless we inform you
otherwise in the prospectus supplement, for purposes of this
indenture “senior debt” will mean all indebtedness,
including guarantees, of Valero, unless the indebtedness states
that it is not senior to the subordinated debt securities.
Unless we inform you otherwise in the prospectus
supplement, we may not make any payment of principal of,
interest on, or any premium on, the subordinated debt securities
if:
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we fail to pay the principal, interest, premium
or any other amounts on any senior debt when due or
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we default in performing any other covenant (a
“covenant default”) in any senior debt that we have
designated if the covenant default allows the holders of that
senior debt to accelerate the maturity of the senior debt they
hold
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The subordination does not affect our obligation,
which is absolute and unconditional, to pay, when due, the
principal of and any premium and interest on the subordinated
debt securities. In addition, the subordination does not prevent
the occurrence of any default under the subordinated indenture.
The subordinated indenture will not limit the
amount of senior debt that we may incur. As a result of the
subordination of the subordinated debt securities, if we became
insolvent, holders of subordinated debt securities may receive
less on a proportionate basis than other creditors.
Restrictive Covenants in the Senior
Indenture
We have agreed to two principal restrictions on
our activities for the benefit of holders of the senior debt
securities. Unless waived or amended, the restrictive covenants
summarized below will apply to a series of debt securities
issued under the senior indenture as long as any of those debt
securities is outstanding, unless the prospectus supplement for
the series states otherwise. We have used in this summary
description terms that we have defined below under
“— Glossary.”
We have agreed that when any senior debt
securities are outstanding neither we nor any of our
subsidiaries will create or assume any liens upon any of our
receivables or other assets or any asset, stock or indebtedness
of any of our subsidiaries unless such senior debt securities
are secured equally and ratably with or prior to the debt
secured by the lien. This covenant has exceptions that permit:
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subject to certain limitations, any lien created
to secure all or part of the purchase price of any property or
to secure a loan made to finance the acquisition of the property
described in such lien
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subject to certain limitations, any lien existing
on any property at the time of its acquisition or created not
later than 12 months thereafter
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subject to certain limitations, any lien created
in connection with the operation or use of any property acquired
or constructed by us and created within 12 months after the
acquisition, construction or commencement of full operations on
the property
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any mechanic’s or materialmen’s lien or
any lien related to workmen’s compensation or other
insurance
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any lien arising by reason of deposits with or
the giving of any form of security to any governmental agency,
including for taxes and other governmental charges
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liens for taxes or charges which are not
delinquent or are being contested in good faith
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any judgment lien the execution of which has been
stayed or which has been adequately appealed and secured
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any lien incidental to the conduct of our
business which was not incurred in connection with the borrowing
of money or the obtaining of advances or credit and which does
not materially interfere with the conduct of our business
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any intercompany lien
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liens incurred in connection with the borrowing
of funds, if such funds are used within 120 days to repay
indebtedness of at least an equal amount secured by a lien on
our property having a fair market value at least equal to the
fair market value of the property securing the new lien
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any lien created to secure indebtedness and
letter of credit reimbursement obligations incurred in
connection with the extension of working capital financing
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any lien existing on the date of the indenture
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subject to an aggregate limit of
$200 million, any lien on cash, cash equivalents or other
account holdings securing derivative obligations
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subject to an aggregate limit of 10% of our
consolidated net tangible assets, any liens not otherwise
permitted by any of the other exceptions set forth in the
indenture
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Limitations on Sale/ Leaseback
Transactions
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We have agreed that neither we nor our
subsidiaries will enter into any sale/leaseback transactions
with regard to any principal property, providing for the leasing
back to us or a subsidiary by a third party for a period of more
than three years of any asset which has been or is to be sold or
transferred by us or such subsidiary to such third party or to
any other person. This covenant has exceptions that permit
transactions of this nature under the following circumstances:
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we would be entitled, pursuant to the
“Limitations on Liens” covenant described above, to
incur indebtedness secured by a lien on the property to be
leased, without equally and ratably securing the senior debt
securities then outstanding or
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within 120 days of the effective date of
such sale/leaseback transaction, we apply an amount equal to the
value of such transaction:
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to the voluntary retirement of funded debt or
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to the purchase of another principal property
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In addition, subject to a limit (on an aggregated
basis with indebtedness secured by liens permitted by the
limitations on liens covenant described above) of 10% of our
consolidated net tangible assets, we can enter into
sale/leaseback transactions not otherwise permitted by the
express provisions of the indenture.
We define the following terms in the senior
indenture. We use them here with the same definitions. Generally
accepted accounting principles should be used to determine all
items in this section, unless otherwise indicated.
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“Consolidated net tangible assets”
means the total amount of assets shown on a consolidated balance
sheet of us and our subsidiaries (excluding goodwill and other
intangible assets), less all current liabilities (excluding
notes payable, short-term debt and current portion of long-term
debt and capital lease obligations).
“Funded debt” means generally any
indebtedness for money borrowed, created, issued, incurred,
assumed or guaranteed which would be classified as long-term
debt or capital lease obligations.
“Principal Property” means any of our
or our subsidiaries’ refineries or refinery-related assets,
distribution facilities or other real property which has a net
book value exceeding 2.5% of consolidated net tangible assets,
but not including any property which in our opinion is not
material to our and our subsidiaries’ total business
conducted as an entirety or any portion of a particular property
that is similarly found not to be material to the use or
operation of such property.
“Subsidiary” means any entity of which
at the time of determination we or one or more of our
subsidiaries owns or controls directly or indirectly more than
50% of the shares of voting stock or the outstanding partnership
or similar interests and any limited partnership (i) of
which we or any one of our subsidiaries are a general partner
and (ii) which is consolidated with us for financial
reporting purposes.
RELATIONSHIP AMONG THE TRUST PREFERRED
SECURITIES, THE
DEBT SECURITIES AND THE GUARANTEE
To the extent set forth in the guarantee and to
the extent funds are available, we will irrevocably guarantee
the payment of distributions and other amounts due on the trust
securities. If and to the extent we do not make payments on the
debt securities, the trust will not have sufficient funds to pay
distributions or other amounts due on the trust securities. The
guarantee does not cover any payment of distributions or other
amounts due on the trust securities unless the trust has
sufficient funds for the payment of such distributions or other
amounts. In such event, a holder of trust securities may
institute a legal proceeding directly against us to enforce
payment of such distributions or other amounts to such holder
after the respective due dates. Taken together, our obligations
under the declaration of trust for each trust, the debt
securities, the indenture and the guarantee provide a full and
unconditional guarantee of payments of distributions and other
amounts due on the trust securities. No single document standing
alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the
combined operation of these documents that provides a full and
unconditional guarantee of the trust’s obligations under
the trust securities.
Sufficiency of Payments
As long as payments of interest and other amounts
are made when due on the debt securities, such payments will be
sufficient to cover distributions and payments due on the trust
securities because of the following factors:
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the aggregate principal amount of the debt
securities will be equal to the sum of the aggregate stated
liquidation amount of the trust securities
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the interest rate and the interest and other
payment dates on the debt securities will match the distribution
rate and distribution and other payment dates for the trust
securities
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we, as issuer of the debt securities, will pay,
and the trust will not be obligated to pay, directly or
indirectly, any costs, expenses, debts and obligations of the
trust (other than with respect to the trust securities)
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the declaration of trust further provides that
the trust will not engage in any activity that is not consistent
with the limited purposes of the trust
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Notwithstanding anything to the contrary in the
indenture, we have the right to set off any payment we are
otherwise required to make thereunder against and to the extent
we have already made, or are concurrently on the date of such
payment making, a related payment under the guarantee.
Enforcement Rights of Holders of Preferred
Securities
If we extend the interest payment period for the
related debt securities held by a trust and, as a result, the
trust does not make distributions, the property trustee will not
be able to enforce the payment of distributions on the trust
preferred securities until a trust enforcement event under the
declaration of trust has occurred. If a trust enforcement event
under the declaration of trust has occurred and is continuing,
then the holders of at least 25% of outstanding trust preferred
securities may direct the property trustee to enforce the
available remedies under the related declaration of trust. If
the property trustee fails to enforce its rights under the
applicable series of debt securities after a holder has provided
a written request, the holder, to the fullest extent permitted
by law, may enforce those rights directly against us without
first instituting any legal proceeding against the property
trustee or any other person.
If a trust enforcement event under the applicable
declaration of trust has occurred and is continuing and results
from our failure to make payments on the applicable series of
debt securities when due, then any holder of the trust preferred
securities may directly institute a proceeding to enforce
payment of the principal of, any premium or interest on or any
additional amounts payable with respect to the applicable series
of debt securities in an amount corresponding to the aggregate
liquidation amount of that holder’s trust preferred
securities. If a holder brings a direct action, we will be
entitled to that holder’s rights under the applicable
declaration of trust to the extent of any payment made by us to
that holder.
If we fail to make payments under the guarantee,
a holder of trust preferred securities may institute a
proceeding directly against us for enforcement of the guarantee
for such payments.
Limited Purpose of Trust
The trust preferred securities evidence undivided
beneficial ownership interests in the trust, and the trust
exists for the sole purpose of issuing and selling the trust
securities and using the proceeds to purchase our debt
securities. A principal difference between the rights of a
holder of trust preferred securities and a holder of debt
securities is that a holder of debt securities is entitled to
receive from us the principal amount of and interest accrued on
the debt securities held, while a holder of trust preferred
securities is entitled to receive distributions and other
payments from the trust (or from us under the guarantee) only if
and to the extent the trust has funds available for the payment
of such distributions and other payments.
Rights Upon Dissolution
Upon any voluntary or involuntary dissolution of
the trust involving the redemption or repayment of the debt
securities, the holders of the trust securities will be entitled
to receive, out of assets held by the trust, subject to the
rights of creditors of the trust, if any, the liquidation
distribution in cash. Because we are the guarantor under the
guarantee and, as issuer of the debt securities, we have agreed
to pay for all costs, expenses and liabilities of the trust
(other than the trust’s obligations to the holders of the
trust securities), the positions of a holder of trust securities
and a holder of debt securities relative to other creditors and
to our stockholders in the event of our liquidation or
bankruptcy would be substantially the same.
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DESCRIPTION OF STOCK PURCHASE
CONTRACTS
AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including
contracts obligating holders to purchase from us, and obligating
us to sell to the holders, a specified number of shares of
common stock at a future date or dates, which we refer to herein
as “stock purchase contracts.” We may fix the price
per share of common stock and the number of shares of common
stock at the time the stock purchase contracts are issued or by
reference to a specific formula set forth in the stock purchase
contracts. We may issue the stock purchase contracts separately
or as part of units, which we refer to as “stock purchase
units,” consisting of a stock purchase contract and debt
securities, trust preferred securities or debt obligations of
third parties, including U.S. treasury securities, securing
the holders’ obligations to purchase the common stock under
the stock purchase contracts. The stock purchase contracts may
require holders to secure their obligations under the stock
purchase contracts in a specified manner. The stock purchase
contracts also may require us to make periodic payments to the
holders of the stock purchase units or vice versa, and such
payments may be unsecured or refunded on some basis.
The applicable prospectus supplement will
describe the terms of the stock purchase contracts or stock
purchase units. The description in the prospectus supplement
will not necessarily be complete, and reference will be made to
the stock purchase contracts and, if applicable, collateral or
depositary arrangements, relating to the stock purchase
contracts or stock purchase units. The applicable prospectus
supplement will also describe the material United States federal
income tax considerations applicable to the stock purchase units
and the stock purchase contracts.
DESCRIPTION OF CAPITAL STOCK
We have summarized selected aspects of our
capital stock below. The summary is not complete. For a complete
description, you should refer to our restated certificate of
incorporation, restated by-laws, certificates of designation and
the Rights Agreement, dated as of July 17, 1997 between us
and Computershare Investor Services, LLC, as successor rights
agent to Harris Trust and Savings Bank, as amended, all of which
are exhibits to the registration statement of which this
prospectus is a part.
Authorized Capital Stock
Our authorized capital stock consists of:
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300,000,000 shares of common stock, par
value $0.01 per share
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20,000,000 shares of preferred stock, par
value $0.01 per share, issuable in series
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Each share of common stock is entitled to
participate equally in dividends as and when declared by our
board of directors. The payment of dividends on our common stock
may be limited by obligations we may have to holders of any
preferred stock. For information regarding restrictions on
payments of dividends, see below and the prospectus supplement
applicable to any issuance of common stock.
Common stockholders are entitled to one vote for
each share held on all matters submitted to them. The common
stock does not have cumulative voting rights, meaning that
holders of a majority of the shares of common stock voting for
the election of directors can elect all the directors if they
choose to do so.
If we liquidate or dissolve our business, the
holders of common stock will share ratably in the distribution
of assets available for distribution to stockholders after
creditors are paid and preferred stockholders receive their
distributions. The shares of common stock have no preemptive
rights and are not convertible, redeemable or assessable or
entitled to the benefits of any sinking fund.
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All issued and outstanding shares of common stock
are fully paid and nonassessable. Any shares of common stock we
offer under this prospectus will be fully paid and nonassessable.
The common stock is listed on the New York Stock
Exchange and trades under the symbol “VLO.”
Our board of directors can, without action by
stockholders, issue one or more series of preferred stock. The
board can determine for each series the number of shares,
designation, relative voting rights, dividend rates, liquidation
and other rights, preferences and limitations. In some cases,
the issuance of preferred stock could delay or discourage a
change in control of us.
The prospectus supplement relating to any series
of preferred stock we are offering will include specific terms
relating to the offering. These terms will include some or all
of the following:
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the title of the preferred stock
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the maximum number of shares of the series
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the dividend rate or the method of calculating
the dividend, the date from which dividends will accrue and
whether dividends will be cumulative
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any liquidation preference
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any redemption provisions
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any sinking fund or other provisions that would
obligate us to redeem or purchase the preferred stock
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any terms for the conversion or exchange of the
preferred stock for other securities of us or any other entity
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any voting rights
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any other preferences and relative,
participating, optional or other special rights or any
qualifications, limitations or restrictions on the rights of the
shares
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Any shares of preferred stock we issue will be
fully paid and nonassessable
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Our board of directors has reserved for issuance
pursuant to our Stockholder Rights Plan described below a total
of 1,500,000 shares of Junior Participating Preferred
Stock, Series I. We have not issued any shares of the
Junior Participating Preferred Stock, Series I at the date
of this prospectus.
Additionally on July 1, 2003, we issued
10,000,000 shares of our 2% mandatory convertible preferred
stock (liquidation preference $25 per share)
(“Convertible Preferred Stock”) in connection with our
acquisition of Orion Refining Corporation’s refinery
located in St. Charles Parish, Louisiana. The Convertible
Preferred Stock will automatically convert to our common stock
on July 1, 2006. Holders of the Convertible Preferred Stock
are entitled to vote with the holders of common stock on all
matters. Each share of Convertible Preferred Stock is entitled
to a vote equal to the mandatory conversion ratio in effect on
the record date for any such vote. The mandatory conversion
ratio ranges from 0.4955 to 0.6690 based on the market value of
our common stock and is subject to adjustment in certain
circumstances. We pay annual dividends on each share of
Convertible Preferred Stock in the amount of $0.50 when, as and
if declared by our board of directors. Dividends will be paid
quarterly, provided that dividends will not accrue or be payable
with respect to a particular calendar quarter if we do not
declare a dividend on our common stock during that calendar
quarter. The Convertible Preferred Stock will rank with respect
to dividend rights and rights upon our liquidation, winding-up
or dissolution as follows: (i) senior to all common stock
and to all of our other capital stock issued in the future that
ranks junior to the Convertible Preferred Stock; (ii) on a
parity with any of our capital stock issued in the future the
terms of which expressly provide that it will rank on a parity
with the Convertible Preferred Stock; and (iii) junior to
all of our
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capital stock the terms of which expressly
provide that such capital stock will rank senior to the
Convertible Preferred Stock.
The provisions of Delaware law and our restated
certificate of incorporation and our restated by-laws summarized
below may have an anti-takeover effect and may delay, defer or
prevent a tender offer or takeover attempt that a stockholder
might consider in his or her best interest, including those
attempts that might result in a premium over the market price
for the common stock.
Staggered Board of Directors
Our board of directors is divided into three
classes that are elected for staggered three-year terms. The
classification of the board of directors has the effect of
requiring at least two annual stockholder meetings, instead of
one, to effect a change in control of the board of directors.
Holders of 60% of the shares of common stock entitled to vote in
the election of directors may remove a director for cause, but
stockholders may not remove any director without cause.
Fair Price Provision
Our restated certificate of incorporation
contains a fair price provision. Mergers, consolidations and
other business combinations involving us and an “interested
stockholder” require the approval of holders of at least
66 2/3% of our outstanding voting stock not owned by the
interested stockholder. Interested stockholders include any
holder of 15% or more of our outstanding voting stock. The
66 2/3% voting requirement does not apply, however, if the
“continuing directors,” as defined in our restated
certificate of incorporation, approve the business combination,
or the business combination meets other specified conditions.
Liability of Our Directors
As permitted by the Delaware corporation statute,
we have included in our restated certificate of incorporation a
provision that limits our directors’ liability for monetary
damages for breach of their fiduciary duty of care to us and our
stockholders. The provision does not affect the liability of a
director:
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for any breach of his/her duty of loyalty to us
or our stockholders
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for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law
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for the declaration or payment of unlawful
dividends or unlawful stock repurchases or redemptions
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for any transaction from which the director
derived an improper personal benefit
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This provision also does not affect a
director’s responsibilities under any other laws, such as
the federal securities laws or state or federal environmental
laws.
Stockholder Proposals and Director
Nominations
Our stockholders can submit stockholder proposals
and nominate candidates for our board of directors if the
stockholders follow advance notice procedures described in our
restated by-laws.
Generally, stockholders must submit a written
notice between 60 and 90 days before the first anniversary
of the date of our previous year’s annual
stockholders’ meeting. To nominate directors, the notice
must include the name and address of the stockholder, the class
and number of shares owned by the stockholder, information about
the nominee required by the SEC and a description of any
arrangements or understandings with respect to the election of
directors that exist between the stockholder and any other
person. To make stockholder proposals, the notice must include a
description of the proposal, the reasons for bringing the
proposal before the meeting, the name and address of the
33
stockholder, the class and number of shares owned
by the stockholder and any material interest of the stockholder
in the proposal.
In each case, if we have changed the date of the
annual meeting to more than 30 days before or 60 days
after the anniversary date of our previous year’s annual
stockholders’ meeting, stockholders must submit the notice
between 60 and 90 days prior to such annual meeting or no
later than 10 days after the day we make public the date of
the annual meeting.
Director nominations and stockholder proposals
that are late or that do not include all required information
may be rejected. This could prevent stockholders from bringing
certain matters before an annual meeting, including making
nominations for directors.
Delaware Anti-takeover Statute
We are a Delaware corporation and are subject to
Section 203 of the Delaware General Corporation Law. In
general, Section 203 prevents us from engaging in a
business combination with an “interested stockholder”
(generally, a person owning 15% or more of our outstanding
voting stock) for three years following the time that person
becomes a 15% stockholder unless one of the following is
satisfied:
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before that person became a 15% stockholder, our
board of directors approved the transaction in which the
stockholder became a 15% stockholder or approved the business
combination
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upon completion of the transaction that resulted
in the stockholder’s becoming a 15% stockholder, the
stockholder owns at least 85% of our voting stock outstanding at
the time the transaction began (excluding stock held by
directors who are also officers and by employee stock plans that
do not provide employees with the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer)
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after the transaction in which that person became
a 15% stockholder, the business combination is approved by our
board of directors and authorized at a stockholders’
meeting by at least two-thirds of the outstanding voting stock
not owned by the 15% stockholder.
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Under Section 203, these restrictions also
do not apply to certain business combinations proposed by a 15%
stockholder following the disclosure of an extraordinary
transaction with a person who was not a 15% stockholder during
the previous three years or who became a 15% stockholder with
the approval of a majority of our directors. This exception
applies only if the extraordinary transaction is approved or not
opposed by a majority of our directors who were directors before
any person became a 15% stockholder in the previous three years,
or the successors of these directors.
Other Provisions
Our restated certificate of incorporation also
provides that:
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stockholders may act only at an annual or special
meeting and not by written consent
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an 80% vote of the outstanding voting stock is
required for the stockholders to amend our restated by-laws
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an 80% vote of the outstanding voting stock is
required to amend our restated certificate of incorporation with
respect to certain matters, including those described in the
first two bullet points above
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34
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Transfer Agent and Registrar
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Computershare Investor Services, LLC, is our
transfer agent and registrar.
We have a stockholder rights plan under which one
preferred share purchase right is attached to each outstanding
share of our common stock. The rights become exercisable under
specified circumstances, including any person or group (an
“acquiring person”) becoming the beneficial owner of
15% or more of our outstanding common stock, subject to
specified exceptions. Each right entitles the registered holder
to purchase from us one one-hundredth of a share of Junior
Participating Preferred Stock, Series I, at an exercise
price of $100, subject to adjustment under specified
circumstances. If events specified in the stockholder rights
plan occur, each holder of rights other than the acquiring
person can exercise their rights. When a holder exercises a
right, the holder will be entitled to receive common stock
valued at twice the exercise price of the right. In some cases,
the holder will receive cash, property or other securities
instead of common stock. We may redeem the rights for
$0.01 per right at any time prior to the tenth day after a
person or group becomes an acquiring person.
35
PLAN OF DISTRIBUTION
We and the trusts may sell the offered securities
in and outside the United States (a) through underwriters
or dealers, (b) directly to purchasers, including our
affiliates, (c) through agents or (d) through a
combination of any of these methods. The prospectus supplement
will include the following information:
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the terms of the offering
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the names of any underwriters or agents
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the name or names of any managing underwriter or
underwriters
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the purchase price of the securities
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the net proceeds from the sale of the securities
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any delayed delivery arrangements
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any underwriting discounts, commissions and other
items constituting underwriters’ compensation
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any initial public offering price
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any discounts or concessions allowed or reallowed
or paid to dealers
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any commissions paid to agents
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Sale Through Underwriters or Dealers
If we or the trusts use underwriters in the sale,
the underwriters will acquire the securities for their own
account. The underwriters may resell the securities from time to
time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying
prices determined at the time of sale. Underwriters may offer
securities to the public either through underwriting syndicates
represented by one or more managing underwriters or directly by
one or more firms acting as underwriters. Unless we inform you
otherwise in the prospectus supplement, the obligations of the
underwriters to purchase the securities will be subject to
certain conditions, and the underwriters will be obligated to
purchase all the offered securities if they purchase any of
them. The underwriters may change from time to time any initial
public offering price and any discounts or concessions allowed
or reallowed or paid to dealers.
During and after an offering through
underwriters, the underwriters may purchase and sell the
securities in the open market. These transactions may include
overallotment and stabilizing transactions and purchases to
cover syndicate short positions created in connection with the
offering. The underwriters also may impose a penalty bid, which
means that selling concessions allowed to syndicate members or
other broker-dealers for the offered securities sold for their
account may be reclaimed by the syndicate if the offered
securities are repurchased by the syndicate in stabilizing or
covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the offered securities,
which may be higher than the price that might otherwise prevail
in the open market. If commenced, the underwriters may
discontinue these activities at any time.
If we or the trusts use dealers in the sale of
securities, we or the trusts will sell the securities to them as
principals. They may then resell those securities to the public
at varying prices determined by the dealers at the time of
resale. The dealers participating in any sale of the securities
may be deemed to be underwriters within the meaning of the
Securities Act of 1933 with respect to any sale of these
securities. We will include in the prospectus supplement the
names of the dealers and the terms of the transaction.
Direct Sales and Sales Through
Agents
We and the trusts may sell the securities
directly. In that event, no underwriters or agents would be
involved. We and the trusts may also sell the securities through
agents we or the trusts designate from
36
time to time. In the prospectus supplement, we
will name any agent involved in the offer or sale of the offered
securities, and we will describe any commissions payable to the
agent. Unless we inform you otherwise in the prospectus
supplement, any agent will agree to use its reasonable best
efforts to solicit purchases for the period of its appointment.
We and the trusts may sell the securities
directly to institutional investors or others who may be deemed
to be underwriters within the meaning of the Securities Act of
1933 with respect to any sale of those securities. We will
describe the terms of any such sales in the prospectus
supplement.
Delayed Delivery Contracts
If we so indicate in the prospectus supplement,
we and the trusts may authorize agents, underwriters or dealers
to solicit offers from certain types of institutions to purchase
securities from us or the trusts at the public offering price
under delayed delivery contracts. These contracts would provide
for payment and delivery on a specified date in the future. The
contracts would be subject only to those conditions described in
the prospectus supplement. The prospectus supplement will
describe the commission payable for solicitation of those
contracts.
Remarketing
We and the trusts may offer and sell any of the
offered securities in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment by their
terms or otherwise by one or more remarketing firms acting as
principals for their own accounts or as our agents. We will
identify any remarketing firm, the terms of any remarketing
agreement and the compensation to be paid to the remarketing
firm in the prospectus supplement. Remarketing firms may be
deemed underwriters under the Securities Act of 1933.
Derivative Transactions
We and the trusts may enter into derivative
transactions with third parties, or sell securities not covered
by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates,
in connection with those derivatives, the third parties may sell
securities covered by this prospectus and the applicable
prospectus supplement, including in short sale transactions. If
so, the third parties may use securities pledged by us or
borrowed from us or others to settle those sales or to close out
any related open borrowings of stock, and may use securities
received from us in settlement of those derivatives to close out
any related open borrowings of stock. The third parties in such
sale transactions will be underwriters and, if not identified in
this prospectus, will be identified in the applicable prospectus
supplement (or a post-effective amendment).
We or one of our affiliates also may loan or
pledge securities to a financial institution or other third
party, who may in turn sell the securities pursuant to this
prospectus and the applicable prospectus supplement. Such
financial institution or third party may transfer its short
position to investors in our securities or in connection with a
simultaneous offering of other securities offered by this
prospectus and the applicable prospectus supplement or otherwise.
General Information
We and the trusts may have agreements with the
agents, dealers and underwriters to indemnify them against
certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribute with respect to
payments that the agents, dealers or underwriters may be
required to make. Agents, dealers and underwriters may be
customers of, engage in transactions with or perform services
for us in the ordinary course of their businesses.
37
LEGAL MATTERS
Richards, Layton & Finger, P.A., our
special Delaware counsel and special Delaware counsel to the
trusts, will issue opinions about the legality of the trust
preferred securities, the enforceability of the applicable
declaration of trust and the creation of the trusts for us.
Mr. Jay D. Browning, Esq., our Vice President and
Corporate Secretary, will issue opinions about the legality of
Valero’s guarantees, debt securities, common stock, stock
purchase contracts and stock purchase units for us.
Mr. Browning is our employee and at March 31, 2004,
beneficially owned approximately 19,215 shares of our
common stock (including shares held under employee benefit
plans) and held options under our employee stock option plans to
purchase an additional 35,699 shares of our common stock.
None of such shares or options were granted in connection with
the offering of the securities. Any underwriters will be advised
about other issues relating to any offering by their own legal
counsel.
EXPERTS
The consolidated financial statements of Valero
Energy Corporation and subsidiaries at December 31, 2003
and 2002, and for each of the years then ended, appearing in
Valero Energy Corporation’s Annual Report on Form 10-K
for the year ended December 31, 2003, have been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as
experts in accounting and auditing.
The consolidated financial statements of Valero
Energy Corporation and subsidiaries for the year ended
December 31, 2001, appearing in Valero Energy
Corporation’s Annual Report on Form 10-K for the year
ended December 31, 2003, have been audited by Arthur
Andersen LLP, independent public accountants, as set forth in
their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
The financial statements of Orion Refining
Corporation appearing in Valero Energy Corporation’s
Current Report on Form 8-K/A filed August 12, 2003,
have been audited by PricewaterhouseCoopers LLP, independent
registered public accounting firm, as set forth in their report
thereon included therein and incorporated herein by reference.
Such financial statements are incorporated herein by reference
in reliance upon such report given on the authority of such firm
as experts in accounting and auditing.
The combined financial statements of the
El Paso Aruba Refining Business appearing in Valero Energy
Corporation’s Current Report on Form 8-K/ A filed
May 10, 2004, have been audited by PricewaterhouseCoopers
LLP, independent registered public accounting firm, as set forth
in their report thereon included therein and incorporated herein
by reference. Such combined financial statements are
incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
MATTERS RELATING TO ARTHUR ANDERSEN
LLP
Arthur Andersen LLP has not consented to the
incorporation by reference of their report in this prospectus,
and we have dispensed with the requirement to file their consent
in reliance upon Rule 437a of the Securities Act of 1933.
Because Arthur Andersen LLP has not consented to the
incorporation by reference of their report in this prospectus,
you will not be able to recover against Arthur Andersen LLP
under Section 11 of the Securities Act of 1933 for any
untrue statement of a material fact contained in the financial
statements audited by Arthur Andersen LLP or any omissions to
state a material fact required to be stated therein.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You can
read and copy any materials we file with the SEC at the
SEC’s public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You can obtain information about
the operation of the SEC’s public reference room by calling
the SEC at 1-800-SEC-0330. The SEC also maintains a web site
that contains information we file electronically with the SEC,
which you can access over the Internet at
http://www.sec.gov.
You can obtain information about us
at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
This prospectus is part of a registration
statement we have filed with the SEC relating to the securities
we may offer. As permitted by SEC rules, this prospectus does
not contain all of the information we have included in the
registration statement and the accompanying exhibits and
schedules we file with the SEC. You may refer to the
registration statement, the exhibits and schedules for more
information about us and our securities. The registration
statement, exhibits and schedules are available at the
SEC’s public reference room or through its web site.
INFORMATION WE INCORPORATE BY
REFERENCE
We are incorporating by reference information we
file with the SEC, which means that we are disclosing important
information to you by referring you to those documents. The
information we incorporate by reference is an important part of
this prospectus, and information that we file later with the SEC
automatically will update and supersede this information. We
incorporate by reference the documents listed below and any
future filings we make with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we sell all the securities or after the date on which the
registration statement that includes this prospectus was
initially filed with the SEC and before the effectiveness of
such registration statement:
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our annual report on Form 10-K for the year
ended December 31, 2003
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our quarterly report on Form 10-Q for the
quarterly period ended March 31, 2004, as amended by our
quarterly report on Form 10-Q/ A for the quarterly period
ended March 31, 2004
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the description of our common stock contained in
our registration statement on Form 8-A, as may be amended
from time to time to update that description
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the description of the rights associated with our
common stock contained in our registration statement on
Form 8-A, as may be amended from time to time to update
that description
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our current report on Form 8-K filed with
the SEC on July 15, 2003, as amended by our current reports
on Form 8-K/ A filed with the SEC on August 12, 2003
and September 18, 2003.
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Item 5 of our current report on
Form 8-K filed with the SEC on February 5, 2004
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our current report on Form 8-K filed with
the SEC on February 11, 2004
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our current report on Form 8-K filed with
the SEC on March 9, 2004, as amended by our current report
on Form 8-K/ A filed with the SEC on May 10, 2004
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our current report on Form 8-K filed with
the SEC on March 12, 2004
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our current report on Form 8-K filed with
the SEC on March 25, 2004
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39
You may request a copy of these filings (other
than an exhibit to those filings unless we have specifically
incorporated that exhibit by reference into the filing), at no
cost, by writing or telephoning us at the following address:
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Valero Energy Corporation
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One Valero Way
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San Antonio, Texas 78249
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Attention: Investor Relations
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Telephone: (210) 345-2139
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40
PART II
INFORMATION NOT REQUIRED IN
PROSPECTUS
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Item 14.
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Other Expenses of Issuance and
Distribution
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The following table sets forth all expenses
payable by Valero Energy Corporation (the “Company”)
in connection with the issuance and distribution of the
securities being registered, other than underwriting discounts
and commissions. All the amounts shown are estimates, except the
registration fee.
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Registration Fee
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$
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443,450
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Printing and Engraving Expenses
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225,000
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Legal Fees and Expenses
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300,000
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Accounting Fees and Expenses
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500,000
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Fees and Expenses of Trustee and Counsel
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53,000
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Rating Agency Fees
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511,250
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Miscellaneous
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17,300
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Total
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$
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2,050,000
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Item 15.
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Indemnification of Directors and
Officers
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Valero Energy Corporation
The Company’s Restated Certificate of
Incorporation contains a provision that eliminates the personal
liability of a director to the Company and its stockholders for
monetary damages for breach of fiduciary duty as a director to
the extent currently allowed under the Delaware General
Corporation Law. If a director were to breach such duty in
performing his duties as a director, neither the Company nor its
stockholders could recover monetary damages from the director,
and the only course of action available to the Company’s
stockholders would be equitable remedies, such as an action to
enjoin or rescind a transaction involving a breach of fiduciary
duty. To the extent certain claims against directors are limited
to equitable remedies, the provision in the Company’s
Restated Certificate of Incorporation may reduce the likelihood
of derivative litigation and may discourage stockholders or
management from initiating litigation against directors for
breach of their fiduciary duty. Additionally, equitable remedies
may not be effective in many situations. If a stockholder’s
only remedy is to enjoin the completion of the Board of
Directors’ action, this remedy would be ineffective if the
stockholder does not become aware of a transaction or event
until after it has been completed. In such a situation, it is
possible that the stockholders and the Company would have no
effective remedy against the directors. Under the Company’s
Restated Certificate of Incorporation, liability for monetary
damages remains for (i) any breach of the duty of loyalty
to the Company or its stockholders, (ii) acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) payment of an improper
dividend or improper repurchase or redemption of the
Company’s stock under Section 174 of the Delaware
General Corporation Law, or (iv) any transaction from which
the director derived an improper personal benefit.
Under Article V of the Restated Certificate
of Incorporation and Article VIII of the Company’s
Restated By-laws as currently in effect and an indemnification
agreement with the Company’s officers and directors (the
“Indemnification Agreement”), each person who is or
was a director or officer of the Company or a subsidiary of the
Company, or who serves or served any other enterprise or
organization at the request of the Company or a subsidiary of
the Company, shall be indemnified by the Company to the full
extent permitted by the Delaware General Corporation Law.
Under such law, to the extent that such person is
successful on the merits in defense of a suit or proceeding
brought against him by reason of the fact that he is or was a
director or officer of the Company, or serves or served any
other enterprise or organization at the request of the Company,
he shall
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be indemnified against expenses (including
attorneys’ fees) actually and reasonably incurred in
connection with such action.
Under such law, if unsuccessful in defense of a
third-party civil suit or a criminal suit, or if such suit is
settled, such a person shall be indemnified against both
(a) expenses, including attorneys’ fees, and
(b) judgments, fines and amounts paid in settlement if he
acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Company, and,
with respect to any criminal action, had no reasonable cause to
believe his conduct was unlawful.
If unsuccessful in defense of a suit brought by
or in the right of the Company, or if such a suit is settled,
such a person shall be indemnified under such law only against
expenses (including attorneys’ fees) actually and
reasonably incurred in the defense or settlement of such suit if
he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Company,
except that if such person is adjudged to be liable in such a
suit for negligence or misconduct in the performance of his duty
to the Company, he cannot be made whole for expenses unless the
court determines that he is fairly and reasonably entitled to
indemnity for such expenses.
The Indemnification Agreement provides directors
and officers with specific contractual assurance that
indemnification and advancement of expenses will be available to
them regardless of any amendments to or revocation of the
indemnification provisions of the Company’s Restated
By-laws. The Indemnification Agreement provides for
indemnification of directors and officers against both
stockholder derivative claims and third-party claims.
Sections 145(a) and 145(b) of the Delaware General
Corporation Law, which grant corporations the power to indemnify
directors and officers, specifically authorize lesser
indemnification in connection with derivative claims than in
connection with third-party claims. The distinction is that
Section 145(a), concerning third-party claims, authorizes
expenses and judgments and amounts paid in settlement (as is
provided in the Indemnification Agreement), while
Section 145(b), concerning derivative suits, generally
authorizes only indemnification of expenses. However,
Section 145(f) expressly provides that the indemnification
and advancement of expenses provided by or granted pursuant to
the subsections of Section 145 shall not be exclusive of
any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any agreement. No
Delaware case directly answers the question whether
Delaware’s public policy would support this aspect of the
Indemnification Agreement under the authority of
Section 145(f), or would cause its invalidation because it
does not conform to the distinctions contained in
Sections 145(a) and 145(b).
Delaware corporations also are authorized to
obtain insurance to protect officers and directors from certain
liabilities, including liabilities against which the corporation
cannot indemnify its directors and officers. The Company
currently has in effect a directors’ and officers’
liability insurance policy.
VEC Trusts
Prior to the issuance of trust preferred
securities by a trust, the existing declaration of trust
pursuant to which such trust is created will be amended and
restated to provide that no trustee or paying agent, or
affiliate of any trustee or paying agent, or officer, director,
shareholder, member, partner, employee, representative or agent
of any trustee, affiliate of a trustee or paying agent, or any
officer, employee or agent of such trust or of any of its
affiliates (each, an “Indemnified Person”) will be
liable for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person
in good faith on behalf of such trust and in a manner such
Indemnified Person reasonably believed to be within the scope of
the authority conferred on such Indemnified Person by such
amended and restated declaration of trust or by law, except that
an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person’s
gross negligence (or, in the case of the property trustee of
such trust, negligence) or willful misconduct with respect to
such acts or omissions.
In addition, such amended and restated
declaration of trust shall provide that, to the fullest extent
permitted by applicable law, the Company shall indemnify and
hold harmless each Indemnified Person from and against any loss,
damage or claim incurred by such Indemnified Person by reason of
any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of such trust and in a
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manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such
Indemnified Person by such declaration of trust, except that no
Indemnified Person shall be entitled to be indemnified in
respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the
case of the property trustee of the trust, negligence) or
willful misconduct with respect to such acts or omissions.
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Exhibit
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Number
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Description
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3.1
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Amended and Restated Certificate of Incorporation
of Valero Energy Corporation (formerly known as Valero Refining
and Marketing Company) (incorporated by reference to
Exhibit 3.1 to the Company’s Registration Statement on
Form S-1 (Registration No. 333-27013))
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|
|
3.2
|
|
|
Certificate of Amendment to Restated Certificate
of Incorporation of Valero Energy Corporation dated
July 31, 1997 (incorporated by reference to
Exhibit 3.02 to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003
(SEC file no. 1-13175))
|
|
|
3.3
|
|
|
Certificate of Merger of Ultramar Diamond
Shamrock Corporation with and into Valero Energy Corporation
dated December 31, 2001 (incorporated by reference to
Exhibit 3.03 to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003
(SEC file no. 1-13175))
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|
|
3.4
|
|
|
Amendment to Restated Certificate of
Incorporation of Valero Energy Corporation (incorporated by
reference to Exhibit 3.1 to the Company’s Current
Report on Form 8-K, filed on January 11, 2002 (SEC
file no. 1-13175))
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|
|
3.5
|
|
|
Amended and Restated By-Laws of Valero Energy
Corporation (incorporated by reference to Exhibit 3.1 to
the Company’s Quarterly Report on Form 10-Q/ A for the
quarterly period ended March 31, 2004 (SEC file no.
1-13175))
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|
|
4.1
|
|
|
Specimen Certificate of Common Stock
|
|
|
4.2
|
|
|
Rights Agreement, dated as of July 17, 1997,
between Valero Refining and Marketing Company and Harris Trust
and Savings Bank, as Rights Agent, which includes as
Exhibit A the form Certificate of Designations of Junior
Participating Preferred Stock, Series I, and as
Exhibit B the form Right Certificate (incorporated by
reference to Exhibit 4.1 to the Company’s Registration
Statement on Form S-8 (Registration No. 333-31709))
|
|
|
4.3
|
|
|
Amendment to Rights Agreement, dated as of
June 30, 2000, between Valero Energy Corporation (formerly
known as Valero Refining and Marketing Company), Harris Trust
and Savings Bank and Computershare Investor Services, LLC, as
Rights Agent (incorporated by reference to Exhibit 4.02 to
the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2003 (SEC file no. 1-13175))
|
|
|
4.4
|
|
|
Amendment No. 1 to Rights Agreement, dated
as of May 4, 2001, between Valero Energy Corporation and
Computershare Investor Services, LLC, as Rights Agent
(incorporated by reference to Exhibit 4.4 to the
Company’s Registration Statement on Form 8-A/ A (SEC
file no. 1-13175))
|
|
|
4.5
|
|
|
Certificate of Designation of 2% Mandatory
Convertible Preferred Stock (incorporated by reference to
Exhibit 4.2.1 to the Company’s Registration Statement
on Form S-3 (Registration No. 333-106949))
|
|
|
4.6
|
|
|
Form of 2% Mandatory Convertible Preferred Stock
(incorporated by reference to Exhibit 4.2.2 to the
Company’s Registration Statement on Form S-3
(Registration No. 333-106949))
|
|
|
4.7
|
|
|
Indenture, between Valero Energy Corporation and
Bank of New York, dated as of June 18, 2004 (the
“Senior Indenture”)
|
|
|
4.8
|
|
|
Form of Indenture related to subordinated debt
securities (the “Subordinated Indenture”)
|
|
|
4.9.1
|
|
|
Declaration of Trust of VEC Trust III
(incorporated by reference to Exhibit 4.8.1 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
II-3
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|
|
|
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Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|
|
|
4.9.2
|
|
|
Declaration of Trust of VEC Trust IV
(incorporated by reference to Exhibit 4.8.2 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
|
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4.10
|
|
|
Form of Amended and Restated Declaration of Trust
|
|
|
4.11.1
|
|
|
Certificate of Trust of VEC Trust III
(incorporated by reference to Exhibit 4.10.1 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
|
|
4.11.2
|
|
|
Certificate of Trust of VEC Trust IV
(incorporated by reference to Exhibit 4.10.2 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
|
|
4.12
|
|
|
Form of Trust Preferred Security (included in
Exhibit 4.10)
|
|
|
4.13
|
|
|
Form of Valero Energy Corporation Guarantee
Agreement
|
|
|
5.1
|
|
|
Opinion of Jay D. Browning, Esq.
|
|
|
5.2.1
|
|
|
Opinion of Richards, Layton & Finger,
P.A. relating to VEC Trust III
|
|
|
5.2.2
|
|
|
Opinion of Richards, Layton & Finger,
P.A. relating to VEC Trust IV
|
|
|
12.1
|
|
|
Computation of ratio of earnings to fixed charges
and ratio of earnings to combined fixed charges and preferred
stock dividends (incorporated by reference to Exhibit 12.1
to the Company’s Quarterly Report on Form 10-Q/ A for
the quarterly period ended March 31, 2004 (SEC file no.
1-13175))
|
|
|
23.1
|
|
|
Consent of Ernst & Young LLP
|
|
|
23.2
|
|
|
Consents of PricewaterhouseCoopers LLP
|
|
|
23.3
|
|
|
Consent of Jay D. Browning, Esq. (included
in Exhibit 5.1)
|
|
|
23.4
|
|
|
Consent of Richards, Layton & Finger,
P.A. (included in Exhibits 5.2.1 and 5.2.2)
|
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24.1
|
|
|
Powers of Attorney (included on signature page)
|
|
|
25.1
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
trustee under the Senior Indenture, on Form T-1
|
|
|
25.2
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
trustee under the Subordinated Indenture, on Form T-1
|
|
|
25.3.1
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
property trustee, relating to VEC Trust III, on
Form T-1
|
|
|
25.3.2
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
property trustee, relating to VEC Trust IV, on Form T-1
|
|
|
25.4.1
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
guarantee trustee, relating to VEC Trust III, on
Form T-1
|
|
|
25.4.2
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
guarantee trustee, relating to VEC Trust IV, on
Form T-1
|
|
|
|
|
*
|
The Company will file as an exhibit to a Current
Report on Form 8-K (i) any underwriting, remarketing
or agency agreement relating to securities offered hereby,
(ii) the instruments setting forth the terms of any debt
securities, preferred stock, warrants or stock purchase
contracts, (iii) any additional required opinions of
counsel with respect to the legality of the securities offered
hereby and (iv) any required opinion of counsel to the
Company as to certain tax matters relative to securities offered
hereby.
|
II-4
(a) The undersigned Registrants hereby
undertake:
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|
|
|
|
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to
the Registration Statement:
|
|
|
|
|
|
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
|
|
|
|
|
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission
pursuant to Rule 424(b) of the Securities Act of 1933 if,
in the aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering price
set forth in the “Calculation of Registration Fee”
table in the effective Registration Statement; and
|
|
|
|
|
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change
to such information in the Registration Statement;
|
provided, however,
that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement is on
Form S-3 or Form S-8 and the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act of
1934 that are incorporated by reference in the Registration
Statement.
|
|
|
|
|
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
|
|
|
|
|
(3) To remove from registration by means of
a post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
|
(b) The undersigned Registrant hereby
undertakes that, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant’s
annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan’s annual report pursuant to
Section 15(d) of the Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-5
(d) The undersigned Registrants hereby
undertake that:
|
|
|
|
|
(1) For purposes of determining any
liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
|
|
|
|
|
(2) For the purpose of determining any
liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
|
II-6
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Antonio,
State of Texas, on June 18, 2004.
|
|
|
|
|
VALERO ENERGY CORPORATION
|
|
|
|
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|
By:
|
/s/ MICHAEL S. CISKOWSKI
|
|
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|
|
|
Michael S. Ciskowski
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears below hereby constitutes and appoints
Michael S. Ciskowski and Jay D. Browning, or either of them,
each with power to act without the other, his or her true and
lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign
any or all subsequent pre- and post-effective amendments and
supplements to this registration statement and any registration
statement for the same offering of the type contemplated by
Rule 462(b) under the Securities Act of 1933, and to file
the same, or cause to be filed the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
necessary or desirable to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the
following persons in the capacities indicated and on
June 18, 2004.
|
|
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
/s/ WILLIAM E. GREEHEY
William E. Greehey
|
|
Chairman of the Board and Chief Executive
Officer
(Principal Executive Officer)
|
|
|
/s/ MICHAEL S. CISKOWSKI
Michael S. Ciskowski
|
|
Executive Vice President and Chief Financial
Officer
(Principal Financial and Accounting Officer)
|
|
|
/s/ E. GLENN BIGGS
E. Glenn Biggs
|
|
Director
|
|
|
/s/ W. E. BRADFORD
W. E. Bradford
|
|
Director
|
|
|
/s/ RONALD K. CALGAARD
Ronald K. Calgaard
|
|
Director
|
II-7
|
|
|
|
|
|
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
|
/s/ JERRY D. CHOATE
Jerry D. Choate
|
|
Director
|
|
|
/s/ RUBEN M. ESCOBEDO
Ruben M. Escobedo
|
|
Director
|
|
|
/s/ BOB MARBUT
Bob Marbut
|
|
Director
|
|
|
/s/ SUSAN KAUFMAN PURCELL
Susan Kaufman Purcell
|
|
Director
|
II-8
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, VEC Trust III certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Antonio,
State of Texas, on June 18, 2004.
|
|
|
|
|
|
By:
|
VALERO ENERGY CORPORATION,
|
|
|
|
|
|
|
|
|
Jay D. Browning
|
|
|
Vice President and Corporate
Secretary
|
II-9
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, VEC Trust IV certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of San Antonio,
State of Texas, on June 18, 2004.
|
|
|
|
|
|
By:
|
VALERO ENERGY CORPORATION,
|
|
|
|
|
|
|
|
|
Jay D. Browning
|
|
|
Vice President and Corporate
Secretary
|
II-10
EXHIBIT INDEX
|
|
|
|
|
|
|
Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|
|
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation
of Valero Energy Corporation (formerly known as Valero Refining
and Marketing Company) (incorporated by reference to
Exhibit 3.1 to the Company’s Registration Statement on
Form S-1 (Registration No. 333-27013))
|
|
|
3.2
|
|
|
Certificate of Amendment to Restated Certificate
of Incorporation of Valero Energy Corporation dated
July 31, 1997 (incorporated by reference to
Exhibit 3.02 to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003
(SEC file no. 1-13175))
|
|
|
3.3
|
|
|
Certificate of Merger of Ultramar Diamond
Shamrock Corporation with and into Valero Energy Corporation
dated December 31, 2001 (incorporated by reference to
Exhibit 3.03 to the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003
(SEC file no. 1-13175))
|
|
|
3.4
|
|
|
Amendment to Restated Certificate of
Incorporation of Valero Energy Corporation (incorporated by
reference to Exhibit 3.1 to the Company’s Current
Report on Form 8-K, filed on January 11, 2002 (SEC
file no. 1-13175))
|
|
|
3.5
|
|
|
Amended and Restated By-Laws of Valero Energy
Corporation (incorporated by reference to Exhibit 3.1 to
the Company’s Quarterly Report on Form 10-Q/ A for the
quarterly period ended March 31, 2004 (SEC file no.
1-13175))
|
|
|
4.1
|
|
|
Specimen Certificate of Common Stock
|
|
|
4.2
|
|
|
Rights Agreement, dated as of July 17, 1997,
between Valero Refining and Marketing Company and Harris Trust
and Savings Bank, as Rights Agent, which includes as
Exhibit A the form Certificate of Designations of Junior
Participating Preferred Stock, Series I, and as
Exhibit B the form Right Certificate (incorporated by
reference to Exhibit 4.1 to the Company’s Registration
Statement on Form S-8 (Registration No. 333-31709))
|
|
|
4.3
|
|
|
Amendment to Rights Agreement, dated as of
June 30, 2000, between Valero Energy Corporation (formerly
known as Valero Refining and Marketing Company), Harris Trust
and Savings Bank and Computershare Investor Services, LLC, as
Rights Agent (incorporated by reference to Exhibit 4.02 to
the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2003 (SEC file no. 1-13175))
|
|
|
4.4
|
|
|
Amendment No. 1 to Rights Agreement, dated
as of May 4, 2001, between Valero Energy Corporation and
Computershare Investor Services, LLC, as Rights Agent
(incorporated by reference to Exhibit 4.4 to the
Company’s Registration Statement on Form 8-A/ A (SEC
file no. 1-13175))
|
|
|
4.5
|
|
|
Certificate of Designation of 2% Mandatory
Convertible Preferred Stock (incorporated by reference to
Exhibit 4.2.1 to the Company’s Registration Statement
on Form S-3 (Registration No. 333-106949))
|
|
|
4.6
|
|
|
Form of 2% Mandatory Convertible Preferred Stock
(incorporated by reference to Exhibit 4.2.2 to the
Company’s Registration Statement on Form S-3
(Registration No. 333-106949))
|
|
|
4.7
|
|
|
Indenture, between Valero Energy Corporation and
Bank of New York, dated as of June 18, 2004 (the
“Senior Indenture”)
|
|
|
4.8
|
|
|
Form of Indenture related to subordinated debt
securities (the “Subordinated Indenture”)
|
|
|
4.9.1
|
|
|
Declaration of Trust of VEC Trust III
(incorporated by reference to Exhibit 4.8.1 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
|
|
4.9.2
|
|
|
Declaration of Trust of VEC Trust IV
(incorporated by reference to Exhibit 4.8.2 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
|
|
4.10
|
|
|
Form of Amended and Restated Declaration of Trust
|
|
|
4.11.1
|
|
|
Certificate of Trust of VEC Trust III
(incorporated by reference to Exhibit 4.10.1 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
|
|
|
|
|
|
|
Exhibit
|
|
|
|
Number
|
|
Description
|
|
|
|
|
|
4.11.2
|
|
|
Certificate of Trust of VEC Trust IV
(incorporated by reference to Exhibit 4.10.2 to the
Company’s Registration Statement on Form S-3
(Registration Nos. 333-84820, 333-84820-01 and 333-84820-02))
|
|
|
4.12
|
|
|
Form of Trust Preferred Security (included in
Exhibit 4.10)
|
|
|
4.13
|
|
|
Form of Valero Energy Corporation Guarantee
Agreement
|
|
|
5.1
|
|
|
Opinion of Jay D. Browning, Esq.
|
|
|
5.2.1
|
|
|
Opinion of Richards, Layton & Finger,
P.A. relating to VEC Trust III
|
|
|
5.2.2
|
|
|
Opinion of Richards, Layton & Finger,
P.A. relating to VEC Trust IV
|
|
|
12.1
|
|
|
Computation of ratio of earnings to fixed charges
and ratio of earnings to combined fixed charges and preferred
stock dividends (incorporated by reference to Exhibit 12.1
to the Company’s Quarterly Report on Form 10-Q/ A for
the quarterly period ended March 31, 2004 (SEC file no.
1-13175))
|
|
|
23.1
|
|
|
Consent of Ernst & Young LLP
|
|
|
23.2
|
|
|
Consents of PricewaterhouseCoopers LLP
|
|
|
23.3
|
|
|
Consent of Jay D. Browning, Esq. (included
in Exhibit 5.1)
|
|
|
23.4
|
|
|
Consent of Richards, Layton & Finger,
P.A. (included in Exhibits 5.2.1 and 5.2.2)
|
|
|
24.1
|
|
|
Powers of Attorney (included on signature page)
|
|
|
25.1
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
trustee under the Senior Indenture, on Form T-1
|
|
|
25.2
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
trustee under the Subordinated Indenture, on Form T-1
|
|
|
25.3.1
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
property trustee, relating to VEC Trust III, on
Form T-1
|
|
|
25.3.2
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
property trustee, relating to VEC Trust IV, on Form T-1
|
|
|
25.4.1
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
guarantee trustee, relating to VEC Trust III, on
Form T-1
|
|
|
25.4.2
|
|
|
Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of The Bank of New York, as
guarantee trustee, relating to VEC Trust IV, on
Form T-1
|
|
|
|
|
*
|
The Company will file as an exhibit to a Current
Report on Form 8-K (i) any underwriting, remarketing
or agency agreement relating to securities offered hereby,
(ii) the instruments setting forth the terms of any debt
securities, preferred stock, warrants or stock purchase
contracts, (iii) any additional required opinions of
counsel with respect to the legality of the securities offered
hereby and (iv) any required opinion of counsel to the
Company as to certain tax matters relative to securities offered
hereby.
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EXHIBIT 4.1
INCORPORATED UNDER THE LAWS COMMON STOCK
OF THE STATE OF DELAWARE
PAR VALUE $0.01 EACH
---------------- ----------------
NUMBER SHARES
VL (GRAPHIC) ** **
---------------- ----------------
THIS CERTIFICATE IS TRANSFERABLE IN CUSIP 91913Y 10 0
CHICAGO, IL AND NEW YORK, N.Y. SEE REVERSE FOR
CERTAIN DEFINITIONS
(VALERO ENERGY CORPORATION LOGO)
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This certifies that
is the owner of
FULLY-PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
Valero Energy Corporation (hereinafter referred to as the "corporation")
transferable upon the books of the corporation by the holder hereof in person
or by his duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid unless countersigned by a Transfer
Agent and registered by a Registrar.
Witness the facsimile signatures of its duly authorized officers.
Dated
Countersigned and Registered:
COMPUTERSHARE INVESTOR SERVICES, LLC
Transfer Agent
and Registrar
Wm E Greehey Jay Browning By (ILLEGIBLE)
Chairman of the Board Corporate Secretary Authorized Signature
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[VALERO ENERGY CORPORATION LOGO]
VALERO ENERGY CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH
STOCKHOLDER WHO SO REQUESTS A STATEMENT OR SUMMARY OF THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF
EACH CLASS OF STOCK OR SERIES THEREOF WHICH THE CORPORATION IS AUTHORIZED TO
ISSUE AND OF THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES
AND/OR RIGHTS. ANY SUCH REQUEST IS TO BE ADDRESSED TO THE TRANSFER AGENT NAMED
ON THE FACE OF THIS CERTIFICATE.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT- ________Custodian _______
TEN ENT - as tenants by the (Cust) (Minor)
entireties under Uniform Gifts to Minors
JT TEN - as joint tenants with Act _________________________
right of survivorship (State)
and not as tenants
in common
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Additional abbreviations may also be used though not in the above list.
For value received, ________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
| |
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________________________________________________________________________________
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PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.
Dated, ________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE GUARANTEE:
The signature(s) must be guaranteed
by an eligible guarantor institution
(Banks, Brokers, Savings and Loan
Associations, and Credit Unions with
membership in an approved signature
guarantee Medallion Program),
pursuant to S.E.C. rule 17Ad-15.
This certificate also evidences and entitles the holder hereof to certain rights
as set forth in a Rights Agreement, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of Valero Energy Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. Valero Energy Corporation
will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights issued to any Person
who becomes an Acquiring Person (as defined in the Rights Agreement) may become
null and void.
EXHIBIT 4.7
INDENTURE, VEC AND BANK OF NEW YORK
VALERO ENERGY CORPORATION
AND
THE BANK OF NEW YORK, as Trustee
Indenture
Dated as of June 18, 2004
Debt Securities
VALERO ENERGY CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of June 18, 2004
Trust Indenture Act Section Indenture Section
Sec. 310(a)(1)...................................................................................................................608
(a)(2)...................................................................................................................608
(a)(3)........................................................................................................Not Applicable
(a)(4) .......................................................................................................Not Applicable
(a)(5)...................................................................................................................608
Sec. 311(a)..................................................................................................................... 609
(b)......................................................................................................................605
Sec. 312(a)................................................................................................................ 605, 703
(b).................................................................................................................701, 702
(c)......................................................................................................................702
Sec. 313(a).................................................................................................................. 703(a)
(b)(1)........................................................................................................Not Applicable
(b)(2)................................................................................................................703(b)
(c)...................................................................................................................703(c)
(d)...................................................................................................................703(c)
Sec. 314(a)(1)...................................................................................................................704
(a)(2)...................................................................................................................704
(a)(3)...................................................................................................................704
(a)(4)..................................................................................................................1005
(b)...........................................................................................................Not Applicable
(c)(1)...................................................................................................................102
(c)(2)...................................................................................................................102
(c)(3)........................................................................................................Not Applicable
(d)...........................................................................................................Not Applicable
(e)......................................................................................................................102
Sec. 315(a).................................................................................................................. 601(a)
(b)......................................................................................................................602
(c)...................................................................................................................601(b)
(d)...................................................................................................................601(c)
(d)(1).....................................................................................................601(a)(1), (c)(1)
(d)(2).............................................................................................................601(c)(2)
(d)(3).............................................................................................................601(c)(3)
(e)......................................................................................................................514
Sec. 316(a)(1)(A)...........................................................................................................502, 512
(a)(1)(B)................................................................................................................513
(a)(2)........................................................................................................Not Applicable
(b)......................................................................................................................508
(c)...........................................................................................................Not Applicable
Sec. 317(a)(1)...................................................................................................................503
(a)(2)...................................................................................................................504
(b).....................................................................................................................1003
Sec. 318(a)..................................................................................................................... 108
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
PARTIES......................................................................................................................1
RECITALS.....................................................................................................................1
ARTICLE One DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.......................................1
SECTION 101. Definitions....................................................................................................1
"Act".............................................................................................................2
"Additional Amounts"..............................................................................................2
"Affiliate".......................................................................................................2
"Authenticating Agent"............................................................................................2
"Authorized Newspaper"............................................................................................2
"Bearer Security".................................................................................................2
"Board of Directors"..............................................................................................2
"Board Resolution"................................................................................................2
"Business Day"....................................................................................................2
"Commission"......................................................................................................2
"Company".........................................................................................................3
"Company Request".................................................................................................3
"Consolidated Net Tangible Assets"................................................................................3
"Corporate Trust Office"..........................................................................................3
"corporation".....................................................................................................3
"coupon"..........................................................................................................3
"Defaulted Interest"..............................................................................................3
"Dollars".........................................................................................................3
"Event of Default"................................................................................................3
"Funded Debt".....................................................................................................3
"Holder"..........................................................................................................3
"Indenture".......................................................................................................3
"interest"........................................................................................................4
"Interest Payment Date"...........................................................................................4
"Maturity"........................................................................................................4
"Mortgages".......................................................................................................4
"Officers' Certificate"...........................................................................................4
"Opinion of Counsel"..............................................................................................4
"Original Issue Discount Security"................................................................................4
"Outstanding".....................................................................................................4
"Paying Agent"....................................................................................................5
"Person"..........................................................................................................5
"Place of Payment"................................................................................................5
"Predecessor Security"............................................................................................5
"Redemption Date".................................................................................................5
"Redemption Price"................................................................................................5
"Registered Security".............................................................................................5
"Regular Record Date".............................................................................................5
"Responsible Officer".............................................................................................6
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"Sale and Leaseback Transactions".................................................................................6
"Security"........................................................................................................6
"Security Register"...............................................................................................6
"Special Record Date".............................................................................................6
"Stated Maturity".................................................................................................6
"Subsidiary"......................................................................................................6
"Trustee".........................................................................................................6
"Trust Indenture Act".............................................................................................6
"United States"...................................................................................................7
"United States Alien".............................................................................................7
"U.S. Depository".................................................................................................7
"Vice President"..................................................................................................7
"Voting Stock"....................................................................................................7
SECTION 102. Compliance Certificates and Opinions........................................................................7
SECTION 103. Form of Documents Delivered to Trustee......................................................................8
SECTION 104. Acts of Holders.............................................................................................8
SECTION 105. Notices etc. to Trustee and Company........................................................................10
SECTION 106. Notice to Holders of Securities; Waiver....................................................................11
SECTION 107. Language of Notices, etc...................................................................................11
SECTION 108. Conflict with Trust Indenture Act..........................................................................12
SECTION 109. Effect of Headings and Table of Contents...................................................................12
SECTION 110. Successors and Assigns.....................................................................................12
SECTION 111. Separability Clause........................................................................................12
SECTION 112. Benefits of Indenture......................................................................................12
SECTION 113. Governing Law..............................................................................................12
SECTION 114. Legal Holidays.............................................................................................12
SECTION 115. No Recourse Against Others.................................................................................13
ARTICLE TWO SECURITY FORMS.........................................................................................13
SECTION 201. Forms Generally............................................................................................13
SECTION 202. Form of Trustee's Certificate of Authentication............................................................13
ARTICLE THREE THE SECURITIES.........................................................................................14
SECTION 301. Amount Unlimited; Issuable in Series.......................................................................14
SECTION 302. Denominations..............................................................................................16
SECTION 303. Execution, Authentication, Delivery and Dating.............................................................16
SECTION 304. Temporary Securities.......................................................................................18
SECTION 305. Registration, Transfer and Exchange........................................................................18
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities...........................................................21
SECTION 307. Payment of Interest; Interest Rights Preserved.............................................................22
SECTION 308. Persons Deemed Owners......................................................................................24
SECTION 309. Cancellation...............................................................................................24
SECTION 310. Computation of Interest....................................................................................24
SECTION 311. Cusip Numbers..............................................................................................25
ARTICLE FOUR SATISFACTION AND DISCHARGE.............................................................................25
SECTION 401. Satisfaction and Discharge of Indenture....................................................................25
SECTION 402. Application of Trust Money.................................................................................26
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ii
ARTICLE FIVE REMEDIES...............................................................................................26
SECTION 501. Events of Default..........................................................................................26
SECTION 502. Acceleration of Maturity; Rescission and Annulment.........................................................27
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee............................................28
SECTION 504. Trustee May File Proofs of Claim...........................................................................29
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons......................................................................................30
SECTION 506. Application of Money Collected.............................................................................30
SECTION 507. Limitation on Suits........................................................................................30
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.......................................................................................31
SECTION 509. Restoration of Rights and Remedies.........................................................................31
SECTION 510. Rights and Remedies Cumulative.............................................................................31
SECTION 511. Delay or Omission Not Waiver...............................................................................32
SECTION 512. Control by Holders of Securities...........................................................................32
SECTION 513. Waiver of Past Defaults....................................................................................32
SECTION 514. Undertaking for Costs......................................................................................32
SECTION 515. Waiver of Stay, Extension or Usury Laws....................................................................33
ARTICLE SIX THE TRUSTEE............................................................................................33
SECTION 601. Certain Duties and Responsibilities........................................................................33
SECTION 602. Notice of Defaults.........................................................................................34
SECTION 603. Certain Rights of Trustee..................................................................................35
SECTION 604. Not Responsible for Recitals or Issuance of Securities.....................................................36
SECTION 605. May Hold Securities........................................................................................36
SECTION 606. Money Held in Trust........................................................................................36
SECTION 607. Compensation and Reimbursement.............................................................................36
SECTION 608. Corporate Trustee Required; Eligibility....................................................................37
SECTION 609. Resignation and Removal; Appointment of Successor..........................................................37
SECTION 610. Acceptance of Appointment by Successor.....................................................................39
SECTION 611. Merger, Conversion, Consolidation or Succession to Business................................................40
SECTION 612. Appointment of Authenticating Agent........................................................................40
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY............................................................................................42
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders..................................................42
SECTION 702. Preservation of Information; Communications to Holders.....................................................42
SECTION 703. Reports by Trustee.........................................................................................43
SECTION 704. Reports by Company.........................................................................................43
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE
OR CONVEYANCE..........................................................................................44
SECTION 801. Consolidations and Mergers of Company and Sales, Leases and Conveyances Permitted Subject to
Certain Conditions.........................................................................................44
SECTION 802. Rights and Duties of Successor Corporation.................................................................44
SECTION 803. Officers' Certificate and Opinion of Counsel...............................................................45
ARTICLE NINE SUPPLEMENTAL INDENTURES................................................................................45
SECTION 901. Supplemental Indentures without Consent of Holders.........................................................45
SECTION 902. Supplemental Indentures with Consent of Holders............................................................46
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iii
SECTION 903. Execution of Supplemental Indentures.......................................................................47
SECTION 904. Effect of Supplemental Indentures..........................................................................47
SECTION 905. Conformity with Trust Indenture Act........................................................................47
SECTION 906. Reference in Securities to Supplemental Indentures.........................................................47
ARTICLE TEN COVENANTS..............................................................................................48
SECTION 1001. Payment of Principal, Premium, if any, and Interest........................................................48
SECTION 1002. Maintenance of Office or Agency............................................................................48
SECTION 1003. Money for Securities Payments to be Held in Trust..........................................................49
SECTION 1004. Additional Amounts.........................................................................................50
SECTION 1005. Statement as to Compliance.................................................................................51
SECTION 1006. Waiver of Certain Covenants................................................................................51
SECTION 1007. Statement by Officers as to Default........................................................................51
ARTICLE ELEVEN NEGATIVE COVENANTS.....................................................................................52
SECTION 1101. Limitations on Mortgages...................................................................................52
SECTION 1102. Limitations on Sale and Leaseback Transactions.............................................................55
ARTICLE TWELVE REDEMPTION OF SECURITIES...............................................................................56
SECTION 1201. Applicability of Article...................................................................................56
SECTION 1202. Election to Redeem; Notice to Trustee......................................................................56
SECTION 1203. Selection by Trustee of Securities to be Redeemed..........................................................57
SECTION 1204. Notice of Redemption.......................................................................................57
SECTION 1205. Deposit of Redemption Price................................................................................58
SECTION 1206. Securities Payable on Redemption Date......................................................................58
SECTION 1207. Securities Redeemed in Part................................................................................59
ARTICLE THIRTEEN SINKING FUNDS..........................................................................................59
SECTION 1301. Applicability of Article...................................................................................59
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities......................................................60
SECTION 1303. Redemption of Securities for Sinking Fund..................................................................60
ARTICLE FOURTEEN REPAYMENT AT THE OPTION OF HOLDERS.....................................................................61
SECTION 1401. Applicability of Article...................................................................................61
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES.................................................................61
SECTION 1501. Purposes for Which Meetings May Be Called..................................................................61
SECTION 1502. Call, Notice and Place of Meetings.........................................................................61
SECTION 1503. Persons Entitled to Vote at Meetings.......................................................................62
SECTION 1504. Quorum; Action.............................................................................................62
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings........................................63
SECTION 1506. Counting Votes and Recording Action of Meetings............................................................64
ARTICLE SIXTEEN MISCELLANEOUS PROVISIONS..........................................................................64
SECTION 1601. Securities in Foreign Currencies...........................................................................64
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iv
INDENTURE, dated as of June 18, 2004, between VALERO ENERGY CORPORATION,
a Delaware corporation (hereinafter called the "Company"), having its principal
office at One Valero Way, San Antonio, Texas 78249, and THE BANK OF NEW YORK, a
New York banking corporation, as Trustee (hereinafter called the "Trustee")
having its Corporate Trust Office at 101 Barclay Street, Floor 21 West, New
York, New York 10286.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures, notes
or other evidences of indebtedness (hereinafter called the "Securities"),
unlimited as to principal amount, to bear such rates of interest, to mature at
such time or times, to be issued in one or more series and to have such other
provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture and all things necessary to make this Indenture a valid and legally
binding agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the sum of one
dollar duly paid by the Company to the Trustee, the receipt of which is hereby
acknowledged, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
1
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms used principally in Article Six are defined in that
Article.
"Act" when used with respect to any Holder has the meaning specified
in Section 104.
"Additional Amounts" means any additional amounts which are required
by a Security or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain matters, including,
without limitation, taxes imposed on certain Holders, and which are owing to
such Holders.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 612 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper, in an official language of
the country of publication or in the English language, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form established pursuant
to Section 201 which is payable to bearer.
"Board of Directors" means either the Board of Directors of the
Company or any committee thereof duly authorized, with respect to any particular
matter, to act by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a day on which banking
institutions in The City of New York or in the City of San Antonio, Texas are
authorized or required by law to close, except as may otherwise be provided in
the form of Securities of any particular series pursuant to the provisions of
this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
2
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chief Executive
Officer, the President, a Vice President or by the Treasurer, and by an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Consolidated Net Tangible Assets" means the total amount of assets
shown on a consolidated balance sheet of the Company and its Subsidiaries,
prepared in accordance with generally accepted accounting principles, less (i)
all current liabilities (except current portion of long-term debt and capital
lease obligations, short-term debt and notes payable) and (ii) goodwill and
other intangible assets included on such balance sheet.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office is located at 101 Barclay Street, Floor 21 West, New York, New York
10286.
"corporation" includes corporations, associations, companies, limited
liability companies and business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollars" or "$" or any similar reference shall mean the currency of
the United States, except as may otherwise be provided in the form of Securities
of any particular series pursuant to the provisions of this Indenture.
"Event of Default" has the meaning specified in Section 501.
"Funded Debt" means any indebtedness for money borrowed, created,
issued, incurred, assumed or guaranteed which would, in accordance with
generally accepted accounting principles, be classified as long-term debt or
capital lease obligations, but in any event including all indebtedness for money
borrowed, whether secured or unsecured, maturing more than one year, or
extendible at the option of the obligor to a date more than one year, after the
date of determination thereof (excluding any amount thereof included in current
liabilities).
"Holder", when used with respect to any Security, means in the case
of a Registered Security, the Person in whose name the Security is registered in
the Security Register and in the case of a Bearer Security, the bearer thereof
and, when used with respect to any coupon, means the bearer thereof.
"Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, and shall include each
Officers' Certificate delivered to the Trustee pursuant to Section 303.
3
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity, and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 1004, includes such
Additional Amounts.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the applicable Securities.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, request for redemption or
otherwise.
"Mortgages" means mortgages, liens, pledges, security interests or
other encumbrances.
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer, the President, a Vice President or the Treasurer, and by an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
counsel for the Company.
"Original Issue Discount Security" means a Security issued pursuant
to this Indenture which provides for declaration of an amount less than the
principal thereof to be due and payable upon acceleration pursuant to Section
502.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities and any coupons thereto appertaining, provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, the
4
principal amount of an Original Issue Discount Security that may be counted in
making such determination and that shall be deemed to be Outstanding for such
purposes shall be equal to the amount of the principal thereof that could be
declared to be due and payable pursuant to the terms of such Original Issue
Discount Security at the time the taking of such action by the Holders of such
requisite principal amount is evidenced to the Trustee as provided in Section
104(a), and, provided further, that Securities owned beneficially by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor, other than Securities purchased in connection with the
distribution or trading thereof, shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or any
agency, instrumentality or political subdivision thereof or other entity of any
kind.
"Place of Payment" when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
provided pursuant to Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a lost, destroyed, mutilated or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the lost, destroyed, mutilated or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen coupon appertains.
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price" when used with respect to any Security to be
redeemed means the price at which it is to be redeemed as determined pursuant to
the provisions of this Indenture.
"Registered Security" means any Security established pursuant to
Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on a Registered
Security on any Interest Payment Date means the date, if any, specified in such
Security as the "Regular Record Date".
5
"Responsible Officer" when used with respect to the Trustee means any
vice president (whether or not designated by a number or a word or words added
before or after the title "vice president"), the treasurer, any assistant
treasurer, any trust officer or assistant trust officer, or any other officer of
the Trustee customarily performing functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Indenture.
"Sale and Leaseback Transactions" has the meaning specified in Section
1102.
"Security" or "Securities" means any Security or Securities, as the case
may be, authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified in
such Security or a coupon representing such installment of interest as the fixed
date on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means (i) any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the shares of Voting Stock, (ii) any
general partnership, joint venture or similar entity, of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% or the outstanding partnership or similar
interests and (iii) any limited partnership of which the Company or any of its
Subsidiaries is a general partner and which is consolidated with the Company for
financial reporting purposes pursuant to generally accepted accounting
principles. "Wholly owned", when used with reference to a Subsidiary, means a
Subsidiary of which all of the outstanding capital stock (except for qualifying
shares) or partnership or similar interests, as applicable, is owned by the
Company or by one or more wholly owned Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such with respect
to one or more series of Securities pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to the Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented
6
from time to time by rules or regulations adopted by the Commission under or in
furtherance of the purposes of such Act or provision, as the case may be.
"United States" means the United States of America (including the States
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to the Securities
of any series issuable or issued in whole or in part in the form of one or more
global Securities, the Person designated as U.S. Depository by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and, if so provided pursuant to
Section 301 with respect to the Securities of any series, any successor to such
Person. If at any time there is more than one such Person, "U.S. Depository"
shall mean, with respect to any series of Securities, the qualifying entity
which has been appointed with respect to the Securities of that series.
"Vice President" when used with respect to the Company shall mean any
Vice President of the Company whether or not designated by a number or a word or
words added before or after the title "Vice President".
"Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation provided that, for the
purposes hereof, stock which carries only the right to vote conditionally on the
happening of an event shall not be considered voting stock whether or not such
event shall have happened.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;
7
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant has
been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly
8
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
and so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company and any agent of
the Trustee or the Company, if made in the manner provided in this Section. The
record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1506.
Without limiting the generality of this Section 104, unless
otherwise established in or pursuant to a Board Resolution or set forth or
determined in an Officers' Certificate, or established in one or more indentures
supplemental hereto, pursuant to Section 301, a Holder, including a U.S.
Depository that is a Holder of a global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a U.S. Depository that
is a Holder of a global Security may provide its proxy or proxies to the
beneficial owners of interests in any such global Security through such U.S.
Depository's standing instructions and customary practices.
The Company shall fix a record date for the purpose of
determining the Persons who are beneficial owners of interest in any permanent
global Security held by a U.S. Depository entitled under the procedures of such
U.S. Depository to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other action provided in this Indenture to be made, given or taken by
Holders. If such a record date is fixed, the Holders on such record date or
their duly appointed proxy or proxies, and only such Persons shall be entitled
to make, give or take such request, demand, authorization, direction, notice,
consent, waiver or other action, whether or not such Holders remain Holders
after such record date. No such request, demand, authorization, direction,
notice, consent, waiver or other action shall be valid or effective if made,
given or taken more than 90 days after such record date.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(c) The ownership of Registered Securities and the principal
amount and serial numbers of Registered Securities held by any Person, and the
date of holding the same, shall be proved by the Security Register.
(d) The principal amount and serial numbers of Bearer Securities
held by any Person, and the date of holding the same, may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary reasonably
acceptable to the Company, wherever situated, if such certificate shall be
deemed by the Trustee to be satisfactory, showing that at the date therein
mentioned such Person had on deposit with such depositary, or exhibited to it,
the Bearer Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee
9
and the Company may assume that such ownership of any Bearer Security continues
until (1) another certificate or affidavit bearing a later date issued in
respect of the same Bearer Security is produced, or (2) such Bearer Security is
produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The principal amount and serial numbers of Bearer
Securities held by the Person so executing such instrument or writing and the
date of holding the same may also be proved in any other manner which the
Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of any
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its option, by Board
Resolution, fix in advance a record date for the determination of Holders of
Registered Securities entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of Registered Securities
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders of Registered Securities on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
SECTION 105. Notices etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, postage prepaid, via certified mail, return
receipt requested, to the Company addressed to the attention of its Treasurer at
the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
10
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein or in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, where this Indenture provides for notice to Holders of Securities of
any event,
(1) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage prepaid, to
each Holder of a Registered Security affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such Notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of New
York and, if the Securities of such series are then listed on any stock exchange
outside the United States, in an Authorized Newspaper in such city as the
Company shall advise the Trustee that such stock exchange so requires, on a
Business Day at least twice, the first such publication to be not earlier than
the earliest date and not later than the latest date prescribed for the giving
of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be equivalent of such notice.
Waivers of notice by Holders of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. Language of Notices, etc.
Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication.
11
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provisions shall
control.
SECTION 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the parties hereto
shall bind the successors and assigns of such parties, whether so expressed or
not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or in the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent and their successors hereunder and the Holders of
Securities or coupons, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 113. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
controlled in accordance with the laws of the State of New York without regard
to the conflicts of laws provisions thereof.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or the Securities or
coupons other than a provision in the Securities which specifically states that
such provision shall apply in lieu of this Section) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day, except that if
such next succeeding Business Day is in the next succeeding calendar year, then
on the immediately preceding Business Day, at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
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SECTION 115. No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of
the Company or the Trustee, as such, shall not have any liability for any
obligations of the Company under the Securities or for any obligations of the
Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of Securities.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series, related coupons, if any, and temporary
global Securities, if any, shall be in the form established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, shall have
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto and
may have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
registered form without coupons. If so provided as contemplated by Section 301,
the Securities of a series also shall be issuable in bearer form, with or
without interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as conclusively evidenced
by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated: .................. By:.......................
Authorized Signatory
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto:
(1) the title of the Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the
Securities of such title or the Securities of such series which may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Section 304, 305,
306, 906 or 1207);
(3) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both; any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa; and whether any Securities
of the series are to be issuable initially in global form and, if so, (i)
whether beneficial owners of interests in any such global Security may exchange
such interests for Securities of such series and of like tenor of any authorized
form and denomination and the circumstances under which any such exchanges may
occur, if other than in the manner specified in Section 305 and (ii) the name of
the depository or the U.S. Depository, as the case may be, with respect to any
global Security;
(4) the date as of which any Bearer Securities of the series and
any temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary Bearer
Security in global form (representing all of the Outstanding Bearer Securities
of the series) payable in respect of an Interest Payment Date prior to the
exchange of such temporary Bearer Security for definitive Securities of the
series shall be paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be credited to
the Persons entitled to interest payable on such Interest Payment Date;
(6) the date or dates on which the principal of such Securities
is payable;
14
(7) the rate or rates at which such Securities shall bear
interest, if any, or any method by which such rate or rates shall be determined,
the date or dates from which such interest shall accrue, the Interest Payment
Dates on which such interest shall be payable and the Regular Record Date for
the interest payable on Registered Securities on any Interest Payment Date,
whether and under what circumstances Additional Amounts on such securities shall
be payable in respect of specified taxes, assessments or other governmental
charges withheld or deducted and, if so, whether the Company has the option to
redeem the affected Securities rather than pay such Additional Amounts, and the
basis upon which interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;
(8) the place or places, if any, in addition to or other than
the Borough of Manhattan, The City of New York, where the principal of (and
premium, if any) and interest on such Securities shall be payable;
(9) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Securities may be redeemed,
in whole or in part, at the option of the Company;
(10) the obligation, if any, of the Company to redeem or
purchase such Securities pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which such Securities
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation, and any provisions for the remarketing of such Securities;
(11) the denominations in which Registered Securities of the
series, if any, shall be issuable if other than denominations of $1,000 and any
integral multiple thereof, and the denominations in which Bearer Securities of
the series, if any, shall be issuable if other than the denomination of $5,000;
(12) if other than the principal amount thereof, the portion of
the principal amount of such Securities which shall be payable upon declaration
of acceleration of the Maturity thereof pursuant to Section 502;
(13) if other than the currency of the United States, the coin
or currency, including composite currencies, in which payment of the principal
of (and premium, if any) and interest, if any, on such Securities shall be
payable;
(14) if the principal of (and premium, if any) or interest, if
any, on such Securities are to be payable, at the election of the Company or a
Holder thereof, in a coin or currency, including composite currencies, other
than that in which the Securities are stated to be payable, the period or
periods within which, and the terms and conditions upon which, such election may
be made;
(15) if the amount of payments of principal of (and premium, if
any) or interest, if any, on such Securities may be determined with reference to
an index, formula or other method or based on a coin or currency other than that
in which the Securities are stated to be payable, the manner in which such
amounts shall be determined;
15
(16) the right, if any, of the Company to defer payments of interest by
extending the interest payment periods and specify the duration of such
extension, the Interest Payment Dates on which such interest shall be payable
and whether and under what circumstances additional interest on amounts deferred
shall be payable;
(17) the limitation, if any, on the Company's right to pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or comparable
equity interest;
(18) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and terms of such certificates,
documents or conditions; and
(19) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, and Stated Maturity, the
date from which interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time, and unless otherwise provided, a
series may be reopened for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
SECTION 302. Denominations.
Unless other denominations and amounts may from time to time be fixed by
or pursuant to a Board Resolution, the Registered Securities of each series, if
any, shall be issuable in registered form without coupons in denominations of
$1,000 and any integral multiple thereof and the Bearer Securities of each
series, if any, shall be issuable in the denomination of $5,000, or in such
other denominations and amounts as may from time to time be fixed by or pursuant
to a Board Resolution.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chief
Executive Officer, President, Vice President serving as Chief Financial Officer
or its Treasurer and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile. Coupons shall bear the facsimile signature of the Treasurer
or any Assistant Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding
16
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Securities or did not hold such offices
at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with the Board Resolution and Officers' Certificate or
supplemental indenture with respect to such Securities referred to in Section
301 and a Company Order for the authentication and delivery of such Securities,
and the Trustee in accordance with the Company Order and subject to the
provisions hereof shall authenticate and make available for delivery such
Securities. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) the form and terms of such Securities and coupons, if any, have been
established in conformity with the provisions of this Indenture;
(b) that all conditions precedent to the authentication and delivery of
such Securities, together with the coupons, if any, appertaining thereto, have
been complied with and that such Securities and coupons, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles,
(c) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities and coupons, if any, have been
complied with; and
(d) as to such other matters as the Trustee may reasonably request.
The Trustee shall not be required to authenticate such Securities if the
issue of such Securities pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee or if
the Trustee being advised by counsel determines that such action may not
lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any temporary Bearer Security in global form shall be
dated as of the date specified as contemplated by Section 301.
No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose, unless
there appears on such Security a certificate of authentication substantially in
the form provided for in Section 202 or 612 executed by or on behalf of the
Trustee by the manual signature of one of its authorized signers, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Except as permitted by Section
17
306 or 307, the Trustee shall not authenticate and deliver any Bearer Security
unless all appurtenant coupons for interest then matured have been detached and
cancelled.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute and deliver to the Trustee, and upon Company Order the
Trustee shall authenticate and make available for delivery in the manner
provided in Section 303, temporary Securities of such series which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued, in registered form, or, if authorized, in bearer form
with one or more coupons or without coupons, and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities. In the case of Bearer Securities of any series, such temporary
Securities may be in global form, representing all of the Outstanding Bearer
Securities of such series.
Except in the case of temporary Securities in global form, which shall
be exchanged in accordance with the provisions thereof, if temporary Securities
of any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series containing identical terms
and provisions upon surrender of the temporary Securities of such series at an
office or agency of the Company maintained for such purpose pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto) the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations of the
same series containing identical terms and provisions; provided, however, that
no definitive Bearer Security, except as provided pursuant to Section 301, shall
be delivered in exchange for a temporary Registered Security; and provided,
further, that a definitive Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set forth
therein. Unless otherwise specified as contemplated by Section 301 with respect
to a temporary global Security, until so exchanged the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.
SECTION 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept at an office or agency of the Company maintained
pursuant to Section 1002, a register (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of each series and of transfers of the Registered Securities of each
series. Such office or agency shall be the "Security Registrar" for the
Registered Securities, if any, of each series of Securities. In the event that
the Trustee shall not be the Security Registrar, it shall have the right to
examine the Security Register at all reasonable times.
18
Upon surrender for registration of transfer of any Registered Security
of any series at any office or agency of the Company maintained for that series
pursuant to Section 1002, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series, of any authorized denominations, of a like aggregate principal amount
bearing a number not contemporaneously outstanding and containing identical
terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Registered Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, the Registered Securities which the holder making
the exchange is entitled to receive.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series containing identical
terms and provisions, of any authorized denominations and aggregate principal
amount, upon surrender of the Bearer Securities to be exchanged at any such
office or agency, with all unmatured coupons and all matured coupons in default
thereto appertaining. If the Holder of a Bearer Security is unable to produce
any such unmatured coupon or coupons or matured coupon or coupons in default,
such exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company and the Trustee in an amount equal to
the face amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 1002, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be (or, if
such coupon is so surrendered with such Bearer Security, such coupon shall be
returned to the person so surrendering the Bearer Security), and interest or
Defaulted Interest, as the case may be, will not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
If expressly provided with respect to the Securities of any series, at
the option of the Holder, Registered Securities of such series may be exchanged
for Bearer Securities upon such terms and conditions as may be provided with
respect to such series.
19
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable only if
(i) the Securities Depository notifies the Company that it is unwilling or
unable to continue as Securities Depository and a successor depository is not
appointed by the Company within 60 days, (ii) the Company executes and delivers
to the Trustee a Company Order to the effect that such global Security shall be
so exchangeable, or (iii) an Event of Default has occurred and is continuing
with respect to the Securities and the Security Registrar has received a request
from the Securities Depository to issue Securities in lieu of all or a portion
of the global Security. If the beneficial owners of interests in a global
Security are entitled to exchange such interests for Securities of such series
and of like tenor and principal amount of any authorized form and denomination,
as specified as contemplated by Section 301, then without unnecessary delay but
in any event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities of
that series in aggregate principal amount equal to the principal amount of such
global Security, executed by the Company. On or after the earliest date on which
such interests may be so exchanged, such global Securities shall be surrendered
from time to time by the U.S. Depository or such other depository as shall be
specified in the Company Order with respect thereto, and in accordance with
instructions given to the Trustee and the U.S. Depository or such depository, as
the case may be (which instructions shall be in writing but need not comply with
Section 102 or be accompanied by an Opinion of Counsel), as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose, to be exchanged, in whole or in part, for definitive
Securities of the same series without charge. The Trustee shall authenticate and
make available for delivery, in exchange for each portion of such surrendered
global Security, a like aggregate principal amount of definitive Securities of
the same series of authorized denominations and of like tenor as the portion of
such global Security to be exchanged which (unless the Securities of the series
are not issuable both as Bearer Securities and as Registered Securities, in
which case the definitive Securities exchanged for the global Security shall be
issuable only in the form in which the Securities are issuable, as specified as
contemplated by Section 301) shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof; provided, however, that no such exchanges may occur
during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending on the relevant
Redemption Date; and provided, further, that (unless otherwise specified as
contemplated by Section 301) no Bearer Security delivered in exchange for a
portion of a global Security shall be mailed or otherwise delivered to any
location in the United States. Promptly following any such exchange in part,
such global Security shall be returned by the Trustee to such depository or the
U.S. Depository, as the case may be, or such other depository or U.S. Depository
referred to above in accordance with the instructions of the Company referred to
above. If a Registered Security is issued in exchange for any portion of a
global Security after the close of business at the office or agency where such
exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of interest or Defaulted
Interest, as the case may be, interest will not be payable on such Interest
Payment Date or proposed date for payment,
20
as the case may be, in respect of such Registered Security, but will be payable
on such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer, or for exchange or redemption shall (if so required by the Company or
the Security Registrar for such series of Security presented) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and such Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1206 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Securities of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1203 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not to be redeemed, or (iii) to exchange
any Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series, provided
that such Registered Security shall be immediately surrendered for redemption
with written instruction for payment consistent with the provisions of this
Indenture.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a new Security of the same series containing identical terms and of
like principal amount and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to the
surrendered Securities.
If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or coupon,
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains
21
(with all appurtenant coupons not destroyed, lost or stolen), a new Security of
the same series containing identical terms and of like principal amount and
bearing a number not contemporaneously outstanding, with coupons corresponding
to the coupons, if any, appertaining to such destroyed, lost or stolen Security
or to the Security to which such destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or coupon; provided,
however, that payment of principal of (and premium, if any) and any interest on
Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and its counsel)
connected therewith.
Every new Security of any series, with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall, if so provided in
such Security, be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an office or agency in a Place of Payment for such series) on
any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
Any interest on any Registered Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
for such Registered Security
22
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such Holder,
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities affected (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Registered
Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of such Registered
Securities at his address as it appears in the Security Register not less than
10 days prior to such Special Record Date. The Trustee may in the name and at
the expense of the Company, cause a similar notice to be published at least once
in a newspaper, customarily published in the English language on each Business
Day and of general circulation in the Borough of Manhattan, The City of New
York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Registered Securities (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2). In case a Bearer
Security of any series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment and
Defaulted Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such payment shall be deemed
practicable by the Trustee.
23
At the option of the Company, interest on Registered Securities of any
series that bear interest may be paid by mailing a check to the address of the
person entitled thereto as such address shall appear in the Security Register.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue interest, which were carried by such
other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 307)
interest on such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities and coupons held by the Trustee shall be disposed of by the Trustee
in its customary manner.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, or as set forth in any supplemental indenture,
interest on the Securities of each series shall be computed on the basis of a
360-day year of twelve 30-day months or, for any period shorter than a full
three months, on the basis of the actual number of days elapsed in such period.
24
SECTION 311. Cusip Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
Upon the direction of the Company by a Company Order this Indenture
shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided for
and any right to receive Additional Amounts, as provided in Section 1004), and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when
(1) either
(A) all Securities theretofore authenticated and delivered and all
coupons appertaining thereto (other than (i) coupons appertaining to Bearer
Securities surrendered for exchange for Registered Securities and maturing after
such exchange, whose surrender is not required or has been waived as provided in
Section 305, (ii) Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 306, (iii)
coupons appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in Section
1206, and (iv) Securities and coupons for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities and, in the case of (i) or (ii) below, any
such coupons appertaining thereto not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the
25
Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such Securities and
coupons not theretofore delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of all series as to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instrument from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive such satisfaction and discharge.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and any interest for whose payment such money has been
deposited with the Trustee; but such money need not be segregated from other
funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
26
(1) default in the payment of any interest upon any Security of that
series when such interest becomes due and payable, and continuance of such
default for a period of 30 days; provided, however, that a valid extension of an
interest payment period by the Company in accordance with the terms of the
Securities of such series shall not constitute a default in the payment of
interest for this purpose; or
(2) default in the payment of the principal of (and premium, if any, on)
any Security of that series when it becomes due and payable at Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due
by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with or which has been expressly included in this Indenture solely for the
benefit of series of Securities other than that series), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any substantial part of
its property, or ordering the winding-up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(6) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due or shall take any corporate action
in furtherance of any of the foregoing; or
(7) any other Event of Default provided with respect to Securities of
that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal of all the
Securities of that series, or such lesser amount as may be provided for in the
Securities of that series, to be due and payable immediately, by a notice in
writing to the Company (and to the
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Trustee if given by the Holders), and upon any such declaration such principal
or such lesser amount shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Event of Default giving rise to such declaration of
acceleration shall, without further act, be deemed to have been waived, and such
declaration and its consequences shall, without further act, be deemed to have
been rescinded and annulled, if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Securities
of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates borne by or provided for
in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate or rates borne by or
provided for in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series which
has become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
If an Event of Default specified in Section 502 (1) or Section 502 (2)
occurs and is continuing, the Company will, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest, with interest upon the overdue principal (and
premium, if any) and, to the extent that payment of such interest shall be
legally enforceable, upon overdue installments of interest at the rate or rates
borne by or provided for in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection
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of the sums so due and unpaid, and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any other obligor
upon such Securities and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other
obligor upon such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of that series, of
principal (and premium, if any) and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents or counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder of
Securities and coupons to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities and coupons, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
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SECTION 505. Trustee May Enforce Claims Without Possession of Securities
or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery or judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (and premium,
if any) or interest, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and its agents
and counsel under Section 607;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for principal (and premium, if any) and interest in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the aggregate
amounts due and payable on such Securities and coupons for principal (and
premium, if any) and interest, respectively;
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or Holders of any other series, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on such Security or payment of such coupon on the
respective Stated Maturity or Maturities expressed in such Security or coupon
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion of employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders of Securities or coupons may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of other
Holders of Securities of such series.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (and premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party
32
litigant in such suit, other than the Trustee, of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in such suit, including the Trustee, having due regard to the merits
and good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Company, the Trustee or by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Holder of any Security or coupon for
the enforcement of the payment of the principal of (and premium, if any) or
interest on any Security or the payment of any coupon on or after the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
or after the Redemption Date) or interest on any overdue principal of any
Security.
SECTION 515. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties, and only
such duties, as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee
or any predecessor Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions (whether in their
original or facsimile form) furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this Indenture
(but need not confirm or investigate the accuracy of any facts or mathematical
calculations stated therein).
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
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(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Securities of any series, relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to the
Securities of such series; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series entitled to receive reports pursuant to
Section 703(c), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived, provided, however, that, except in
the case of a default in the payment of the principal of (and premium, if any)
or interest on any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the Holders of
Securities and coupons of such series; and provided, further, that in the case
of any default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
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SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, or other paper or document (whether in its
original or facsimile form) reasonably believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order (other
than delivery of any Security to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors shall be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the
Issuer and shall incur no liability of any kind solely by reason of such
inquiry or investigation;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder;
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(h) in no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action;
(i) the Trustee shall not be deemed to have notice of any Event
of Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder; and
(k) the Trustee may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with
the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
36
(1) to pay to the Trustee from time to time such compensation as
the parties shall agree to in writing from time to time for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursements
or advance as shall be determined to have been caused by its own negligence, bad
faith or willful misconduct; and
(3) to indemnify each of the Trustee, any predecessor Trustee
and their respective agents for, and to hold them harmless against, any and all
loss, liability, claim, damage or expense (including taxes other than taxes
based on the income of the Trustee) incurred without negligence, bad faith or
willful misconduct on their part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder.
As security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the Securities
of any series upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (or premium, if
any) or interest on Securities. The benefits of this Section shall survive
termination of this Indenture and resignation or removal of the Trustee.
SECTION 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a corporation
(or other person permitted to so act by the Commission) permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section or Section 310(a)(5) of the Trust Indenture
Act, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 610.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series giving written notice thereof to the Company.
If the instrument of acceptance by a successor Trustee required by Section 610
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may at the expense of the
Company petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to such series.
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(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 610 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the resigning Trustee may at the expense
of the Company petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to such series.
(d) If at any time:
(1) the Trustee shall fail to comply with the
obligations imposed upon it under Section 310(b) of the Trust Indenture Act with
respect to Securities of any series after written request therefor by the
Company or by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
608 and shall fail to resign after written request therefor by the Company or by
any such Holder of a Security, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or the Securities of such series, or (ii)
subject to Section 315(e) of the Trust Indenture Act, any Holder of a Security
who has been a bona fide Holder of a Security of any series for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect to
all Securities of such series and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 610. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
610, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and accepted
appointment in the manner required by Section 610, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six months
38
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any notice
given to, or received by, or any act or failure to act on the part of any other
Trustee hereunder, and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee shall with
respect to the Securities of that or those series to which the appointment of
such successor
39
Trustee relates have no further responsibility for the exercise of rights and
powers or for the performance of the duties and obligations vested in the
Trustee under this Indenture other than as hereinafter expressly set forth, and
each such successor Trustee without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 612. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue or exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes
40
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and to the extent
the Trustee makes such payments, the Trustee shall be entitled to be reimbursed
for such payments, subject to the provisions of Section 607.
The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form.
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
41
THE BANK OF NEW YORK,
as Trustee
Dated:........................... By: ............................
As Authenticating Agent
By: ............................
Authorized Signatory
|
If all of the Securities of any series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not comply
with Section 102) by the Company, shall appoint in accordance with this Section
612 an Authenticating Agent having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than fifteen days after the Regular
Record Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant
to Section 312 of the Trust Indenture Act.
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Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company, the
Trustee, any Paying Agent or any Security Registrar shall be held accountable by
reason of the disclosure of any information as to the names and addresses of the
Holders of Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the
first May 15 following the first issuance of Securities pursuant to Section 301,
if required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section
313(b) of the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in the
manner and to the Persons required by Sections 313(c) and 313(d) of the Trust
Indenture Act. The Company will notify the Trustee when any series of Securities
are listed on any securities exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of said sections, then it shall file with the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations and shall file a copy thereof with the Trustee within 30
days after such supplementary and periodic information, documents and reports
would have been required to be filed with the Commission;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
43
(3) transmit within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Section 703(c) with respect
to reports pursuant to Section 703(a), such summaries of any information,
documents and reports required to be filed by the Company pursuant to paragraphs
(1) and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
(4) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions.
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other corporation,
provided that in any such case, (i) either the Company shall be the continuing
corporation, or the successor corporation shall be a corporation organized and
existing under the laws of the United States or a State thereof and such
successor corporation shall expressly assume the due and punctual payment of the
principal of (and premium, if any) and any interest on all the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture satisfactory to the Trustee, executed and
delivered to a Responsible Officer of the Trustee by such corporation, and (ii)
the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 802. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, lease or conveyance and
upon any such assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part, and the
predecessor corporation, except in the event of a lease, shall be relieved of
any further obligation under this Indenture and the Securities and coupons. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities and
coupons issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities and coupons which previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Securities or coupons which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities and coupons so issued shall in all respects have the same legal
44
rank and benefit under this Indenture as the Securities and
coupons theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities and coupons had been issued at the
date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities and coupons thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel.
The Trustee, subject to the provisions of Sections 601 and 603, shall be
provided with an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and any
such assumption, complies with the provisions of this Article.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Securities contained; or
(2) to add to the covenants of the Company, for the benefit of
the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such series) or
to surrender any right or power herein conferred upon the Company; or
(3) to add to or change any of the provisions of this Indenture
to provide that Bearer Securities may be registrable as to principal, to change
or eliminate any restrictions on the payment of principal (or premium, if any)
on Registered Securities or of principal (or premium, if any) or any interest on
Bearer Securities, to permit Registered Securities to be exchanged for Bearer
Securities or to permit the issuance of Securities in uncertificated form,
provided any such action shall not adversely affect the interests of the Holders
of Securities of any series or any related coupons in any material respect; or
(4) to establish the form of terms of Securities of any series
as permitted by Sections 201 and 301; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate
45
the administration of the trusts hereunder by more than one Trustee, pursuant to
the requirements of Section 610 (b); or
(6) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent with the provisions
of this Indenture which shall not adversely affect the interest of the Holders
of Securities of any series or any related coupons in any material respect; or
(7) to add to, delete from or revise the conditions, limitations
and restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount thereof
or the rate of interest thereon or any Additional Amounts payable in respect
thereof, or any premium payable upon the redemption thereof, or change the
obligation of the Company to pay Additional Amounts pursuant to Section 1004
(except as contemplated by Section 801(i) and permitted by Section 901(1)), or
reduce the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or the interest thereon
is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section, or Section
513, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby.
46
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be provided with, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
47
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series in accordance
with the terms of such series of Securities, any coupons appertaining thereto
and this Indenture. Any interest due on Bearer Securities on or before Maturity,
other than Additional Amounts, if any, payable as provided in Section 1004 in
respect of principal of (or premium, if any, on) such a Security, shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of that series may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served. If Securities of
a series are issuable as Bearer Securities, the Company will maintain, subject
to any laws or regulations applicable thereto, an office or agency in a Place of
Payment for such series which is located outside the United States where
Securities of such series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Securities of such series pursuant to Section 1004); provided, however, that if
the Securities of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent in London, Luxembourg
or any other required city located outside the United States, as the case may
be, so long as the Securities of such series are listed on such exchange. The
Company will give prompt written notice to a Responsible Officer of the Trustee
of the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Bearer Securities of
that series pursuant to Section 1004) at the place specified for the purpose
pursuant to Section 301, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, payment of principal of and any
48
premium and interest in Dollars on any Bearer Security may be made at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York if (but only if) payment of the full amount of such principal, premium
or interest at all offices outside the United States maintained for the purpose
by the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency. Unless otherwise set forth in a Board Resolution or indenture
supplemental hereto with respect to a series of Securities, the Company hereby
designates as the Place of Payment for each series of Securities the Borough of
Manhattan, The City of New York, and initially appoints the Trustee at its
Corporate Trust Office as the Company's office or agency for each of such
purposes in such City.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any), or interest on, any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, on or prior to each due date of the principal of (and
premium, if any), or interest on, any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of that
series; and
49
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Except as otherwise provided in the form of Securities of any particular
series pursuant to the provisions of this Indenture, any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of (and premium, if any) or interest on any Security of
any series and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security or any coupon appertaining
thereto shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper in
each Place of Payment or to be mailed to Holders of Registered Securities, or
both, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.
SECTION 1004. Additional Amounts.
If the Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of any series or any
coupon appertaining thereto Additional Amounts as provided therein. Whenever in
this Indenture there is mentioned, in any context, the payment of the principal
of (or premium, if any) or interest on, or in respect of, any Security of any
series or any related coupon or the net proceeds received on the sale or
exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided for in this Section to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof pursuant to the provisions of this Section and express
mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest if there has been any change with
respect to the
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matters set forth in the below-mentioned Officers' Certificate, the Company will
furnish the Trustee and the Company's principal Paying Agent or Paying Agents,
if other than the Trustee, with an Officers' Certificate instructing the Trustee
and such Paying Agent or Paying Agents whether such payment of principal (and
premium, if any) or interest on the Securities of that series shall be made to
Holders of Securities of that series or the related coupons who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that Series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities or coupons and the Company will pay to the Trustee
or such Paying Agent the Additional Amounts required by this Section. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence, bad faith or intentional misconduct on their part arising
out of or in connection with actions taken or omitted by any of them in reliance
on any Officers' Certificate furnished pursuant to this Section.
SECTION 1005. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, a written statement, which need not comply with Section
102, signed by the Chief Executive Officer, the President or a Vice President
and by the Treasurer, an Assistant Treasurer, the Controller or an Assistant
Controller of the Company, stating, as to each signer thereof, that
(a) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision, and
(b) to the best of his knowledge, based on such review, (i) the Company
has fulfilled all of its obligations under this Indenture throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to him and the nature and status thereof, and
(ii) no event has occurred and is continuing which is, or after notice or lapse
of time or both would become, an Event of Default, or, if such an event has
occurred and is continuing, specifying each such event known to him and the
nature and status thereof.
SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1005, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
SECTION 1007. Statement by Officers as to Default.
The Company shall deliver to the Trustee, as soon as practicable and in
any event within five days after the Company becomes aware of the occurance of
any Event of Default or an
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event which, with notice or the lapse of time or both, would constitute an Event
of Default, an Officers' Certificate setting forth the details of such Event of
Default and the action which the Company proposes to take with respect thereto.
ARTICLE ELEVEN
NEGATIVE COVENANTS
SECTION 1101. Limitations on Mortgages
Nothing in this Indenture or in any Securities shall in any way restrict
or prevent the Company or any Subsidiary from incurring any indebtedness;
provided that the Company covenants and agrees that neither it nor any
Subsidiary will create or assume any Mortgages upon any receivable or other
asset or any interest it may have therein or of or upon any stock or
indebtedness of any Subsidiary, whether now owned or hereafter acquired (all
property and assets, tangible or intangible, real, personal or mixed, of
whatsoever kind or description, being referred to herein as "property"), without
effectively providing that any Securities then Outstanding and thereafter
created (together with, if the Company so determines, any other indebtedness or
obligation then existing and any other indebtedness or obligation thereafter
created ranking equally with such series of Securities) shall be secured equally
and ratably with (or prior to) such indebtedness or obligation as long as such
indebtedness or obligation shall be so secured, except that the foregoing
provision shall not apply to:
(a) Any Mortgage created by the Company or a Subsidiary to secure all or
part of the purchase price of any property (or to refund or refinance all or
part of such purchase price within 12 months of the acquisition of such
property) or to secure a loan made to enable the Company or a Subsidiary to
acquire the property described in such Mortgage; provided, however, that (i)
such Mortgage shall not encumber any other Property of the Company or a
Subsidiary (other than property constituting substitutions or replacements for,
or accessions to, property which is encumbered pursuant to after-acquired
property provisions of the agreements in accordance with which such Mortgages
were granted) and (ii) the principal amount of the indebtedness secured by any
such Mortgage, together with all other indebtedness secured by a Mortgage on
such property, shall not exceed the purchase price of such property;
(b) Any Mortgage existing on any property at the time of the acquisition
thereof by the Company or a Subsidiary whether or not assumed by the Company or
a Subsidiary, any Mortgage on any property acquired or constructed by the
Company or a Subsidiary and created not later than 12 months after (i) such
acquisition or completion of such construction or (ii) commencement of full
operation of such property, whichever is later, and any Mortgage on any property
with respect to which the Company or a Subsidiary has made additions,
substantial repairs, alterations or improvements and created not later than 12
months after completion of such additions, repairs, alterations or improvements;
provided, however, that (A) the principal amount of the indebtedness secured by
such Mortgage, together with all other indebtedness secured by a Mortgage on
such property, shall not exceed the purchase price of the property acquired, the
cost of the property constructed and/or the costs of such additions, repairs,
alterations or improvements and (B) such Mortgage does not extend to or cover
any property other than such property acquired, constructed, repaired, altered
and/or improved (other than property constituting substitutions or replacements
for, or accessions to, property which
52
is encumbered pursuant to after-acquired property provisions of the agreements
in accordance with which such Mortgages were granted);
(c) Any Mortgage created or assumed by the Company or a Subsidiary on
any contract for the sale of any product or service or any rights thereunder or
any proceeds therefrom, including accounts and other receivables, related to the
operation or use of any property acquired or constructed by the Company or a
Subsidiary and created not later than 12 months after (i) such acquisition or
completion of such construction or (ii) commencement of full operation of such
property, whichever is later;
(d) Any Mortgage existing on any property of an entity at the time it is
acquired by the Company or any of its Subsidiaries, whether through merger,
consolidation, purchase of assets or otherwise; provided, however, that such
Mortgage does not extend to any other property of the Company or any of its
Subsidiaries (other than property constituting substitutions or replacements
for, or accessions to, property which is encumbered pursuant to after-acquired
property provisions of the agreements in accordance with which such Mortgages
were granted);
(e) Mechanic's or materialmen's liens or any lien or charge arising by
reason of pledges or deposits to secure payment of workmen's compensation or
other insurance, good faith deposits in connection with tenders or leases of
real estate, bids or contracts, deposits to secure public or statutory
obligations, deposits to secure or in lieu of surety, stay or appeal bonds and
deposits as security for the payment of taxes or assessments or other similar
charges, and Mortgages arising in connection with statutory or contractual
set-off provisions granted or arising in the ordinary course of business;
(f) Any Mortgage arising by reason of deposits with or the giving of any
form of security to any governmental agency or any body created or approved by
law or governmental regulation for any purpose at any time as required by law or
governmental regulation as a condition to the transaction of any business or the
exercise of any privilege or license, or to enable the Company or a Subsidiary
to maintain self-insurance or to participate in any fund for liability on any
insurance risks or in connection with workmen's compensation, unemployment
insurance, old age pensions or other social security or to share in the
privileges or benefits required for companies participating in such
arrangements;
(g) The right reserved to, or vested in, any municipality or
governmental or other public authority or railroad by the terms of any right,
power, franchise, grant, license, permit, or by any provision of law, to
terminate or to require annual or other periodic payments as a condition to the
continuance of such right, power, franchise, grant, license or permit;
(h) Mortgages for taxes, assessments and governmental charges which are
not at the time delinquent or which are being contested in good faith by
appropriate proceedings by the Company or a Subsidiary;
(i) Mortgages due to zoning, planning and environmental laws and
ordinances and governmental regulations; minor defects or irregularities in or
encumbrances on the titles to properties which in the aggregate do not
materially impair the use of the property of the Company and its Subsidiaries,
taken as a whole, for the purposes for which it is held in the operation of the
business of the Company and its Subsidiaries; easements, exceptions or
53
reservations in any property of the Company or a Subsidiary granted or reserved
for the purpose of pipelines, roads, telecommunication equipment and cable,
streets, alleys, highways, railroad purposes, the removal of oil, gas, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real property, facilities and equipment, which do not materially impair
the use of the property of the Company and its Subsidiaries, taken as a whole,
for the purposes for which it is held in the operation of the business of the
Company and its Subsidiaries, or materially detract from the value of the
property subject thereto;
(j) Mortgages securing any obligation incurred in connection with the
rendering of a final judgment or award the execution of which has been stayed or
which has been appealed and secured, if necessary, by the filing of an appeal
bond and the claims secured thereby are being contested in good faith by
appropriate proceedings;
(k) Mortgages incidental to the conduct of the business of the Company
or its Subsidiaries or the ownership of the property of the Company and its
Subsidiaries (including warehousemen's liens, attorneys' liens, operator's
liens, brokers' liens, landlords' liens and liens granted in favor of
partnerships or joint ventures or the participants therein) which were not
incurred in connection with the borrowing of money (or as full or partial
payment for property) or the obtaining of advances or credit (other than trade
credit, including margin accounts with brokerage firms), and which do not
materially interfere with the conduct of the business of the Company and of its
Subsidiaries taken as a whole;
(l) Mortgages on property of any Subsidiary to secure obligations of
such Subsidiary to the Company or to another Subsidiary; provided, however, that
the obligations secured by such Mortgages may not be assigned, sold or otherwise
transferred to a Person other than the Company or a Subsidiary unless such
Mortgage would otherwise be permitted to be granted to such Person under another
exception in this Section;
(m) Mortgages on current assets of the Company or any Subsidiary created
to secure indebtedness and letter of credit reimbursement obligations incurred
in connection with the extension of working capital financing;
(n) Any Mortgage on any property of the Company or any Subsidiary
existing at the date of this Indenture (or property constituting substitutions
or replacements for, or accessions to, property which is encumbered pursuant to
after-acquired property provisions of the agreements in accordance with which
such Mortgages were granted);
(o) Mortgages (which may include customary after-acquired property
provisions relating to substitutions or replacements for, or accessions to, the
property encumbered thereby) incurred in connection with the borrowing of funds
if, within 120 days following the date of such borrowing, such funds are
utilized to repay indebtedness in the same (or greater) principal amount secured
by other Mortgages (other than Mortgages referred to in clause (m) above) on
property of the Company or any Subsidiary having a fair market value (as
determined by the chief financial officer of the Company) at least equal to the
fair market value of the property which secures the new Mortgage;
(p) Mortgages incurred within 90 days (or any longer period, not in
excess of one year, as permitted by law) after acquisition of the property
subject to such Mortgage arising
54
solely in connection with the transfer of tax benefits in accordance with any
Code provisions similar to former Section 168(f) (8) of the Code;
(q) Mortgages on cash, cash equivalents and other account holdings
securing derivative obligations; provided that the aggregate amount of assets
subject to such Mortgages shall at no time exceed $200,000,000;
(r) Any renewal, refunding or extension of maturity, in whole or in
part, of any Mortgage created or assumed in accordance with the provisions of
subdivision (a),(b),(c),(d),(l),(m),(n),(o) or (p) above; provided, however,
that the principal amount of the indebtedness secured by such renewal Mortgage,
refunding Mortgage or extended Mortgage shall not exceed the principal amount of
the indebtedness secured by the Mortgage to be renewed, refunded or extended
outstanding at the time of such renewal, refunding or extension; provided,
further, that in the case of any revolving credit or similar facility which
allows the Company or any Subsidiary to borrow any money thereunder immediately
prior to the time of such renewal, refunding or extension of maturity, the
principal amount of indebtedness secured by the renewal Mortgage, refunding
Mortgage or extended Mortgage shall not exceed the maximum stated amount which
could be borrowed under such facility immediately prior to such renewal,
refunding or extension (without regard to any borrowing base, collateral value,
debt to equity, debt service or other provisions then purporting to limit any
borrowings thereunder); and in any case the lien of such renewal Mortgage,
refunding Mortgage or extended Mortgage shall be limited to the same property
(or property constituting substitutions or replacements for, or accessions to,
property which is encumbered pursuant to after-acquired property provisions of
the agreements in accordance with which such Mortgages were granted) that
secured the Mortgage so renewed, refunded or extended; and
(s) Mortgages not otherwise permitted by any of the foregoing provisions
securing debt in an aggregate principal or face amount at any date not to exceed
10% of the Consolidated Net Tangible Assets of the Company and its Subsidiaries.
SECTION 1102. Limitations on Sale and Leaseback Transactions
The Company covenants and agrees that neither it nor any Subsidiary will
enter into any arrangement with any Person (other than the Company or a
Subsidiary), or to which any such Person is a party, providing for the leasing
to the Company or a Subsidiary for a period of more than three years of
Principal Property which has been or is to be sold or transferred by the Company
or such Subsidiary to such Person or to any other Person (other than the Company
or a Subsidiary), and with respect to which the funds have been or are to be
advanced by such Person on the security of the leased Principal Property (in
this Article Eleven called "Sale and Leaseback Transactions") unless either:
(i) the Company or such Subsidiary would be entitled, pursuant to
Section 1101, to incur indebtedness secured by a Mortgage on the Principal
Property to be leased, without equally and ratably securing the Securities, or
(ii) the Company during or immediately after the expiration of 120 days
after the effective date of such Sale and Leaseback Transaction (whether made by
the Company or a Subsidiary) applies an amount equal to the value of such Sale
and Leaseback Transaction (A) to
55
the purchase of other property that will constitute Principal Property or (B) to
the voluntary retirement of Funded Debt; provided, however, that the amount to
be applied to the retirement of Funded Debt shall be reduced by (A) the
principal amount of Securities delivered, within 120-days after the effective
date of such Sale and Leaseback Transaction, to the Trustee for retirement and
cancellation and (B) the principal amount of other Funded Debt voluntarily
retired by the Company within such 120-day period, excluding retirements of
Securities and other Funded Debt pursuant to mandatory sinking fund or
prepayment provisions or by payment at maturity.
For purposes of this Section 1102, the term "value" shall mean, with
respect to a Sale and Leaseback Transaction, as of any particular time, the
amount equal to the greater of (1) the net proceeds of the sale or transfer of
the property leased pursuant to such Sale and Leaseback Transaction or (2) the
fair value in the opinion of the chief financial officer, Vice President,
Finance or Treasurer of the Company of such property at the time of entering
into such Sale and Leaseback Transaction, in either case divided first by the
number of full years of the term of the lease and then multiplied by the number
of full years of such term remaining at the time of determination, without
regard to any renewal or extension options contained in the lease. For purposes
of this Section 1102, the term "Principal Property" shall mean any refinery or
refinery- related asset, distribution facility or other real property of the
Company or any of its Subsidiaries which has a net book value exceeding 2.5% of
Consolidated Net Tangible Assets, but not including (1) any property which in
the opinion of the Company is not material to the total business conducted by
the Company as an entirety or (2) any portion of a particular property which is
similarly found not to be material to the use or operation of such property.
Notwithstanding this Section 1102, the Company and any Subsidiary may
enter into Sale and Leaseback Transactions in an aggregate principal amount at
any date not to exceed, together with the aggregate outstanding principal or
face amount of all indebtedness of the Company and its subsidiaries secured by
Mortgages permitted as a result of clause (s) of Section 1101, 10% of the
Consolidated Net Tangible Assets of the Company and its subsidiaries.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of Article.
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and this Article.
SECTION 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Company Order. In case of any redemption at the election of the Company of
less than all of the Securities of any series with the same issue date, interest
rate and Stated Maturity, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series to be redeemed.
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SECTION 1203. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series with the same issue date,
interest rate and Stated Maturity are to be redeemed, the particular Securities
to be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of such series not
previously called for redemption, by such method as the Trustee shall deem
appropriate and which may provide for the selection for redemption of portions
of the principal amount of Registered Securities of such series; provided,
however, that no such partial redemption shall reduce the portion of the
principal amount of a Registered Security of such series not redeemed to less
than the minimum denomination for a Security of that series established pursuant
to Section 302.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal of such Securities which has been or is to be redeemed.
SECTION 1204. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
106, not less than 30 nor more than 60 days prior to the Redemption Date, unless
a shorter period is specified in the Securities to be redeemed, to the Holders
of Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall include the Cusip Number, if any, and
shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Securities to be redeemed,
(4) in case any Registered Security is to be redeemed in part
only, the notice which relates to such Security shall state that on and after
the Redemption Date, upon surrender of such Security, the Holder of such
Security will receive, without charge, a new Registered Security or Registered
Securities of authorized denominations for the principal amount thereof
remaining unredeemed,
57
(5) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed, and, if applicable, that
interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities, together in the
case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the
case.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1205. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on all the Securities
or portions thereof which are to be redeemed on that date.
SECTION 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only upon presentation and surrender of coupons for such interest (at an
office or agency located outside the United States except as otherwise provided
in Section 1002), and provided, further, that installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company
58
and the Trustee if there be furnished to them such security or indemnity as they
may require to save each of them and any Paying Agent harmless. If thereafter
the Holder of such Security shall surrender to the Trustee or any Paying Agent
any such missing coupon in respect of which a deduction shall have been made
from the Redemption Price, such Holder shall be entitled to receive the amount
so deducted; provided, however, that interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside of the United States except as otherwise provided in
Section 1002.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1207. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at any office or agency of the Company maintained for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Registered Security or Securities of the same series, containing identical
terms and provisions, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered. If a Security in global
form is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the U.S. Depository or other depository for such
Security in global form as shall be specified in the Company Order with respect
thereto to the Trustee, without service charge, a new Security in global form in
a denomination equal to and in exchange for the unredeemed portion of the
principal of the Security in global form so surrendered.
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise permitted or
required by any form of Security of such series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1302. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
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SECTION 1302. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series to be made pursuant to the
terms of such Securities as provided for by the terms of such series, (1)
deliver Outstanding Securities of such series (other than any of such Securities
previously called for redemption or any of such Securities in respect of which
cash shall have been released to the Company), together in the case of any
Bearer Securities of such series with all unmatured coupons appertaining
thereto, and (2) apply as a credit Securities of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, provided that such
series of Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Securities of any series in lieu of
cash payments pursuant to this Section 1302, the principal amount of Securities
of such series to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities of such series
for redemption, except upon Company Request, and such cash payment shall be held
by the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall at the
request of the Company from time to time pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon delivery by
the Company to the Trustee of Securities of that series purchased by the Company
having an unpaid principal amount equal to the cash payment requested to be
released to the Company.
SECTION 1303. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1302, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1203 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1204. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1206 and 1207.
60
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in accordance with
the terms of the Securities of such series. The repayment of any principal
amount of Securities pursuant to such option of the Holder to require repayment
of Securities before their Stated Maturity, for purposes of Section 309, shall
not operate as a payment, redemption or satisfaction of the indebtedness
represented by such Securities unless and until the Company, at its option,
shall deliver or surrender the same to the Trustee with a directive that such
Securities be cancelled. Notwithstanding anything to the contrary contained in
this Article Fourteen, in connection with any repayment of Securities, the
Company may arrange for the purchase of any Securities by an agreement with one
or more investment bankers or other purchasers to purchase such Securities by
paying to the Holders of such Securities on or before the close of business on
the repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a meeting
of Holders of Securities of such series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more than 180
days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of
61
the notice of such meeting within 21 days after receipt of such request or shall
not thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of a specified
percentage in aggregate principal amount of the Outstanding Securities of a
series that is less or greater than a majority in principal amount of the
Outstanding Securities of such series, then, with respect to such action (and
only such action) the Persons entitled to vote such lesser or greater percentage
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in
62
principal amount of the Outstanding Securities of that series; and provided,
further, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of such series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination or proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of
Securities of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be adjourned
from time to time by Persons
63
entitled to vote a majority in principal amount of the Outstanding Securities of
such series represented at the meeting; and the meeting may be held as so
adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 1601. Securities in Foreign Currencies.
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series, any amount in
respect of any Security denominated in a currency other than Dollars shall be
treated for any such action or distribution as that amount of Dollars that could
be obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such action, determination of rights or distribution (or, if there shall be no
applicable record date, such other date reasonably proximate to the date of such
action, determination of rights or distribution) as the Company may specify in a
written notice to the Trustee or, in the absence of such written notice, as the
Trustee may determine.
* * * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
64
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written:
VALERO ENERGY CORPORATION
By: /s/ Michael S. Ciskowski
-----------------------------------
Michael S. Ciskowski
Executive Vice President and
Chief Financial Officer
Attest:
/s/ Jay D. Browning
-------------------------------
Jay D. Browning
Vice President and
Corporate Secretary
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THE BANK OF NEW YORK,
as Trustee
By: /s/ Remo J. Reale
-----------------------------------
Name: Remo J. Reale
Title: Vice President
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65
EXHIBIT 4.8
FORM OF
SUBORDINATED INDENTURE, VEC AND BANK OF NEW YORK
VALERO ENERGY CORPORATION
AND
THE BANK OF NEW YORK, as Trustee
Indenture
Dated as of ___________________
Subordinated Debt Securities
VALERO ENERGY CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of ____________________
Trust Indenture Act Section Indenture Section
Sec. 310(a)(1)............................. 608
(a)(2)............................. 608
(a)(3)............................. Not Applicable
(a)(4)............................. Not Applicable
(a)(5)............................. 608
Sec. 311(a)................................ 609
(b)................................ 605
Sec. 312(a)................................ 605, 703
(b)................................ 701, 702
(c)................................ 702
Sec. 313(a)................................ 703(a)
(b)(1)............................. Not Applicable
(b)(2)............................. 703(b)
(c)................................ 703(c)
(d)................................ 703(c)
Sec. 314(a)(1)............................. 704
(a)(2)............................. 704
(a)(3)............................. 704
(a)(4)............................. 1005
(b)................................ Not Applicable
(c)(1)............................. 102
(c)(2)............................. 102
(c)(3)............................. Not Applicable
(d)................................ Not Applicable
(e)................................ 102
Sec. 315(a)................................ 601(a)
(b)................................ 602
(c)................................ 601(b)
(d)................................ 601(c)
(d)(1)............................. 601(a)(1), (c)(1)
(d)(2)............................. 601(c)(2)
(d)(3)............................. 601(c)(3)
(e)................................ 514
Sec. 316(a)(1)(A).......................... 502, 512
(a)(1)(B).......................... 513
(a)(2)............................. Not Applicable
(b)................................ 508
(c)................................ Not Applicable
Sec. 317(a)(1)............................. 503
(a)(2)............................. 504
(b)................................ 1003
Sec. 318(a)................................ 108
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
----
PARTIES....................................................................................... 1
RECITALS...................................................................................... 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION........................... 1
SECTION 101. Definitions...................................................................... 1
SECTION 102. Compliance Certificates and Opinions............................................. 9
SECTION 103. Form of Documents Delivered to Trustee........................................... 9
SECTION 104. Acts of Holders.................................................................. 10
SECTION 105. Notices etc. to Trustee and Company.............................................. 12
SECTION 106. Notice to Holders of Securities; Waiver.......................................... 12
SECTION 107. Language of Notices, etc......................................................... 13
SECTION 108. Conflict with Trust Indenture Act................................................ 13
SECTION 109. Effect of Headings and Table of Contents......................................... 13
SECTION 110. Successors and Assigns........................................................... 13
SECTION 111. Separability Clause.............................................................. 13
SECTION 112. Benefits of Indenture............................................................ 13
SECTION 113. Governing Law.................................................................... 14
SECTION 114. Legal Holidays................................................................... 14
SECTION 115. No Recourse Against Others....................................................... 14
ARTICLE TWO SECURITY FORMS.................................................................... 14
SECTION 201. Forms Generally.................................................................. 14
SECTION 202. Form of Trustee's Certificate of Authentication.................................. 15
ARTICLE THREE THE SECURITIES.................................................................. 15
SECTION 301. Amount Unlimited; Issuable in Series............................................. 15
SECTION 302. Denominations.................................................................... 18
SECTION 303. Execution, Authentication, Delivery and Dating................................... 18
SECTION 304. Temporary Securities............................................................. 19
SECTION 305. Registration, Transfer and Exchange.............................................. 20
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities................................. 23
SECTION 307. Payment of Interest; Interest Rights Preserved................................... 24
SECTION 308. Persons Deemed Owners............................................................ 25
SECTION 309. Cancellation..................................................................... 25
SECTION 310. Computation of Interest.......................................................... 26
SECTION 311. Cusip Numbers.................................................................... 26
ARTICLE FOUR SATISFACTION AND DISCHARGE....................................................... 26
SECTION 401. Satisfaction and Discharge of Indenture.......................................... 26
SECTION 402. Application of Trust Money....................................................... 27
ARTICLE FIVE REMEDIES......................................................................... 28
SECTION 501. Events of Default................................................................ 28
SECTION 502. Acceleration of Maturity; Rescission and Annulment............................... 29
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i
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.................. 30
SECTION 504. Trustee May File Proofs of Claim................................................. 30
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons........... 31
SECTION 506. Application of Money Collected................................................... 31
SECTION 507. Limitation on Suits.............................................................. 31
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest........ 32
SECTION 509. Restoration of Rights and Remedies............................................... 32
SECTION 510. Rights and Remedies Cumulative................................................... 33
SECTION 511. Delay or Omission Not Waiver..................................................... 33
SECTION 512. Control by Holders of Securities................................................. 33
SECTION 513. Waiver of Past Defaults.......................................................... 33
SECTION 514. Undertaking for Costs............................................................ 34
SECTION 515. Waiver of Stay, Extension or Usury Laws.......................................... 34
ARTICLE SIX THE TRUSTEE....................................................................... 34
SECTION 601. Certain Duties and Responsibilities.............................................. 34
SECTION 602. Notice of Defaults............................................................... 35
SECTION 603. Certain Rights of Trustee........................................................ 36
SECTION 604. Not Responsible for Recitals or Issuance of Securities........................... 37
SECTION 605. May Hold Securities.............................................................. 37
SECTION 606. Money Held in Trust.............................................................. 37
SECTION 607. Compensation and Reimbursement................................................... 38
SECTION 608. Corporate Trustee Required; Eligibility.......................................... 38
SECTION 609. Resignation and Removal; Appointment of Successor................................ 38
SECTION 610. Acceptance of Appointment by Successor........................................... 40
SECTION 611. Merger, Conversion, Consolidation or Succession to Business...................... 41
SECTION 612. Appointment of Authenticating Agent.............................................. 41
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............................... 43
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders........................ 43
SECTION 702. Preservation of Information; Communications to Holders........................... 43
SECTION 703. Reports by Trustee............................................................... 44
SECTION 704. Reports by Company............................................................... 44
ARTICLE EIGHT CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE................................ 45
SECTION 801. Consolidations and Mergers of Company and Sales, Leases and Conveyances
Permitted Subject to Certain Conditions.......................................... 45
SECTION 802. Rights and Duties of Successor Corporation....................................... 45
SECTION 803. Officers' Certificate and Opinion of Counsel..................................... 46
ARTICLE NINE SUPPLEMENTAL INDENTURES.......................................................... 46
SECTION 901. Supplemental Indentures without Consent of Holders............................... 46
SECTION 902. Supplemental Indentures with Consent of Holders.................................. 47
SECTION 903. Execution of Supplemental Indentures............................................. 48
SECTION 904. Effect of Supplemental Indentures................................................ 48
SECTION 905. Conformity with Trust Indenture Act.............................................. 48
SECTION 906. Reference in Securities to Supplemental Indentures............................... 48
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ii
ARTICLE TEN COVENANTS......................................................................... 49
SECTION 1001. Payment of Principal, Premium, if any, and Interest............................. 49
SECTION 1002. Maintenance of Office or Agency................................................. 49
SECTION 1003. Money for Securities Payments to be Held in Trust............................... 50
SECTION 1004. Additional Amounts.............................................................. 51
SECTION 1005. Statement as to Compliance...................................................... 52
SECTION 1006. Waiver of Certain Covenants..................................................... 52
SECTION 1007. Statement by Officers as to Default............................................. 52
ARTICLE ELEVEN SUBORDINATION.................................................................. 53
SECTION 1101. Securities Subordinated to Senior Indebtedness.................................. 53
SECTION 1102. No Payment on Securities in Certain Circumstances............................... 53
SECTION 1103. Securities Subordinated to Prior Payment of All Senior Indebtedness on
Dissolution, Liquidation or Reorganization...................................... 54
SECTION 1104. Subrogation to Rights of Holders of Senior Indebtedness......................... 55
SECTION 1105. Obligations of the Company Unconditional........................................ 56
SECTION 1106. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice......... 56
SECTION 1107. Application by Trustee of Amounts Deposited with It............................. 56
SECTION 1108. Subordination Rights Not Impaired by Acts or Omissions of the Company or
Holders of Senior Indebtedness.................................................. 57
SECTION 1109. Trustee to Effectuate Subordination of Securities............................... 57
SECTION 1110. Right of Trustee to Hold Senior Indebtedness.................................... 57
SECTION 1111. Article Eleven Not to Prevent Events of Default................................. 58
SECTION 1112. No Fiduciary Duty of Trustee to Holders of Senior Indebtedness.................. 58
SECTION 1113. Article Applicable to Paying Agent.............................................. 58
ARTICLE TWELVE REDEMPTION OF SECURITIES....................................................... 58
SECTION 1201. Applicability of Article........................................................ 58
SECTION 1202. Election to Redeem; Notice to Trustee........................................... 58
SECTION 1203. Selection by Trustee of Securities to be Redeemed............................... 59
SECTION 1204. Notice of Redemption............................................................ 59
SECTION 1205. Deposit of Redemption Price..................................................... 60
SECTION 1206. Securities Payable on Redemption Date........................................... 60
SECTION 1207. Securities Redeemed in Part..................................................... 61
ARTICLE THIRTEEN SINKING FUNDS................................................................ 61
SECTION 1301. Applicability of Article........................................................ 61
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities........................... 62
SECTION 1303. Redemption of Securities for Sinking Fund....................................... 62
ARTICLE FOURTEEN REPAYMENT AT THE OPTION OF HOLDERS........................................... 63
SECTION 1401. Applicability of Article........................................................ 63
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES............................................. 63
SECTION 1501. Purposes for Which Meetings May Be Called....................................... 63
SECTION 1502. Call, Notice and Place of Meetings.............................................. 63
SECTION 1503. Persons Entitled to Vote at Meetings............................................ 64
SECTION 1504. Quorum; Action.................................................................. 64
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iii
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings............. 65
SECTION 1506. Counting Votes and Recording Action of Meetings................................. 66
ARTICLE SIXTEEN MISCELLANEOUS PROVISIONS...................................................... 66
SECTION 1601. Securities in Foreign Currencies................................................ 66
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iv
INDENTURE, dated as of ________________________, _____ between VALERO
ENERGY CORPORATION, a Delaware corporation (hereinafter called the "Company"),
having its principal office at 7990 West IH 10, San Antonio, Texas 78230-4715,
and THE BANK OF NEW YORK, a New York banking corporation, as Trustee
(hereinafter called the "Trustee") having its Corporate Trust Office at 101
Barclay Street, Floor 21 West, New York, New York 10286.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures, notes
or other evidences of indebtedness (hereinafter called the "Securities"),
unlimited as to principal amount, to bear such rates of interest, to mature at
such time or times, to be issued in one or more series and to have such other
provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture and all things necessary to make this Indenture a valid and legally
binding agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the sum of one dollar
duly paid by the Company to the Trustee, the receipt of which is hereby
acknowledged, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof, as follows
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
1
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act" when used with respect to any Holder has the meaning specified in
Section 104.
"Additional Amounts" means any additional amounts which are required by a
Security or pursuant to a Board Resolution, under circumstances specified
therein, to be paid by the Company in respect of certain matters, including,
without limitation, taxes imposed on certain Holders, and which are owing to
such Holders.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 612 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in an official language of the
country of publication or in the English language, customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means either the Board of Directors of the Company or
any committee thereof duly authorized, with respect to any particular matter, to
act by or on behalf of the Board of Directors of the Company.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a day on which banking
institutions in The City of New York or in the City of San Antonio, Texas are
authorized or required by law to close, except as may otherwise be provided in
the form of Securities of any particular series pursuant to the provisions of
this Indenture.
"Capital Stock" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness), warrants, options, participations or other equivalents of or
interests (however designated) in stock issued by that corporation.
2
"Capitalized Lease Obligation" of any Person means any obligation of such
Person to pay rent or other amounts under a lease of property, real or personal,
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chief Executive
Officer, the President, a Vice President or by the Treasurer, and by an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be administered, which office
is located at 101 Barclay Street, Floor 21 West, New York, New York 10286.
"corporation" includes corporations, associations, companies, limited
liability companies and business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Defaulted Interest" has the meaning specified in Section 307.
"Designated Senior Indebtedness," unless otherwise provided with respect
to the Securities of a series as contemplated by Section 301, means any Senior
Indebtedness that (i) in the instrument evidencing the same or the assumption or
guarantee thereof (or related documents to which the Company is a party) is
expressly designated as "Designated Senior Indebtedness" for purposes of this
Indenture and (ii) satisfies such other conditions as may be provided with
respect to the Securities of such series; provided that such instruments or
documents may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness.
"Disqualified Capital Stock" means, when used with respect to the
Securities of any series, (a) except as set forth in (b), with respect to any
Person, Capital Stock of such Person that, by its terms or by the terms of any
security into which it is convertible, exercisable or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased (including at the option of the holder thereof) by such
Person or any Subsidiary of such Person, in whole or in part, on or prior to the
last Stated Maturity of the Securities of such series, and (b) with respect to
any Subsidiary of such Person (including with respect to any Subsidiary of the
Company), any Capital Stock other than any common stock with no preference,
privileges, or redemption or repayment provisions.
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"Dollars" or "$" or any similar reference shall mean the currency of the
United States, except as may otherwise be provided in the form of Securities of
any particular series pursuant to the provisions of this Indenture.
"Event of Default" has the meaning specified in Section 501.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.
"Holder", when used with respect to any Security, means in the case of a
Registered Security, the Person in whose name the Security is registered in the
Security Register and in the case of a Bearer Security, the bearer thereof and,
when used with respect to any coupon, means the bearer thereof.
"Indebtedness" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a portion
thereof), (ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such Person in
respect of letters of credit or other similar instruments (or reimbursement
obligations with respect thereto), other than standby letters of credit,
performance bonds and other obligations issued by or for the account of such
Person in the ordinary course of business, to the extent not drawn or, to the
extent drawn, if such drawing is reimbursed not later than the third Business
Day following demand for reimbursement, (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services, except trade
payables and accrued expenses incurred in the ordinary course of business, (v)
all Capitalized Lease Obligations of such Person, (vi) all Indebtedness of
others secured by a lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person (provided that if the obligations so
secured have not been assumed in full by such Person or are not otherwise such
Person's legal liability in full, then such obligations shall be deemed to be in
an amount equal to the greater of (a) the lesser of (1) the full amount of such
obligations and (2) the fair market value of such assets, as determined in good
faith by the Board of Directors of such Person, which determination shall be
evidenced by a Board Resolution, and (b) the amount of obligations as have been
assumed by such Person or which are otherwise such Person's legal liability),
and (vii) all Indebtedness of others (other than endorsements in the ordinary
course of business) guaranteed by such Person to the extent of such guarantee.
"Indenture" means this instrument as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, and shall include each
Officers' Certificate delivered to the Trustee pursuant to Section 303.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity, and, when used
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with respect to a Security which provides for the payment of Additional Amounts
pursuant to Section 1004, includes such Additional Amounts.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the applicable Securities.
"Junior security" of a Person means, when used with respect to the
Securities of any series, any Qualified Capital Stock of such Person or any
Indebtedness of such Person that is subordinated in right of payment to the
Securities of such series and has no scheduled installment of principal due, by
redemption, sinking fund payment or otherwise, on or prior to the last Stated
Maturity of the Securities of such series.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, request for redemption or
otherwise.
"Officers' Certificate" means a certificate signed by the Chief Executive
Officer, the President, a Vice President or the Treasurer, and by an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, and delivered
to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may (except
as otherwise expressly provided in this Indenture) be an employee of or counsel
for the Company.
"Original Issue Discount Security" means a Security issued pursuant to
this Indenture which provides for declaration of an amount less than the
principal thereof to be due and payable upon acceleration pursuant to Section
502.
"Outstanding" when used with respect to Securities means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities and any coupons thereto appertaining, provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company;
5
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, the principal amount of
an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that could be declared to be due
and payable pursuant to the terms of such Original Issue Discount Security at
the time the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in Section 104(a), and, provided
further, that Securities owned beneficially by the Company or any other obligor
upon the Securities or any Affiliate of the Company or such other obligor, other
than Securities purchased in connection with the distribution or trading
thereof, shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint-stock
company, trust, unincorporated organization or government or any agency,
instrumentality or political subdivision thereof or other entity of any kind.
"Payment Default" has the meaning specified in Section 501.
"Payment Notice" has the meaning specified in Section 1102.
"Place of Payment" when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified as provided
pursuant to Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
lost, destroyed, mutilated or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the lost, destroyed, mutilated or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen coupon appertains.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Redemption Date" when used with respect to any Security to be redeemed
means the date fixed for such redemption by or pursuant to this Indenture.
6
"Redemption Price" when used with respect to any Security to be redeemed
means the price at which it is to be redeemed as determined pursuant to the
provisions of this Indenture.
"Registered Security" means any Security established pursuant to Section
201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on a Registered Security on
any Interest Payment Date means the date, if any, specified in such Security as
the "Regular Record Date".
"Responsible Officer" when used with respect to the Trustee means any vice
president (whether or not designated by a number or a word or words added before
or after the title "vice president"), the treasurer, any assistant treasurer,
any trust officer or assistant trust officer, or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject and who
shall have direct responsibility for the administration of this Indenture.
"Security" or "Securities" means any Security or Securities, as the case
may be, authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" of the Company, unless otherwise provided with
respect to the Securities of a series as contemplated by Section 301, means (i)
all Indebtedness of the Company, whether currently outstanding or hereafter
issued, unless, by the terms of the instrument creating or evidencing such
Indebtedness, it is provided that such Indebtedness is not superior in right of
payment to the Securities or to other Indebtedness which is pari passu with or
subordinated to the Securities, and (ii) any modifications, refunding,
deferrals, renewals or extensions of any such Indebtedness or securities, notes
or other evidences of Indebtedness issued in exchange for such Indebtedness;
provided that in no event shall "Senior Indebtedness" include (a) Indebtedness
of the Company owed or owing to any Subsidiary of the Company or any officer,
director or employee of the Company or any Subsidiary of the Company, (b)
Indebtedness to trade creditors or (c) any liability for taxes owed or owing by
the Company.
"Senior Payment Default" has the meaning specified in Section 1102.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified in
such Security or a coupon representing such installment of interest as the fixed
date on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means (i) any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the shares of Voting Stock, (ii) any
general partnership, joint venture, or similar entity, of
7
which at the time of determination the Company and/or one or more Subsidiaries
owns or controls directly or indirectly more than 50% or the outstanding
partnership or similar interests and (iii) any limited partnership of which the
Company or any of its Subsidiaries is a general partner and which is
consolidated with the Company for financial reporting purposes pursuant to GAAP.
"Wholly-owned", when used with reference to a Subsidiary, means a Subsidiary of
which all of the outstanding capital stock (except for qualifying shares) or
partnership or similar interests, as applicable, is owned by the Company or by
one or more wholly-owned Subsidiaries.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such with respect
to one or more series of Securities pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to the Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"United States" means the United States of America (including the States
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to the Securities of
any series issuable or issued in whole or in part in the form of one or more
global Securities, the Person designated as U.S. Depository by the Company
pursuant to Section 301, which must be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and, if so provided pursuant to
Section 301 with respect to the Securities of any series, any successor to such
Person. If at any time there is more than one such Person, "U.S. Depository"
shall mean, with respect to any series of Securities, the qualifying entity
which has been appointed with respect to the Securities of that series.
"Vice President" when used with respect to the Company shall mean any Vice
President of the Company whether or not designated by a number or a word or
words added before or after the title "Vice President".
"Voting Stock" means stock of the class or classes having general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such corporation provided that, for the
purposes hereof, stock, which carries only the right to vote conditionally on
the happening of an event shall not be considered voting stock whether or not
such event shall have happened.
8
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or covenant has
been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
9
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments and so voting
at any such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.
Without limiting the generality of this Section 104, unless
otherwise established in or pursuant to a Board Resolution or set forth or
determined in an Officers' Certificate, or established in one or more indentures
supplemental hereto, pursuant to Section 301, a Holder, including a U.S.
Depository that is a Holder of a global Security, may make, give or take, by a
proxy, or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided in
this Indenture to be made, given or taken by Holders, and a U.S. Depository that
is a Holder of a global Security may provide its proxy or proxies to the
beneficial owners of interests in any such global Security through such U.S.
Depository's standing instructions and customary practices.
The Company shall fix a record date for the purpose of determining
the Persons who are beneficial owners of interest in any permanent global
Security held by a U.S. Depository entitled under the procedures of such U.S.
Depository to make, give or take, by a proxy or proxies duly appointed in
writing, any request, demand, authorization, direction, notice, consent, waiver
or other action provided in this Indenture to be made, given or taken by
Holders. If such a record date is fixed, the Holders on such record date or
their duly appointed proxy or proxies, and only such Persons shall be entitled
to make, give or take such request, demand, authorization, direction, notice,
consent, waiver or other action, whether or not such Holders remain Holders
after such record date. No such request, demand, authorization, direction,
notice, consent, waiver or other action shall be valid or effective if made,
given or taken more than 90 days after such record date.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(c) The ownership of Registered Securities and the principal amount
and serial numbers of Registered Securities held by any Person, and the date of
holding the same, shall be proved by the Security Register.
(d) The principal amount and serial numbers of Bearer Securities
held by any Person, and the date of holding the same, may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary reasonably
acceptable to the Company, wherever situated, if such certificate shall be
deemed by the Trustee to be satisfactory, showing that at the date therein
mentioned such Person had on deposit with such depositary, or exhibited to it,
the Bearer Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, or (2) such Bearer Security
is produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The principal amount and serial numbers of Bearer
Securities held by the Person so executing such instrument or writing and the
date of holding the same may also be proved in any other manner which the
Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by Board Resolution, fix in
advance a record date for the determination of Holders of Registered Securities
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of Registered Securities of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders of
Registered Securities on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
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SECTION 105. Notices etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, postage prepaid, via certified mail, return receipt
requested, to the Company addressed to the attention of its Treasurer at the
address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein or in the form of Securities
of any particular series pursuant to the provisions of this Indenture, where
this Indenture provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each Holder
of a Registered Security affected by such event, at his address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such Notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of New
York and, if the Securities of such series are then listed on any stock exchange
outside the United States, in an Authorized Newspaper in such city as the
Company shall advise the Trustee that such stock exchange so requires, on a
Business Day at least twice, the first such publication to be not earlier than
the earliest date and not later than the latest date prescribed for the giving
of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither failure to give notice by
publication
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to Holders of Bearer Securities as provided above, nor any defect in any notice
so published, shall affect the sufficiency of any notice mailed to Holders of
Registered Securities as provided above.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be equivalent of such notice. Waivers
of notice by Holders of Securities shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Language of Notices, etc.
Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provisions shall
control.
SECTION 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the parties hereto shall
bind the successors and assigns of such parties, whether so expressed or not.
SECTION 111. Separability Clause.
In case any provision in this Indenture or in the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, any holders of
Senior Indebtedness, any Security Registrar, any Paying Agent and their
successors hereunder and the Holders of Securities or coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
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SECTION 113. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
controlled in accordance with the laws of the State of New York without regard
to the conflicts of laws provisions thereof.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or the Securities or
coupons other than a provision in the Securities which specifically states that
such provision shall apply in lieu of this Section) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day, except that if
such next succeeding Business Day is in the next succeeding calendar year, then
on the immediately preceding Business Day, at such Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, and no interest shall accrue on the amount so
payable for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be.
SECTION 115. No Recourse Against Others.
A director, officer, employee, stockholder, partner or other owner of the
Company or the Trustee, as such, shall not have any liability for any
obligations of the Company under the Securities or for any obligations of the
Company or the Trustee under this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release shall be part of the consideration for the issue of Securities.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series, related coupons, if any, and temporary
global Securities, if any, shall be in the form established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, shall have
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto and
may have such letters, numbers or other marks of identification and such legends
or endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
Unless otherwise provided as contemplated by Section 301 with respect to
any series of Securities, the Securities of each series shall be issuable in
registered form without coupons. If so provided as contemplated by Section 301,
the Securities of a series also shall be issuable in bearer form, with or
without interest coupons attached.
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The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as conclusively evidenced
by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated:__________________ By:_____________________________
Authorized Signatory
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ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto:
(1) the title of the Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the
Securities of such title or the Securities of such series which may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Section 304, 305,
306, 906 or 1207);
(3) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both; any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa; and whether any Securities
of the series are to be issuable initially in global form and, if so, (i)
whether beneficial owners of interests in any such global Security may exchange
such interests for Securities of such series and of like tenor of any authorized
form and denomination and the circumstances under which any such exchanges may
occur, if other than in the manner specified in Section 305 and (ii) the name of
the depository or the U.S. Depository, as the case may be, with respect to any
global Security;
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(4) the date as of which any Bearer Securities of the series and
any temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary Bearer
Security in global form (representing all of the Outstanding Bearer Securities
of the series) payable in respect of an Interest Payment Date prior to the
exchange of such temporary Bearer Security for definitive Securities of the
series shall be paid to any clearing organization with respect to the portion of
such temporary Bearer Security held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be credited to
the Persons entitled to interest payable on such Interest Payment Date;
(6) the date or dates on which the principal of such Securities is
payable;
(7) the rate or rates at which such Securities shall bear
interest, if any, or any method by which such rate or rates shall be determined,
the date or dates from which such interest shall accrue, the Interest Payment
Dates on which such interest shall be payable and the Regular Record Date for
the interest payable on Registered Securities on any Interest Payment Date,
whether and under what circumstances Additional Amounts on such securities shall
be payable in respect of specified taxes, assessments or other governmental
charges withheld or deducted and, if so, whether the Company has the option to
redeem the affected Securities rather than pay such Additional Amounts, and the
basis upon which interest shall be calculated if other than that of a 360 day
year of twelve 30-day months;
(8) the place or places, if any, in addition to or other than the
Borough of Manhattan, The City of New York, where the principal of (and premium,
if any) and interest on such Securities shall be payable;
(9) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Securities may be redeemed,
in whole or in part, at the option of the Company;
(10) the obligation, if any, of the Company to redeem or purchase
such Securities pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the price or
prices at which and the terms and conditions upon which such Securities shall be
redeemed or purchased, in whole or in part, pursuant to such obligation, and any
provisions for the remarketing of such Securities;
(11) the denominations in which Registered Securities of the
series, if any, shall be issuable if other than denominations of $1,000 and any
integral multiple thereof, and the denominations in which Bearer Securities of
the series, if any, shall be issuable if other than the denomination of $5,000;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Securities which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502;
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(13) if other than the currency of the United States, the coin or
currency, including composite currencies, in which payment of the principal of
(and premium, if any) and interest, if any, on, such Securities shall be
payable;
(14) if the principal of (and premium, if any) or interest, if any,
on such Securities are to be payable, at the election of the Company or a Holder
thereof, in a coin or currency, including composite currencies, other than that
in which the Securities are stated to be payable, the period or periods within
which, and the terms and conditions upon which, such election may be made;
(15) if the amount of payments of principal of (and premium, if
any) or interest, if any, on such Securities may be determined with reference to
an index, formula or other method or based on a coin or currency other than that
in which the Securities are stated to be payable, the manner in which such
amounts shall be determined;
(16) the right, if any, of the Company to defer payments of
interest by extending the interest payment periods and specify the duration of
such extension, the Interest Payment Dates on which such interest shall be
payable and whether and under what circumstances additional interest on amounts
deferred shall be payable;
(17) the limitation, if any, on the Company's right to pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or comparable equity interest;
(18) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and terms of such
certificates, documents or conditions; and
(19) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, and Stated Maturity, the
date from which interest, if any, shall accrue and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time, and unless otherwise provided, a
series may be reopened for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven.
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SECTION 302. Denominations.
Unless other denominations and amounts may from time to time be fixed by
or pursuant to a Board Resolution, the Registered Securities of each series, if
any, shall be issuable in registered form without coupons in denominations of
$1,000 and any integral multiple thereof and the Bearer Securities of each
series, if any, shall be issuable in the denomination of $5,000, or in such
other denominations and amounts as may from time to time be fixed by or pursuant
to a Board Resolution.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chief
Executive Officer, President, Vice President serving as Chief Financial Officer
or its Treasurer and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile. Coupons shall bear the facsimile signature of the Treasurer
or any Assistant Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with the Board Resolution and Officers' Certificate or
supplemental indenture with respect to such Securities referred to in Section
301 and a Company Order for the authentication and delivery of such Securities,
and the Trustee in accordance with the Company Order and subject to the
provisions hereof shall authenticate and make available for delivery such
Securities. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) the form and terms of such Securities and coupons, if any,
have been established in conformity with the provisions of this Indenture;
(b) that all conditions precedent to the authentication and
delivery of such Securities, together with the coupons, if any, appertaining
thereto, have been complied with and that such Securities and coupons, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles,
(c) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities and coupons, if any, have been
complied with; and
(d) as to such other matters as the Trustee may reasonably
request.
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The Trustee shall not be required to authenticate such Securities if the
issue of such Securities pursuant to this Indenture will affect the Trustee's
own rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee or if
the Trustee being advised by counsel determines that such action may not
lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any temporary Bearer Security in global form shall be
dated as of the date specified as contemplated by Section 301.
No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose, unless
there appears on such Security a certificate of authentication substantially in
the form provided for in Section 202 or 612 executed by or on behalf of the
Trustee by the manual signature of one of its authorized signers, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Except as permitted by Section 306 or 307, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and cancelled.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute and deliver to the Trustee, and upon Company Order the
Trustee shall authenticate and make available for delivery in the manner
provided in Section 303, temporary Securities of such series which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued, in registered form, or, if authorized, in bearer form
with one or more coupons or without coupons, and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities. In the case of Bearer Securities of any series, such temporary
Securities may be in global form, representing all of the Outstanding Bearer
Securities of such series.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities of
any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series containing identical terms
and provisions upon surrender of the temporary Securities of such series at an
office or agency of the Company maintained for such purpose pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto) the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations of the
same series containing identical terms and provisions; provided, however, that
no definitive Bearer Security, except as provided pursuant to Section 301, shall
be delivered in exchange for a temporary Registered Security; and provided,
further, that a definitive Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set forth
therein. Unless otherwise
19
specified as contemplated by Section 301 with respect to a temporary global
Security, until so exchanged the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities of such series.
SECTION 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept at an office or agency of the Company maintained
pursuant to Section 1002, a register (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of each series and of transfers of the Registered Securities of each
series. Such office or agency shall be the "Security Registrar" for the
Registered Securities, if any, of each series of Securities. In the event that
the Trustee shall not be the Security Registrar, it shall have the right to
examine the Security Register at all reasonable times.
Upon surrender for registration of transfer of any Registered Security of
any series at any office or agency of the Company maintained for that series
pursuant to Section 1002, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series, of any authorized denominations, of a like aggregate principal amount
bearing a number not contemporaneously outstanding and containing identical
terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any such office or agency. Whenever any Registered Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
make available for delivery, the Registered Securities which the holder making
the exchange is entitled to receive.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series containing identical
terms and provisions, of any authorized denominations and aggregate principal
amount, upon surrender of the Bearer Securities to be exchanged at any such
office or agency, with all unmatured coupons and all matured coupons in default
thereto appertaining. If the Holder of a Bearer Security is unable to produce
any such unmatured coupon or coupons or matured coupon or coupons in default,
such exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company and the Trustee in an amount equal to
the face amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; provided, however, that, except as otherwise
provided in Section 1002, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series and like tenor after the close of
business at such office or
20
agency on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and before the opening of business at such office or agency on the
related date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date of payment, as the case may be (or, if such coupon is so
surrendered with such Bearer Security, such coupon shall be returned to the
person so surrendering the Bearer Security), and interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this
Indenture.
If expressly provided with respect to the Securities of any series, at the
option of the Holder, Registered Securities of such series may be exchanged for
Bearer Securities upon such terms and conditions as may be provided with respect
to such series.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any global Security shall be exchangeable only if
(i) the Securities Depository notifies the Company that it is unwilling or
unable to continue as Securities Depository and a successor depository is not
appointed by the Company within 60 days, (ii) the Company executes and delivers
to the Trustee a Company Order to the effect that such global Security shall be
so exchangeable, or (iii) an Event of Default has occurred and is continuing
with respect to the Securities and the Security Registrar has received a request
from the Securities Depository to issue Securities in lieu of all or a portion
of the global Security. If the beneficial owners of interests in a global
Security are entitled to exchange such interests for Securities of such series
and of like tenor and principal amount of any authorized form and denomination,
as specified as contemplated by Section 301, then without unnecessary delay but
in any event not later than the earliest date on which such interests may be so
exchanged, the Company shall deliver to the Trustee definitive Securities of
that series in aggregate principal amount equal to the principal amount of such
global Security, executed by the Company. On or after the earliest date on which
such interests may be so exchanged, such global Securities shall be surrendered
from time to time by the U.S. Depository or such other depository as shall be
specified in the Company Order with respect thereto, and in accordance with
instructions given to the Trustee and the U.S. Depository or such depository, as
the case may be (which instructions shall be in writing but need not comply with
Section 102 or be accompanied by an Opinion of Counsel), as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose, to be exchanged, in whole or in part, for definitive
Securities of the same series without charge. The Trustee shall authenticate and
make available for delivery, in exchange for each portion of such surrendered
global Security, a like aggregate principal amount of definitive Securities of
the same series of authorized denominations and of like tenor as the portion of
such global Security to be exchanged which (unless the Securities of the series
are not issuable both as Bearer Securities and as Registered Securities, in
which case the definitive Securities exchanged for the global Security shall be
issuable only in the form in which the Securities are issuable, as specified as
contemplated by Section 301) shall be in the form of Bearer Securities or
Registered
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Securities, or any combination thereof, as shall be specified by the beneficial
owner thereof; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities of that series to be redeemed and ending on the relevant Redemption
Date; and provided, further, that (unless otherwise specified as contemplated by
Section 301) no Bearer Security delivered in exchange for a portion of a global
Security shall be mailed or otherwise delivered to any location in the United
States. Promptly following any such exchange in part, such global Security shall
be returned by the Trustee to such depository or the U.S. Depository, as the
case may be, or such other depository or U.S. Depository referred to above in
accordance with the instructions of the Company referred to above. If a
Registered Security is issued in exchange for any portion of a global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of interest or Defaulted Interest, as the case may be,
interest will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered Security, but will be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, only to the Person to whom interest in respect of such portion of such
global Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer, or for exchange or redemption shall (if so required by the Company or
the Security Registrar for such series of Security presented) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and such Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1206 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange any Securities of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1203 and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not to be redeemed, or (iii) to exchange
any Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series, provided
that such Registered Security shall be immediately surrendered for redemption
with written instruction for payment consistent with the provisions of this
Indenture.
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SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a new Security of the same series containing identical terms and of
like principal amount and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to the
surrendered Securities.
If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or coupon,
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or coupon; provided,
however, that payment of principal of (and premium, if any) and any interest on
Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and its counsel) connected therewith.
Every new Security of any series, with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
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SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall, if so provided in
such Security, be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series after the close
of business (at an office or agency in a Place of Payment for such series) on
any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such Interest Payment Date and
interest will not be payable on such Interest Payment Date in respect of the
Registered Security issued in exchange for such Bearer Security, but will be
payable only to the Holder of such coupon when due in accordance with the
provisions of this Indenture.
Any interest on any Registered Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
for such Registered Security (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities affected (or
their respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each such
Registered Security and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of such Registered
Securities at his address as it appears in the Security Register not less than
10 days prior to such Special Record Date. The Trustee may in the name and at
the expense of the Company, cause a similar notice to be published at least once
in a newspaper, customarily published in the English language on each Business
Day and of general circulation in the Borough of Manhattan, The City of New
York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Registered Securities (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following Clause (2). In case a Bearer
Security of any series is
24
surrendered at the office or agency in a Place of Payment for such series in
exchange for a Registered Security of such series after the close of business at
such office or agency on any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such proposed date of payment and Defaulted Interest will not be
payable on such proposed date of payment in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such payment shall be deemed
practicable by the Trustee.
At the option of the Company, interest on Registered Securities of any
series that bear interest may be paid by mailing a check to the address of the
person entitled thereto as such address shall appear in the Security Register.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue interest, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any), and (subject to Sections 305 and 307)
interest on such Registered Security and for all other purposes whatsoever,
whether or not such Registered Security be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. Cancellation.
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation
25
any Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities and coupons held by the Trustee shall be disposed of by the Trustee
in its customary manner.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, or as set forth in any supplemental indenture,
interest on the Securities of each series shall be computed on the basis of a
360 day year of twelve 30-day months or, for any period shorter than a full
three months, on the basis of the actual number of days elapsed in such period.
SECTION 311. Cusip Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
Upon the direction of the Company by a Company Order this Indenture shall
cease to be of further effect (except as to any surviving rights of registration
of transfer or exchange of Securities herein expressly provided for and any
right to receive Additional Amounts, as provided in Section 1004), and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
and all coupons appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or has been waived
as provided in Section 305, (ii) Securities and coupons which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 306, (iii) coupons appertaining to Securities called for redemption and
maturing after the relevant Redemption Date, whose surrender has been waived as
provided in Section 1206, and (iv) Securities and coupons for whose payment
money has theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the
26
Company or discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities and, in the case of (i) or (ii)
below, any such coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company, are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company, and the Company, in the case of (i), (ii) or
(iii) above, has deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities and coupons not theretofore delivered to
the Trustee for cancellation, for principal (and premium, if any) and interest
to the date of such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of all series as to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instrument from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive such satisfaction and discharge.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities, the coupons
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and any interest for whose payment such money has been deposited with the
Trustee; but such
27
money need not be segregated from other funds except to the extent required by
law. Money and securities held in trust are not subject to Article Eleven.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of
that series when such interest becomes due and payable, and continuance of such
default for a period of 30 days; provided, however, that a valid extension of an
interest payment period by the Company in accordance with the terms of the
Securities of such series shall not constitute a default in the payment of
interest for this purpose; or
(2) default in the payment of the principal of (and premium, if
any, on) any Security of that series when it becomes due and payable at
Maturity; or
(3) default in the deposit of any sinking fund payment, when and
as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has been expressly included in this Indenture
solely for the benefit of series of Securities other than that series), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(6) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or similar official) of the Company or for any substantial part of its
property, or
28
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due or shall take any corporate action
in furtherance of any of the foregoing; or
(7) any other Event of Default provided with respect to Securities
of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal of all the
Securities of that series, or such lesser amount as may be provided for in the
Securities of that series, to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the Holders), and upon
any such declaration such principal or such lesser amount shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Event of Default giving rise to such declaration of
acceleration shall, without further act, be deemed to have been waived, and such
declaration and its consequences shall, without further act, be deemed to have
been rescinded and annulled, if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all Securities
of that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates borne by
or provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate or rates borne by or
provided for in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that series
which has become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
If an Event of Default specified in Section 502 (1) or Section 502 (2)
occurs and is continuing, the Company will, upon demand of the Trustee, pay to
it, for the benefit of the Holders of such Securities and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest, with interest upon the overdue principal (and
premium, if any) and, to the extent that payment of such interest shall be
legally enforceable, upon overdue installments of interest at the rate or rates
borne by or provided for in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of that series, of principal
(and premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents or
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
30
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder of
Securities and coupons to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities and coupons, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and any other amounts due the Trustee under
Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery or judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied, subject to Article Eleven, in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (and premium, if any) or interest, upon presentation of the
Securities or coupons, or both, as the case may be, and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and its agents
and counsel under Section 607;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the aggregate
amounts due and payable on such Securities and coupons for principal (and
premium, if any) and interest, respectively;
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
31
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or Holders of any other series, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on such Security or payment of such coupon on the
respective Stated Maturity or Maturities expressed in such Security or coupon
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
32
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities or coupons is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion of employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to the Holders of Securities or coupons may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of
other Holders of Securities of such series.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of (and premium, if any) or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
33
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit, other than the Trustee, of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, including the Trustee, having due regard to the merits and good faith
of the claims or defenses made by such party litigant, but the provisions of
this Section shall not apply to any suit instituted by the Company, the Trustee
or by any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities of any series, or to any suit
instituted by any Holder of any Security or coupon for the enforcement of the
payment of the principal of (and premium, if any) or interest on any Security or
the payment of any coupon on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date) or interest on any overdue principal of any Security.
SECTION 515. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties, and only
such duties, as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the Trustee
or any predecessor Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions (whether in their
original or facsimile form) furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
34
certificates or opinions which by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture (but need not confirm or investigate the accuracy of any facts or
mathematical calculations stated therein).
(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Securities of any series, relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to the
Securities of such series; and
(4) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 703(c), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived, provided, however, that, except in
the case of a default in the payment of the principal of (and premium, if any)
or interest on any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the Holders of
Securities
35
and coupons of such series; and provided, further, that in the case of any
default of the character specified in Section 501(4) with respect to Securities
of such series, no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, or other paper or document (whether in its original or
facsimile form) reasonably believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security to the Trustee for authentication and delivery pursuant
to Section 303 which shall be sufficiently evidenced as provided therein) and
any resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the
Issuer and shall incur no liability of any kind solely by reason of such inquiry
or investigation;
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(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) in no event shall the Trustee be responsible or liable for
special, indirect, or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit) irrespective of whether the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action;
(i) the Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder; and
(k) the Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and the Trustee or any Authenticating Agent assumes
no responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities or
coupons. The Trustee or any Authenticating Agent shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and, subject
to Sections 310(b) and 311 of the Trust Indenture Act, may otherwise deal with
the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
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SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as
the parties shall agree to in writing from time to time for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursements
or advance as shall be determined to have been caused by its own negligence, bad
faith or willful misconduct; and
(3) to indemnify each of the Trustee, any predecessor Trustee and
their respective agents for, and to hold them harmless against, any and all
loss, liability, claim, damage or expense (including taxes other than taxes
based on the income of the Trustee) incurred without negligence, bad faith or
willful misconduct on their part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Securities of any series
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of (or premium, if any) or
interest on Securities. The benefits of this Section shall survive termination
of this Indenture and resignation or removal of the Trustee.
SECTION 608. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that is a corporation (or
other person permitted to so act) by the Commission permitted by the Trust
Indenture Act to act as trustee under an indenture qualified under the Trust
Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section or Section 310(a)(5) of the Trust Indenture
Act, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 610.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series giving written notice thereof to the Company.
If the instrument of acceptance by a successor Trustee required by Section 610
shall not have been delivered to the Trustee within 30
38
days after the giving of such notice of resignation, the resigning Trustee may
at the expense of the Company petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 610 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the resigning Trustee may at the expense
of the Company petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to such series.
(d) If at any time:
(1) the Trustee shall fail to comply with the obligations
imposed upon it under Section 310(b) of the Trust Indenture Act with respect to
Securities of any series after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section 608
and shall fail to resign after written request therefor by the Company or by any
such Holder of a Security, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities or the Securities of such series, or (ii)
subject to Section 315(e) of the Trust Indenture Act, any Holder of a Security
who has been a bona fide Holder of a Security of any series for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect to
all Securities of such series and the appointment of a successor Trustee or
Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 610. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
610, become the successor Trustee with respect to the Securities of such series
and to that extent
39
supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders of Securities and accepted appointment
in the manner required by Section 610, any Holder of a Security who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any notice
given to, or
40
received by, or any act or failure to act on the part of any other Trustee
hereunder, and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein, such retiring Trustee shall with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates have no further responsibility for the exercise of rights and
powers or for the performance of the duties and obligations vested in the
Trustee under this Indenture other than as hereinafter expressly set forth, and
each such successor Trustee without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the Company or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee, to the extent contemplated by such
supplemental indenture, the property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 612. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
or exchange, registration of transfer or partial redemption thereof or pursuant
to Section 306, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall
41
at all times be a corporation organized and doing business under the laws of the
United States, any State thereof or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and to the extent
the Trustee makes such payments, the Trustee shall be entitled to be reimbursed
for such payments, subject to the provisions of Section 607.
The provisions of Sections 308, 604 and 605 shall be applicable to each
Authenticating Agent.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form.
42
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Dated:__________________ By:__________________________
As Authenticating Agent
By:__________________________
Authorized Signatory
|
If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not comply
with Section 102) by the Company, shall appoint in accordance with this Section
612 an Authenticating Agent having an office in a Place of Payment designated by
the Company with respect to such series of Securities.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than fifteen days after the Regular
Record Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished, provided, however, that, so long as the Trustee is the
Security Registrar, no such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
43
Every Holder of Securities or coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any information as to the names and addresses of the
Holders of Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the
first May 15 following the first issuance of Securities pursuant to Section 301,
if required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(b) The Trustee shall transmit the reports required by Section
313(b) of the Trust Indenture Act at the times specified therein.
(c) Reports pursuant to this Section shall be transmitted in the
manner and to the Persons required by Sections 313(c) and 313(d) of the Trust
Indenture Act. The Company will notify the Trustee when any series of Securities
are listed on any securities exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of said sections, then it shall file with the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations and shall file a copy thereof with the Trustee within 30
days after such supplementary and periodic information, documents and reports
would have been required to be filed with the Commission;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
44
(3) transmit within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Section 703(c) with respect
to reports pursuant to Section 703(a), such summaries of any information,
documents and reports required to be filed by the Company pursuant to paragraphs
(1) and (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
(4) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions.
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other corporation,
provided that in any such case, (i) either the Company shall be the continuing
corporation, or the successor corporation shall be a corporation organized and
existing under the laws of the United States or a State thereof and such
successor corporation shall expressly assume the due and punctual payment of the
principal of (and premium, if any) and any interest on all the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture satisfactory to the Trustee, executed and
delivered to a Responsible Officer of the Trustee by such corporation, and (ii)
the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 802. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, lease or conveyance and
upon any such assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part, and the
predecessor corporation, except in the event of a lease, shall be relieved of
any further obligation under this Indenture and the Securities and coupons. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities and
coupons issuable hereunder which theretofore shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities and coupons which previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Securities or coupons which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities and coupons so issued shall in all respects have the same legal
45
rank and benefit under this Indenture as the Securities and coupons theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities and coupons had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities and coupons thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel.
The Trustee, subject to the provisions of Sections 601 and 603, shall be
provided with an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and any
such assumption, complies with the provisions of this Article.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company,
when authorized by a Board Resolution, and the Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Securities contained; or
(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal (or premium, if any) on
Registered Securities or of principal (or premium, if any) or any interest on
Bearer Securities, to permit Registered Securities to be exchanged for Bearer
Securities or to permit the issuance of Securities in uncertificated form,
provided any such action shall not adversely affect the interests of the Holders
of Securities of any series or any related coupons in any material respect; or
(4) to establish the form of terms of Securities of any series as
permitted by Sections 201 and 301; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the
46
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 610 (b); or
(6) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of this
Indenture which shall not adversely affect the interest of the Holders of
Securities of any series or any related coupons in any material respect; or
(7) to add to, delete from or revise the conditions, limitations
and restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount thereof
or the rate of interest thereon or any Additional Amounts payable in respect
thereof, or any premium payable upon the redemption thereof, or change the
obligation of the Company to pay Additional Amounts pursuant to Section 1004
(except as contemplated by Section 801(i) and permitted by Section 901(1)), or
reduce the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or the interest thereon
is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or
(3) modify the provisions of this Indenture with respect to the
subordination of any Security in a manner adverse to the Holder thereof; or
(4) modify any of the provisions of this Section, or Section 513,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot
47
be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby.
An amendment under this Section may not make any change that adversely
affects the rights under Article Eleven of any holder of an issue of Senior
Indebtedness unless the holders of the issue pursuant to its terms consent to
the change.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be provided with, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
48
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series in accordance
with the terms of such series of Securities, any coupons appertaining thereto
and this Indenture. Any interest due on Bearer Securities on or before Maturity,
other than Additional Amounts, if any, payable as provided in Section 1004 in
respect of principal of (or premium, if any, on) such a Security, shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of that series may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served. If Securities of
a series are issuable as Bearer Securities, the Company will maintain, subject
to any laws or regulations applicable thereto, an office or agency in a Place of
Payment for such series which is located outside the United States where
Securities of such series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Securities of such series pursuant to Section 1004); provided, however, that if
the Securities of such series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent in London, Luxembourg
or any other required city located outside the United States, as the case may
be, so long as the Securities of such series are listed on such exchange. The
Company will give prompt written notice to a Responsible Officer of the Trustee
of the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Bearer Securities of
that series pursuant to Section 1004) at the place specified for the purpose
pursuant to Section 301, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained with a bank located
in the United States; provided, however, payment of principal of and any
49
premium and interest in Dollars on any Bearer Security may be made at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York if (but only if) payment of the full amount of such principal, premium
or interest at all offices outside the United States maintained for the purpose
by the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency. Unless otherwise set forth in a Board Resolution or indenture
supplemental hereto with respect to a series of Securities, the Company hereby
designates as the Place of Payment for each series of Securities the Borough of
Manhattan, The City of New York, and initially appoints the Trustee at its
Corporate Trust Office as the Company's office or agency for each of such
purposes in such City.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any), or interest on, any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, on or prior to each due date of the principal of (and
premium, if any), or interest on, any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any payment
of principal (and premium, if any) or interest on the Securities of that series;
and
50
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Except as otherwise provided in the form of Securities of any particular
series pursuant to the provisions of this Indenture, any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of (and premium, if any) or interest on any Security of
any series and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security or any coupon appertaining
thereto shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in an Authorized Newspaper in
each Place of Payment or to be mailed to Holders of Registered Securities, or
both, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.
SECTION 1004. Additional Amounts.
If the Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of any series or any
coupon appertaining thereto Additional Amounts as provided therein. Whenever in
this Indenture there is mentioned, in any context, the payment of the principal
of (or premium, if any) or interest on, or in respect of, any Security of any
series or any related coupon or the net proceeds received on the sale or
exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided for in this Section to the
extent that, in such context, Additional Amounts are, were or would be payable
in respect thereof pursuant to the provisions of this Section and express
mention of the payment of Additional Amounts (if applicable) in any provisions
hereof shall not be construed as excluding Additional Amounts in those
provisions hereof where such express mention is not made.
If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made), and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest if there has been any change with
respect to the
51
matters set forth in the below-mentioned Officers' Certificate, the Company will
furnish the Trustee and the Company's principal Paying Agent or Paying Agents,
if other than the Trustee, with an Officers' Certificate instructing the Trustee
and such Paying Agent or Paying Agents whether such payment of principal (and
premium, if any) or interest on the Securities of that series shall be made to
Holders of Securities of that series or the related coupons who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that Series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities or coupons and the Company will pay to the Trustee
or such Paying Agent the Additional Amounts required by this Section. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence, bad faith or intentional misconduct on their part arising
out of or in connection with actions taken or omitted by any of them in reliance
on any Officers' Certificate furnished pursuant to this Section.
SECTION 1005. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement, which need not comply with Section 102,
signed by the Chief Executive Officer, the President or a Vice President and by
the Treasurer, an Assistant Treasurer, the Controller or an Assistant Controller
of the Company, stating, as to each signer thereof, that
(a) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision, and
(b) to the best of his knowledge, based on such review, (i) the Company
has fulfilled all of its obligations under this Indenture throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to him and the nature and status thereof, and
(ii) no event has occurred and is continuing which is, or after notice or lapse
of time or both would become, an Event of Default, or, if such an event has
occurred and is continuing, specifying each such event known to him and the
nature and status thereof.
SECTION 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1005, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
SECTION 1007. Statement by Officers as to Default.
The Company shall deliver to the Trustee, as soon as practicable and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an
52
event which, with notice or the lapse of time or both, would constitute an
Event of Default, an Officers' Certificate setting forth the details of such
Event of Default and the action which the Company proposes to take with respect
thereto.
ARTICLE ELEVEN
SUBORDINATION
SECTION 1101. Securities Subordinated to Senior Indebtedness.
The Company and each Holder of a Security, by his acceptance thereof,
agree that (a) the payment of the principal of, premium (if any) and interest on
each and all the Securities and (b) any other payment in respect of the
Securities, including on account of the acquisition or redemption of Securities
by the Company, is subordinated, to the extent and in the manner provided in
this Article, to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Indenture or thereafter
created, incurred, assumed or guaranteed, and that these subordination
provisions are for the benefit of the holders of Senior Indebtedness.
This Article shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
SECTION 1102. No Payment on Securities in Certain Circumstances.
(a) No payment shall be made by or on behalf of the Company on account
of the principal of, premium (if any) or interest on the Securities of any
series or to acquire any of such Securities (including any repurchases of such
Securities pursuant to the provisions thereof at the option of the Holder of
such Securities) for cash or property (other than Junior securities of the
Company), or on account of any redemption provisions of such Securities, in the
event of default in payment of any principal of, premium (if any) or interest on
any Senior Indebtedness of the Company when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise (a "Senior Payment Default"), unless and until such
Senior Payment Default has been cured or waived or otherwise has ceased to
exist.
(b) No payment shall be made by or on behalf of the Company on account
of the principal of, premium (if any) or interest on the Securities of any
series or to acquire any of such Securities (including any repurchases of such
Securities pursuant to the provisions thereof at the option of the Holder of
such Securities) for cash or property (other than Junior securities of the
Company), or on account of the redemption provisions of such Securities, in the
event of any event of default (other than a Senior Payment Default) with respect
to any Designated Senior Indebtedness permitting the holders of such Designated
Senior Indebtedness (or a trustee or other representative on behalf of the
holders thereof) to declare such Designated Senior Indebtedness due and payable
prior to the date on which it would otherwise have become due and payable, upon
written notice thereof to the Company and the Trustee by any holders of
Designated Senior Indebtedness (or a trustee or other representative on behalf
of the holders thereof) (the "Payment
53
Notice"), unless and until such event of default shall have been cured or waived
or otherwise has ceased to exist; provided, that such payments may not be
prevented pursuant to this Section 1102(b) for more than 179 days after an
applicable Payment Notice has been received by the Trustee unless the Designated
Senior Indebtedness in respect of which such event of default exists has been
declared due and payable in its entirety, in which case no such payment may be
made until such acceleration has been rescinded or annulled or such Designated
Senior Indebtedness has been paid in full. No event of default that existed or
was continuing on the date of any Payment Notice (whether or not such event of
default is on the same issue of Designated Senior Indebtedness) may be made the
basis for the giving of a second Payment Notice, and only one such Payment
Notice may be given in any 365-day period.
(c) In furtherance of the provisions of Section 1101, in the event that,
notwithstanding the foregoing provisions of this Section 1102, any payment or
distribution of assets of the Company (other than Junior securities of the
Company) shall be received by the Trustee or the Holders of Securities of any
series at a time when such payment or distribution was prohibited by the
provisions of this Section 1102, then, unless such payment or distribution is no
longer prohibited by this Section 1102, such payment or distribution (subject to
the provisions of Section 1107) shall be received and held in trust by the
Trustee or such Holder or Paying Agent for the benefit of the holders of Senior
Indebtedness of the Company, and shall be paid or delivered by the Trustee or
such Holders or such Paying Agent, as the case may be, to the holders of Senior
Indebtedness of the Company remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
of the Company may have been issued, ratably, according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness of the Company held or
represented by each, for application to the payment of all Senior Indebtedness
in full after giving effect to all concurrent payments and distributions to or
for the holders of such Senior Indebtedness.
SECTION 1103. Securities Subordinated to Prior Payment of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or
similar proceeding or upon assignment for the benefit of creditors:
(a) the holders of all Senior Indebtedness of the Company shall first be
entitled to receive payments in full before the Holders of Securities of any
series are entitled to receive any payment on account of the principal of,
premium (if any) or interest on such Securities (other than Junior securities of
the Company);
(b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than Junior securities
of the Company), to which the Holders of Securities of any series or the Trustee
on behalf of such Holders would be entitled, except for the provisions of this
Article, shall be paid by the liquidating trustee or agent or other Person
making such a payment or distribution directly to the holders of such Senior
Indebtedness or their representative, ratably according to the respective
amounts of Senior Indebtedness held or represented by each, to the extent
necessary to make payment in full of all
54
such Senior Indebtedness remaining unpaid after giving effect to all concurrent
payments and distributions to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than Junior securities of the Company), shall be
received by the Trustee or the Holders of Securities of any series or any Paying
Agent (or, if the Company or any Affiliate of the Company is acting as its own
Paying Agent, money for any such payment or distribution shall be segregated or
held in trust) on account of the principal of, premium (if any) or interest on
the Securities of such series before all Senior Indebtedness of the Company is
paid in full, such payment or distribution (subject to the provisions of Section
1107) shall be received and held in trust by the Trustee or such Holder or
Paying Agent for the benefit of the holders of such Senior Indebtedness, or
their respective representatives, ratably according to the respective amounts of
such Senior Indebtedness held or represented by each, to the extent necessary to
make payment as provided herein of all such Senior Indebtedness remaining unpaid
after giving effect to all concurrent payments and distributions and all
provisions therefor to or for the holders of such Senior Indebtedness, but only
to the extent that as to any holder of such Senior Indebtedness, as promptly as
practical following notice from the Trustee to the holders of such Senior
Indebtedness that such prohibited payment has been received by the Trustee,
Holder(s) or Paying Agent (or has been segregated as provided above), such
holder (or a representative therefor) notifies the Trustee of the amounts then
due and owing on such Senior Indebtedness, if any, held by such holder and only
the amounts specified in such notices to the Trustee shall be paid to the
holders of such Senior Indebtedness.
SECTION 1104. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness of the Company
as provided herein, the Holders of the Securities shall be subrogated (to the
extent of the payments or distributions made to the holders of such Senior
Indebtedness pursuant to the provisions of this Article) to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full. For the purpose of such
subrogation, no such payments or distributions to the holders of such Senior
Indebtedness by the Company, or by or on behalf of the Holders of the Securities
by virtue of this Article, which otherwise would have been made to such Holders
shall, as between the Company and such Holders, be deemed to be payment by the
Company or on account of such Senior Indebtedness, it being understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of such Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article shall
have been applied, pursuant to the provisions of this Article, to the payment of
amounts payable under Senior Indebtedness of the Company, then such Holders
shall be entitled to receive from the holders of such Senior Indebtedness any
payments or distributions received by such holders of Senior Indebtedness in
excess of the amount sufficient to pay all amounts payable under or in respect
of such Senior Indebtedness in full.
55
SECTION 1105. Obligations of the Company Unconditional.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as between the Company and the
Holders of the Securities of any series, the obligation of the Company, which is
absolute and unconditional, to pay to such Holders the principal of, premium (if
any) and interest on the Securities of such series as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of such Holders and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article, of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy. Notwithstanding anything to the contrary in this
Article or elsewhere in this Indenture or in the Securities, upon any
distribution of assets of the Company referred to in this Article, the Trustee,
subject to the provisions of Sections 601 and 603, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other Person making any distribution to the Trustee or to
such Holders for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article so long as such court has been apprised of the provisions of, or
the order, decree or certificate makes reference to, the provisions of this
Article.
SECTION 1106. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee unless and until a Responsible Officer of the Trustee or any Paying
Agent shall have received, no later than two Business Days prior to such
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 601 and 603, shall be entitled in all respects conclusively to assume
that no such fact exists.
SECTION 1107. Application by Trustee of Amounts Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in accordance
with Article Four shall be for the sole benefit of Holders of the Securities of
the series for the benefit of which such amounts were deposited, and, to the
extent allocated for the payment of Securities of such series, shall not be
subject to the subordination provisions of this Article. Otherwise, any deposit
of assets with the Trustee or the Paying Agent (whether or not in trust) for the
payment of principal of, premium (if any) or interest on any Securities shall be
subject to the provisions of Sections 1101, 1102, 1103 and 1104; provided that
if prior to two Business Days preceding the date on which by the terms of this
Indenture any such assets may become distributable for any purpose (including
without limitation, the payment of either principal of, premium (if any) or
interest on any Security), the Trustee or such Paying Agent shall not have
received with respect
56
to such assets the written notice provided for in Section 1106, then the Trustee
or such Paying Agent shall have full power and authority to receive such assets
and to apply the same to the purpose for which they were received, and shall not
be affected by any notice to the contrary that may be received by it on or after
such date; and provided further that nothing contained in this Article shall
prevent the Company from making, or the Trustee from receiving or applying, any
payment in connection with the redemption of Securities if the first publication
of notice of such redemption (whether by mail or otherwise in accordance with
this Indenture) has been made, and the Trustee has received such payment from
the Company, prior to the occurrence of any of the contingencies specified in
Section 1102 or 1103.
SECTION 1108. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness to
enforce subordination provisions contained in this Article shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with. The holders of Senior Indebtedness may extend, renew,
modify or amend the terms of the Senior Indebtedness or any security therefor
and release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
this Indenture or the Holders of the Securities.
SECTION 1109. Trustee to Effectuate Subordination of Securities.
Each Holder of a Security by his acceptance thereof authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained in
this Article and to protect the rights of the Holders of the Securities pursuant
to this Indenture, and appoints the Trustee his attorney-in-fact for such
purpose, including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors of the Company),
the filing of a claim for the unpaid balance of his Securities in the form
required in said proceedings and cause said claim to be approved. If the Trustee
does not file a proper claim or proof of debt in the form required in such
proceeding prior to 30 days before the expiration of the time to file such claim
or claims, then the holders of the Senior Indebtedness or their representative
is hereby authorized to have the right to file and is hereby authorized to file
an appropriate claim for and on behalf of the Holders of said Securities.
Nothing herein contained shall be deemed to authorize the Trustee or the holders
of Senior Indebtedness or their representative to authorize or consent to or
accept or adopt on behalf of any Holder of Securities any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee or the holders
of Senior Indebtedness or their representative to vote in respect of the claim
of any Holder of the Securities in any such proceeding.
SECTION 1110. Right of Trustee to Hold Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all of the
rights set forth in this Article in respect of any Senior Indebtedness at any
time held by it to the same extent as any
57
other holder of Senior Indebtedness, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder.
SECTION 1111. Article Eleven Not to Prevent Events of Default.
The failure to make a payment on account of principal of or premium (if
any) or interest on the Securities by reason of any provision of this Article
shall not be construed as preventing the occurrence of a Default or an Event of
Default under Section 501 or in any way prevent the Holders of the Securities
from exercising any right hereunder other than the right to receive payment on
the Securities.
SECTION 1112. No Fiduciary Duty of Trustee to Holders of Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Indebtedness, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of the Securities or the Company or any
other Person, cash, property or securities to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article or otherwise. Nothing
in this Section 1112 shall affect the obligation of any other such Person to
hold such payment for the benefit of, and to pay such payment over to, the
holders of Senior Indebtedness or their representative.
SECTION 1113. Article Applicable to Paying Agent.
In case at any time any Payment Paying other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article in addition to or in place of the Trustee; provided, however,
that this Section 1113 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of Article.
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and this Article.
SECTION 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Company Order. In case of any redemption at the election of the Company of
less than all of the Securities of any series with the same issue date, interest
rate and Stated Maturity, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall
58
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series to be redeemed.
SECTION 1203. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series with the same issue date,
interest rate and Stated Maturity are to be redeemed, the particular Securities
to be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of such series not
previously called for redemption, by such method as the Trustee shall deem
appropriate and which may provide for the selection for redemption of portions
of the principal amount of Registered Securities of such series; provided,
however, that no such partial redemption shall reduce the portion of the
principal amount of a Registered Security of such series not redeemed to less
than the minimum denomination for a Security of that series established pursuant
to Section 302.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal of such Securities which has been or is to be redeemed.
SECTION 1204. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall include the Cusip Number, if any, and
shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Securities to be redeemed,
(4) in case any Registered Security is to be redeemed in part
only, the notice which relates to such Security shall state that on and after
the Redemption Date, upon surrender
59
of such Security, the Holder of such Security will receive, without charge, a
new Registered Security or Registered Securities of authorized denominations for
the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed, and, if applicable, that
interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities, together in the
case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the
case.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1205. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on all the Securities
or portions thereof which are to be redeemed on that date.
SECTION 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only upon presentation and surrender of coupons for such interest (at an
office or agency located outside the United States except as otherwise provided
in Section 1002), and provided, further, that installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
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If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside of the United States except
as otherwise provided in Section 1002.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1207. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at any office or agency of the Company maintained for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Registered Security or Securities of the same series, containing identical
terms and provisions, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered. If a Security in global
form is so surrendered, the Company shall execute, and the Trustee shall
authenticate and deliver to the U.S. Depository or other depository for such
Security in global form as shall be specified in the Company Order with respect
thereto to the Trustee, without service charge, a new Security in global form in
a denomination equal to and in exchange for the unredeemed portion of the
principal of the Security in global form so surrendered.
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise permitted or
required by any form of Security of such series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to
61
reduction as provided in Section 1302. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series to be made pursuant to the
terms of such Securities as provided for by the terms of such series, (1)
deliver Outstanding Securities of such series (other than any of such Securities
previously called for redemption or any of such Securities in respect of which
cash shall have been released to the Company), together in the case of any
Bearer Securities of such series with all unmatured coupons appertaining
thereto, and (2) apply as a credit Securities of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, provided that such
series of Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Securities of any series in lieu of
cash payments pursuant to this Section 1302, the principal amount of Securities
of such series to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities of such series
for redemption, except upon Company Request, and such cash payment shall be held
by the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall at the
request of the Company from time to time pay over and deliver to the Company any
cash payment so being held by the Trustee or such Paying Agent upon delivery by
the Company to the Trustee of Securities of that series purchased by the Company
having an unpaid principal amount equal to the cash payment requested to be
released to the Company.
SECTION 1303. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1302, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1203 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1204. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1206 and 1207.
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ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Article
Fourteen, in connection with any repayment of Securities, the Company may
arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a meeting of
Holders of Securities of such series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or as the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
given, in the manner provided in Section 106, not less than 21 nor more than 180
days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of
63
the notice of such meeting within 21 days after receipt of such request or shall
not thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of a specified
percentage in aggregate principal amount of the Outstanding Securities of a
series that is less or greater than a majority in principal amount of the
Outstanding Securities of such series, then, with respect to such action (and
only such action) the Persons entitled to vote such lesser or greater percentage
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes of the time
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in
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principal amount of the Outstanding Securities of that series; and provided,
further, that, except as limited by the proviso to Section 902, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of such series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination or proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of
Securities of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote, except as
a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons
65
entitled to vote a majority in principal amount of the Outstanding Securities of
such series represented at the meeting; and the meeting may be held as so
adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE SIXTEEN
MISCELLANEOUS PROVISIONS
SECTION 1601. Securities in Foreign Currencies.
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series, any amount in
respect of any Security denominated in a currency other than Dollars shall be
treated for any such action or distribution as that amount of Dollars that could
be obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such action, determination of rights or distribution (or, if there shall be no
applicable record date, such other date reasonably proximate to the date of such
action, determination of rights or distribution) as the Company may specify in a
written notice to the Trustee or, in the absence of such written notice, as the
Trustee may determine.
* * * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
66
IN WITNESS WHEREOF, the parties hereto have caused this Indenture, to be
duly executed as of the day and year first above written:
VALERO ENERGY CORPORATION
By:_____________________________________
Michael S. Ciskowski
Executive Vice President, and Chief
Financial Officer
Attest:
Jay D. Browning
Vice President and Corporate Secretary
THE BANK OF NEW YORK,
as Trustee
By:_____________________________________
Name:
Title:
67
EXHIBIT 4.10
FORM OF
AMENDED
AND
RESTATED
DECLARATION OF TRUST
TABLE OF CONTENTS
ARTICLE 1: INTERPRETATION AND DEFINITIONS.........................................................................1
SECTION 1.1 INTERPRETATION AND DEFINITIONS...............................................................1
ARTICLE 2: TRUST INDENTURE ACT...................................................................................12
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION............................................................12
SECTION 2.2 LISTS OF HOLDERS OF THE SECURITIES..........................................................13
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.............................................................13
SECTION 2.4 PERIODIC REPORTS TO THE PROPERTY TRUSTEE....................................................13
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT............................................13
SECTION 2.6 TRUST ENFORCEMENT EVENTS; WAIVER............................................................14
SECTION 2.7 TRUST ENFORCEMENT EVENT; NOTICE.............................................................15
ARTICLE 3: ORGANIZATION..........................................................................................15
SECTION 3.1 NAME AND ORGANIZATION.......................................................................15
SECTION 3.2 OFFICE......................................................................................16
SECTION 3.3 PURPOSE.....................................................................................16
SECTION 3.4 AUTHORITY...................................................................................16
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST..............................................................16
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES...................................................17
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES........................................19
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE...................................................20
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.................................22
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE..........................................................24
SECTION 3.11 DELAWARE TRUSTEE............................................................................26
SECTION 3.12 EXECUTION OF DOCUMENTS......................................................................26
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES......................................26
SECTION 3.14 DURATION OF TRUST...........................................................................26
SECTION 3.15 MERGERS.....................................................................................26
SECTION 3.16 COMPENSATION AND REIMBURSEMENT..............................................................28
SECTION 3.17 PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM...................................................28
SECTION 3.18 REGISTRATION STATEMENT AND RELATED MATTERS..................................................29
SECTION 3.19 BOOKS AND RECORDS...........................................................................30
ARTICLE 4: THE SPONSOR...........................................................................................30
SECTION 4.1 RESPONSIBILITIES OF THE SPONSOR.............................................................30
SECTION 4.2 INDEMNIFICATION AND EXPENSES OF THE TRUSTEES................................................31
ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES..................................................................31
SECTION 5.1 SENIOR DEFERRABLE NOTES ISSUER'S PURCHASE OF THE COMMON SECURITIES..........................31
SECTION 5.2 COVENANTS OF THE SENIOR DEFERRABLE NOTES ISSUER.............................................31
SECTION 5.3 HOLDER OF THE COMMON SECURITIES.............................................................32
SECTION 5.4 EXCHANGES...................................................................................32
ARTICLE 6: THE TRUSTEES..........................................................................................33
SECTION 6.1 NUMBER OF TRUSTEES..........................................................................33
SECTION 6.2 DELAWARE TRUSTEE; ELIGIBILITY...............................................................33
SECTION 6.3 PROPERTY TRUSTEE; ELIGIBILITY...............................................................33
SECTION 6.4 QUALIFICATIONS OF THE REGULAR TRUSTEES GENERALLY............................................34
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SECTION 6.5 INITIAL REGULAR TRUSTEES....................................................................34
SECTION 6.6 APPOINTMENT, REMOVAL AND RESIGNATION OF THE TRUSTEES........................................34
SECTION 6.7 VACANCIES AMONG TRUSTEES....................................................................36
SECTION 6.8 EFFECT OF VACANCIES.........................................................................36
SECTION 6.9 MEETINGS....................................................................................36
SECTION 6.10 DELEGATION OF POWER BY THE REGULAR TRUSTEES.................................................37
SECTION 6.11 MERGER, CONSOLIDATION, CONVERSION OR SUCCESSION TO BUSINESS.................................37
ARTICLE 7: TERMS OF THE SECURITIES...............................................................................37
SECTION 7.1 GENERAL PROVISIONS REGARDING THE SECURITIES.................................................37
SECTION 7.2 DISTRIBUTIONS...............................................................................40
SECTION 7.3 REDEMPTION OF SECURITIES....................................................................42
SECTION 7.4 REDEMPTION PROCEDURES.......................................................................42
SECTION 7.5 VOTING RIGHTS OF THE PREFERRED SECURITIES...................................................44
SECTION 7.6 VOTING RIGHTS OF THE COMMON SECURITIES......................................................46
SECTION 7.7 CERTIFICATE PAYING AGENT....................................................................47
SECTION 7.8 LISTING.....................................................................................47
SECTION 7.9 TRANSFER OF THE SECURITIES..................................................................48
SECTION 7.10 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES...........................................49
SECTION 7.11 DEEMED HOLDERS..............................................................................49
SECTION 7.12 GLOBAL SECURITIES...........................................................................49
SECTION 7.13 REMARKETING.................................................................................51
ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST.............................................................54
SECTION 8.1 DISSOLUTION AND TERMINATION OF THE TRUST....................................................54
SECTION 8.2 LIQUIDATION DISTRIBUTION UPON DISSOLUTION OF THE TRUST......................................55
ARTICLE 9: LIMITATION OF LIABILITY OF HOLDERS OF THE SECURITIES, THE DELAWARE TRUSTEE AND OTHERS................56
SECTION 9.1 LIABILITY...................................................................................56
SECTION 9.2 EXCULPATION.................................................................................57
SECTION 9.3 FIDUCIARY DUTY..............................................................................57
SECTION 9.4 INDEMNIFICATION.............................................................................58
SECTION 9.5 OUTSIDE BUSINESSES..........................................................................59
ARTICLE 10: ACCOUNTING..........................................................................................59
SECTION 10.1 FISCAL YEAR.................................................................................59
SECTION 10.2 CERTAIN ACCOUNTING MATTERS..................................................................59
SECTION 10.3 BANKING.....................................................................................60
SECTION 10.4 WITHHOLDING.................................................................................60
ARTICLE 11: AMENDMENTS AND MEETINGS.............................................................................61
SECTION 11.1 AMENDMENTS..................................................................................61
SECTION 11.2 MEETINGS OF THE HOLDERS OF THE SECURITIES; ACTION BY WRITTEN CONSENT........................63
ARTICLE 12: REPRESENTATIONS OF THE PROPERTY TRUSTEE AND THE DELAWARE
TRUSTEE..........................................................................................................64
SECTION 12.1 REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE......................................64
SECTION 12.2 REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE......................................65
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ARTICLE 13: MISCELLANEOUS........................................................................................65
SECTION 13.1 NOTICES.....................................................................................65
SECTION 13.2 GOVERNING LAW...............................................................................67
SECTION 13.3 INTENTION OF THE PARTIES....................................................................67
SECTION 13.4 HEADINGS....................................................................................67
SECTION 13.5 SUCCESSORS AND ASSIGNS......................................................................67
SECTION 13.6 PARTIAL ENFORCEABILITY......................................................................67
SECTION 13.7 COUNTERPARTS................................................................................67
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AMENDED AND RESTATED DECLARATION OF TRUST
This Amended and Restated Declaration of Trust of VEC Trust III
("Declaration"), dated as of ______ __, 200__, by and among Valero Energy
Corporation, a Delaware corporation, as Sponsor, Jay D. Browning, Michael S.
Ciskowski, and Donna M. Titzman, as the initial Regular Trustees, The Bank of
New York, as the initial Property Trustee, and The Bank of New York (Delaware),
as the initial Delaware Trustee, not in their individual capacities but solely
as Trustees, and the Holders, from time to time, of the Securities representing
undivided beneficial ownership interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, certain of the Trustees and the Sponsor established VEC Trust
III (the "Trust"), a statutory trust under the Statutory Trust Act, pursuant to
a Declaration of Trust dated as of February 26, 2002, (the "Original
Declaration") and a Certificate of Trust (the "Certificate of Trust") filed with
the Secretary of State of the State of Delaware on February 26, 2002; and
WHEREAS, the sole purpose of the Trust shall be to sell and issue
certain securities representing undivided beneficial interests in the assets of
the Trust, to invest the proceeds from such sales in the Senior Deferrable Notes
issued by the Senior Deferrable Notes Issuer and to engage in only those
activities necessary or incidental thereto; and
WHEREAS, the parties hereto, by this Declaration, amend and restate
each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act and that
this Declaration constitute the governing instrument of such statutory trust,
the trustees hereby declare that all assets contributed to the Trust be held in
trust for the benefit of the Holders, from time to time, of the Securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE 1: INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. Unless the context
otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above shall have the meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration shall have the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" shall be
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections, Recitals
and Exhibits shall be to Articles and Sections of, or Recitals and Exhibits to,
this Declaration unless otherwise specified;
1
(e) unless otherwise defined in this Declaration, a term defined in the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), shall have
the same meaning when used in this Declaration;
(f) a reference to the singular shall include the plural and vice
versa, and a reference to any masculine form of a term shall include the
feminine or neuter form of a term, as applicable; and
(g) the following terms shall have the following meanings:
"Affiliate" of any specified Person shall mean 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 shall mean
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" shall have meanings
correlative to the foregoing.
["Applicable Margin" shall mean the spread determined as set
forth below, based on the prevailing rating of the senior notes of the Senior
Deferrable Notes Issuer in effect at the close of business on the Business Day
immediately preceding the date of a Failed Remarketing:
Prevailing Rating Spread
----------------- ------
AA/ "Aa"........................... 3.00%
A/ "a"............................. 4.00%
BBB/ "Baa"......................... 5.00%
Below BBB/ "Baa"................... 7.00%
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For purposes of this definition, the "prevailing rating" of the senior notes of
the Senior Deferrable Notes Issuer shall be:
(i) AA/ "Aa" if the senior notes of the Senior Deferrable
Notes Issuer have a credit rating of AA or better by S&P and "Aa3" or
better by Moody's or the equivalent of such ratings by such agencies or
a comparable rating agency or comparable rating agencies selected by
the Remarketing Agent (after consultation with the Company);
(ii) if not under clause (i) above, then A/"a" if the senior
notes of the Senior Deferrable Notes Issuer have a credit rating of A-
or better by S&P and "A3" or better by Moody's or the equivalent of
such ratings by such agencies or a comparable rating agency or
comparable rating agencies selected by the Remarketing Agent (after
consultation with the Company);
(iii) if not under clauses (i) or (ii) above, then BBB/"Baa"
if the senior notes of the Senior Deferrable Notes Issuer have a credit
rating of BBB- or better by S&P and "Baa" or better by Moody's or the
equivalent of such ratings by such agencies or a comparable rating
agency or comparable rating agencies selected by the Remarketing Agent
(after consultation with the Company); or
2
(iv) if not under clauses (i) through (iii) above, then Below
BBB/"Baa."
Notwithstanding the foregoing, (A) if (i) the credit rating of the senior notes
of the Company by S&P shall be on the "Credit Watch" of S&P with a designation
of "negative implications" or "developing," or (ii) the credit rating of the
senior notes of the Company by Moody's shall be on the "Corporate Credit Watch
List" of Moody's with a designation of "downgrade" or "uncertain," or, in each
case, on any successor list of S&P or Moody's with a comparable designation, the
prevailing ratings of the senior notes of the Company shall be deemed to be
within a range one full level lower in the above table than those actually
assigned to the senior notes of the Company by Moody's and S&P and (B) if the
senior notes of the Company are rated by only one rating agency on or before the
Remarketing Date, the prevailing rating shall at all times be determined without
reference to the rating of any other rating agency; provided that if no such
rating agency shall have in effect a rating for the senior notes of the Company,
and the Remarketing Agent is unable to identify a comparable rating agency or
rating agencies, as required above, the prevailing rating shall be Below BBB/
"baa."]
["Applicable Ownership Interest" shall mean, with respect to a
PEPS Units and the U.S. treasury securities in the Treasury Portfolio, (A) a
1/40, or 2.5%, undivided beneficial ownership interest in a $1,000 face amount
of a principal or interest strip in a U.S. treasury security included in such
Treasury Portfolio that matures on or prior to _______, 200__ and (B) for each
scheduled interest payment date on the Senior Deferrable Notes after the Tax
Event Redemption Date, a 1/40, or 2.5%, undivided beneficial ownership interest
in a $1,000 face amount of a principal or interest strip in a U.S. treasury
security that matures on or prior to such date.]
["Applicable Principal Amount" shall mean either (A) if the
Tax Event Redemption Date occurs prior to the Purchase Contract Settlement Date,
the aggregate principal amount of the Senior Deferrable Notes corresponding to
the aggregate stated liquidation amount of the Preferred Securities that are
components of the PEPS Units on the Tax Event Redemption Date or (B) if the Tax
Event Redemption Date occurs on or after the Purchase Contract Settlement Date,
the aggregate principal amount of the Senior Deferrable Notes corresponding to
the aggregate stated liquidation amount of the Preferred Securities outstanding
on such Tax Event Redemption Date.]
"Authorized Officer" of a Person shall mean any Person that is
authorized to bind such Person.
"Beneficial Owner" shall mean, with respect to a Global
Security, a Person who is the beneficial owner of a book-entry interest in such
Global Security as reflected on the books of the Depositary or on the books of a
Person maintaining an account with such Depositary (directly as a Depositary
Participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"Business Day" shall mean any day other than a Saturday or
Sunday or a day on which banking institutions in the City of New York, New York
or San Antonio, Texas are authorized or required by law or executive order to
remain closed.
3
["Cash Settlement" shall have the meaning specified in the
Purchase Contract Agreement.]
"Certificate" shall mean a Common Security Certificate or a
Preferred Security Certificate.
"Certificate Paying Agent" shall have the meaning specified in
Section 7.7.
"Clearing Agency" shall mean an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book-entry transfers and pledges of the Preferred
Securities.
"Closing Date" shall mean the date on which the Preferred
Securities are initially issued and sold.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation. A reference to a
specific section of the Code refers not only to such specific section but also
to any corresponding provision of any federal tax statute enacted after the date
of this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
["Collateral Agent" shall mean ________________________.]
"Commission" shall mean the Securities and Exchange
Commission.
"Common Security" shall have the meaning specified in Section
7.1(a).
"Common Security Certificate" shall mean a definitive
certificate in fully registered form representing a Common Security,
substantially in the form of Exhibit B hereto.
"Company" shall mean Valero Energy Corporation, a Delaware
corporation, the Sponsor, Senior Deferrable Notes Issuer, and the parent of the
Trust.
"Compounded Distributions" shall have the meaning specified in
Section 7.2(b).
"Corporate Trust Office" shall mean the principal office of
the Property Trustee at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at
101 Barclay Street, 21 West, New York, New York 10286, Attn: Corporate Trust
Services Division.
"Covered Person" shall mean (A) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Sponsor, (ii) any Affiliate of the Sponsor, (iii) the Trust or (iv) any
Affiliate of the Trust and (B) any Holder.
"Depositary" shall mean, with respect to Securities issuable
in whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act
4
that is designated to act as depositary for such Securities, and initially shall
be The Depository Trust Company.
"Depositary Agreement" shall mean the agreement among the
Trust, the Property Trustee and the Depositary dated as of the Closing Date, as
the same may be amended or supplemented from time to time.
"Depositary Participant" shall mean a member of, or
participant in, the Depositary.
"Direct Action" shall have the meaning specified in Section
3.8(e).
"Distribution" shall mean a distribution payable to the
Holders in accordance with Section 7.2.
"Exchange Act" shall mean the Securities Exchange Act of 1934
and any statute successor thereto, in each case as amended from time to time,
and the rules and regulations promulgated thereunder.
["Failed Remarketing" shall have the meaning specified in
Section 7.13(h).]
"Fiscal Year" shall have the meaning specified in Section
10.1.
"Foreign Person" shall mean any Person that is not a United
States Person.
"Global Certificate" shall have the meaning specified in
Section 7.1(h).
"Global Security" shall mean a global Preferred Security
Certificate registered in the name of the Depositary or its nominee.
"Guarantee" shall mean the Guarantee Agreement, dated as of
________, 200__, of the Sponsor, as may be amended from time to time, in respect
of the Preferred Securities.
"Holder" shall mean any holder of Securities, as registered on
the books and records of the Trust, such holder being a beneficial owner within
the meaning of the Statutory Trust Act, provided that in determining whether the
Holders of the requisite liquidation amount of Preferred Securities have voted
on any matter provided for in this Declaration, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Preferred
Securities remain in the form of one or more Global Securities and if the
Depositary has sent an omnibus proxy to the Depositary Participants to whose
accounts the Preferred Securities are credited on the record date, the term
"Holders" shall mean such Depositary Participants acting at the direction of the
Beneficial Owners.
"Indemnified Person" shall mean any Trustee, any Affiliate of
any Trustee, any Paying Agent, any officers, directors, shareholders, members,
partners, employees, representatives or agents of any Trustee, Affiliate of a
Trustee or Paying Agent, or any officer, employee or agent of the Trust or any
of its Affiliates.
5
"Indenture" shall mean the indenture dated as of December 12,
1997, as supplemented by the supplemental indenture relating to the Senior
Deferrable Notes, dated as of __________, 200__, between the Senior Deferrable
Notes Issuer and the Indenture Trustee (including the provisions of the Trust
Indenture Act that are deemed incorporated therein), pursuant to which the
Senior Deferrable Notes are to be issued.
"Indenture Event of Default" shall have the meaning given to
the term "Event of Default" in the Indenture.
"Indenture Trustee" shall mean The Bank of New York, in its
capacity as trustee under the Indenture, until a successor is appointed
thereunder, and thereafter shall mean such successor trustee.
"Investment Company" shall mean an investment company as
defined in the Investment Company Act and the regulations promulgated
thereunder.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended from time to time, or any successor legislation.
"Legal Action" shall have the meaning specified in Section
3.6(f).
"List of Holders" shall have the meaning specified in Section
2.2(a).
"Majority in Liquidation Amount" shall mean, except as
provided by the Trust Indenture Act, Holders of outstanding Securities, voting
together as a single class, or, as the context may require, Holders of
outstanding Preferred Securities or Holders of the outstanding Common
Securities, voting separately as a class, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities, Preferred Securities or Common Securities, as the
case may be.
["Moody's" shall mean Moody's Investors Service, Inc.]
"New York Stock Exchange" shall mean the New York Stock
Exchange, Inc or any successor thereto.
"Officers' Certificate" shall mean, when delivered by the
Trust, a certificate signed by a majority of the Regular Trustees of the Trust
and, when delivered by the Sponsor, a certificate signed by (A) the Chairman of
the Board, President or a Vice President of the Sponsor and (B) the Treasurer,
Assistant Treasurer or Secretary of the Sponsor. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Declaration shall include, where applicable:
(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
6
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(iii) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
["Over-allotment Option" shall mean any over-allotment option
contained in the Underwriting Agreement [pursuant to which the PEPS Units are
sold].]
"Paying Agent" shall have the meaning specified in Section
3.8(h).
"Payment Amount" shall have the meaning specified in Section
7.2(c).
["PEPS Units" shall mean a security consisting of a unit
comprised of (A) a purchase contract under which the holder of the unit will
purchase from the Company, for $___ in cash, a certain number of shares of
common stock, par value $.01 per share, of the Company and (B) beneficial
ownership of a Preferred Security or Senior Deferrable Note, or in certain
circumstances following the occurrence of a Tax Event, the appropriate
Applicable Ownership Interest of the Treasury Portfolio.]
"Person" shall mean a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
["Pledge Agreement" shall mean the Pledge Agreement dated as
of _______, 200__ among the Company, the Collateral Agent, _________________, as
Securities Intermediary, and the Purchase Contract Agent.]
"Preferred Security" shall have the meaning specified in
Section 7.1(a).
"Preferred Security Certificate" shall mean a definitive
certificate in fully registered form representing a Preferred Security,
substantially in the form of Exhibit A.
["Primary Treasury Dealer" shall mean a primary U.S.
government securities dealer in New York City.]
"Property Account" shall have the meaning specified in Section
3.8(c)
"Property Trustee" shall mean the Trustee meeting the
eligibility requirements set forth in Section 6.3.
7
"Pro Rata" shall mean pro rata to each Holder according to the
aggregate liquidation amount of the Securities held by such Holder in relation
to the aggregate liquidation amount of all Securities outstanding.
["Purchase Contract Agent" shall mean ___________________.]
["Purchase Contract Agreement" shall mean the Purchase
Contract Agreement dated as of ________, 200__ between the Company and
__________________, as Purchase Contract Agent.]
["Purchase Contract Settlement Date" shall mean ___________,
200_.]
"Quorum" shall mean a majority of the Regular Trustees or, if
there are only two Regular Trustees, both of them.
["Quotation Agent" shall mean (A) _______________________ and
any respective successor, provided that if _________________________ or any
respective successor ceases to be a Primary Treasury Dealer, the Sponsor shall
substitute another Primary Treasury Dealer therefor or (B) any other Primary
Treasury Dealer selected by the Sponsor.]
["Redemption Amount" shall mean, for each Senior Deferrable
Note, the product of the principal amount of such Senior Deferrable Note and a
fraction, the numerator of which shall be the Treasury Portfolio Purchase Price
and the denominator of which shall be the Applicable Principal Amount.]
"Redemption/Distribution Notice" shall have the meaning
specified in Section 7.4(a).
"Redemption Price" shall mean the amount for which the
Securities will be redeemed, which amount will equal the lesser of (i) the
redemption price paid by the Senior Deferrable Notes Issuer to repay or redeem,
in whole or in part, the Senior Deferrable Notes held by the Trust plus an
amount equal to accumulated and unpaid Distributions on such Securities through
the date of their redemption or (ii) the amount received by the Trust in respect
of the Senior Deferrable Notes so repaid or redeemed.
"Regular Trustee" shall mean any trustee of the Trust other
than the Property Trustee and the Delaware Trustee.
["Remarketing" shall mean the operation of the procedures for
remarketing specified in Section 7.13.]
["Remarketed Securities" shall mean (i) so long as the Trust
has not been dissolved, the Preferred Securities or (ii) if the Trust has been
dissolved, the Senior Deferrable Notes.]
["Remarketing Agent" shall mean _____________________ or if
the Remarketing Agent is removed or resigns, any successor remarketing agent
selected by the Sponsor.]
8
["Remarketing Agreement" shall mean the Remarketing Agreement
dated as of ________, 200__ among the Company, the Trust and the Remarketing
Agent.]
["Remarketing Date" shall mean the third Business Day
preceding ________, 200__.]
["Remarketing Settlement Date" shall mean the date, if any, on
which the settlement of the Remarketed Securities has occurred through the
normal settlement procedures in effect at such time of the Depositary or any
successor Depositary.]
["Reset Rate" shall mean the distribution rate per annum, as
determined by the Remarketing Agent, that results from the Remarketing pursuant
to Section 7.13.]
"Responsible Officer" shall mean, with respect to the Property
Trustee, any officer with direct responsibility for the administration of this
Declaration and also shall mean, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred due to that officer's
knowledge of and familiarity with the particular subject.
"Rule 3a-5" shall mean Rule 3a-5 under the Investment Company
Act or any successor rule thereunder.
["S&P" shall mean Standard & Poor's Ratings Service, a
division of The McGraw-Hill Companies, Inc.]
["Scheduled Remarketing Settlement Date" shall mean the date,
if any, on which the settlement of the Remarketed Securities is scheduled to
occur.]
"Securities" shall mean the Common Securities and the
Preferred Securities.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Security Registrar" shall have the meaning specified in
Section 7.9(a)(iv).
"Senior Deferrable Notes" shall mean the series of senior
deferrable notes to be issued by the Senior Deferrable Notes Issuer under the
Indenture and to be purchased by the Trust and held by the Property Trustee.
"Senior Deferrable Notes Issuer" shall mean Valero Energy
Corporation, a Delaware corporation, or any successor entity in a merger,
consolidation, conversion, amalgamation or replacement by or conveyance,
transfer or lease of its properties substantially as an entirety, in its
capacity as issuer of the Senior Deferrable Notes under the Indenture.
"66 2/3% in Liquidation Amount" shall mean Holders of
outstanding Securities, voting together as a single class, or, as the context
may require, Holders of outstanding Preferred Securities voting separately as a
class, who are the record owners of 66 2/3% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the
9
voting percentages are determined) of all outstanding Securities or Preferred
Securities, as the case may be.
"Sponsor" shall mean Valero Energy Corporation, a Delaware
corporation, or any successor entity in a merger, consolidation, conversion,
amalgamation or replacement by or conveyance, transfer or lease of its
properties substantially as an entirety, in its capacity as sponsor of the
Trust.
"Statutory Trust Act" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time, or any successor legislation.
"Successor Delaware Trustee" shall have the meaning specified
in Section 6.6(b).
"Successor Entity" shall have the meaning specified in Section
3.15(b)(i).
"Successor Property Trustee" shall have the meaning specified
in Section 6.6(b).
"Successor Security" shall have the meaning specified in
Section 3.15(b)(i)(B).
"Supermajority" shall have the meaning specified in Section
2.6(a)(ii).
"Tax Event" shall mean the receipt by the Sponsor and the
Trust of an opinion of a law firm having a nationally recognized tax practice,
to the effect that, as a result of any amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein, or as a
result of any official administrative decision, pronouncement, judicial decision
or action interpreting or applying such laws or regulations, which amendment or
change is effective or which proposed change, pronouncement, action or decision
is announced on or after the Closing Date, there is more than an insubstantial
increase in the risk that (i) the Trust is, or within 90 days of the date of
such opinion will be, subject to United States federal income tax with respect
to income received or accrued on the Senior Deferrable Notes, (ii) interest
payable by the Senior Deferrable Notes Issuer on the Senior Deferrable Notes is
not, or within 90 days of the date of such opinion will not be, deductible by
the Senior Deferrable Notes Issuer, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or within 90 days of the
date of such opinion will be, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
"Tax Event Redemption" shall mean that a Tax Event has
occurred and is continuing and the Senior Deferrable Notes have been called for
redemption pursuant to the Indenture.
"Tax Event Redemption Date" shall mean the date of the Tax
Event Redemption, if any, specified by the Senior Deferrable Notes Issuer.
"10% in Liquidation Amount" shall mean, except as provided by
the Trust Indenture Act, Holder(s) of outstanding Securities, voting together as
a single class, or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding
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Common Securities, voting separately as a class, who are the record owners of
10% or more of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accumulated and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
["Termination Event" shall have the meaning set forth in
Section 1.1 of the Purchase Contract Agreement.]
["Treasury PEPS Units" shall mean a PEPS Units with respect to
which Treasury Securities have been substituted for the Preferred Securities or
Applicable Ownership Interest of the Treasury Portfolio component, as
applicable.]
["Treasury Portfolio" shall mean, with respect to the
Applicable Principal Amount of Senior Deferrable Notes, a portfolio of
zero-coupon U.S. treasury securities consisting of (i) principal or interest
strips of U.S. treasury securities that mature on or prior to the Purchase
Contract Settlement Date in an aggregate amount at maturity equal to the
Applicable Principal Amount and (ii) with respect to each scheduled interest
payment date on the Senior Deferrable Notes that occurs after the Tax Event
Redemption Date, principal or interest strips of U.S. treasury securities that
mature on or prior to such date in an aggregate amount at maturity equal to the
aggregate interest payment that would have been due on the Applicable Principal
Amount of the Senior Deferrable Notes on such date.]
["Treasury Portfolio Purchase Price" shall mean the lowest
aggregate price quoted by a Primary Treasury Dealer, to the Quotation Agent on
the third Business Day preceding the Tax Event Redemption Date for the purchase
of the Treasury Portfolio for settlement the Tax Event Redemption Date.]
"Treasury Regulations" shall mean the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Department of the Treasury, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).
["Treasury Securities" shall mean zero-coupon U.S. Treasury
Securities (CUSIP Number _______________) with a principal amount at maturity
equal to $1,000 and maturing on ___________, 200__, the business day preceding
the Purchase Contract Settlement Date.]
"Trust" shall have the meaning specified in the Recitals
hereto.
"Trust Enforcement Event" in respect of the Securities shall
mean that an Indenture Event of Default has occurred and is continuing in
respect of the Senior Deferrable Notes.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
"Trustee" or "Trustees" shall mean each Person that has signed
this Declaration as a trustee, so long as such Person continues in office in
accordance with the terms hereof, and all other Persons that from time to time
may be duly appointed, qualified and serving as Trustees in
11
accordance with the provisions hereof, and references herein to a Trustee or the
Trustees shall refer to such Person or Persons solely in their capacity as
trustees hereunder.
["Two-Year Benchmark Treasury Rate" shall mean the bid side
rate displayed at 10:00 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date for direct
obligations of the United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the remaining term to
maturity of the Senior Deferrable Notes, as agreed upon by the Company and the
Remarketing Agent in the Telerate system (or if the Telerate system is (a) no
longer available on the third Business Day immediately preceding the Purchase
Contract Settlement Date or (b) in the opinion of the Remarketing Agent (after
consultation with the Company) no longer an appropriate system from which to
obtain such rate, such other nationally recognized quotation system as, in the
opinion of the Remarketing Agent (after consultation with the Company) is
appropriate. If such rate is not so displayed, the rate for the Two-Year
Benchmark Treasury Rate shall be, as calculated by the Remarketing Agent, the
yield to maturity for the Preferred Securities, expressed as a bond equivalent
on the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis, and computed by taking the arithmetic mean of the secondary market bid
rates, as of 10:30 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date of three leading
United States government securities dealers selected by the Remarketing Agent
(after consultation with the Company) (which may include the Remarketing Agent
or an affiliate thereof).]
"United States Person" shall mean a United States person for
United States federal income tax purposes.
"Underwriting Agreement" shall mean the Underwriting Agreement
dated as of ________, 200__ among the Trust, the Sponsor and
______________________, as [representatives of the several] underwriters [named
therein].
ARTICLE 2: TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and, to the
extent applicable, shall be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a trustee
for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties of the Trust Indenture Act shall
control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the Trust's classification as a grantor trust for United States
federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in the assets of
the Trust.
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SECTION 2.2 Lists of Holders of the Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee a list of the names and addresses of the
Holders of the Securities in such form as the Property Trustee may reasonably
require ("List of Holders") (i) as of the record date relating to the payment of
any Distribution, at least one Business Day prior to the date for payment of
such Distribution, except while the Preferred Securities are represented by one
or more Global Securities, and (ii) at any other time, within 30 days of receipt
by the Trust of a written request from the Property Trustee for a List of
Holders as of a date no more than 15 days before such List of Holders is
provided to the Property Trustee. If at any time the List of Holders does not
differ from the most recent List of Holders provided to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust, then neither the
Sponsor nor the Regular Trustees shall be obligated to deliver such List of
Holders. The Property Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders provided
to it or that it receives in its capacity as Paying Agent (if acting in such
capacity); provided that the Property Trustee may destroy any List of Holders
previously provided to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under, and
shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of the
Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after _______ of each year (commencing with the
year of the first anniversary of the issuance of the Preferred Securities), the
Property Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee also shall comply with the requirements of Section 313(d)
of the Trust Indenture Act. The Sponsor shall promptly notify the Property
Trustee when any Preferred Securities are listed for trading on any stock
exchange and any delisting thereof.
SECTION 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular 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 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act. Compliance certificates required by Section 314(a)(4) of the
Trust Indenture Act shall be delivered to the Property Trustee annually on or
before 120 days after the end of each fiscal year of the Sponsor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular 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 Declaration that relate to
any of the matters set forth in Section 314(c) of the
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Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the Preferred
Securities may waive, by vote or written consent, on behalf of the Holders of
all of the Preferred Securities, any past Trust Enforcement Event in respect of
the Preferred Securities and its consequences, provided that if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, then the Trust
Enforcement Event under this Declaration also shall not be waivable;
and
(ii) requires the vote or consent of the holders of greater
than a majority in principal amount of the Senior Deferrable Notes (a
"Supermajority") to be waived under the Indenture, the related Trust
Enforcement Event under this Declaration only may be waived by the vote
or written consent of the Holders of at least the same Supermajority in
aggregate stated liquidation amount of the Preferred Securities
outstanding.
The foregoing provisions of this Section 2.6 shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act, and Section 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Trust Enforcement Event in respect of the Preferred Securities shall be deemed
to have been cured for every purpose of this Declaration and the Preferred
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Preferred Securities or impair any right
consequent thereon. Any waiver by the Holders of the Preferred Securities of a
Trust Enforcement Event with respect to the Preferred Securities also shall be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event with respect to the Common Securities for all
purposes of this Declaration without any further act, vote or consent of the
Holders of the Common Securities.
(b) The Holders of the Common Securities may waive, by vote or written
consent, any past Trust Enforcement Event in respect of the Common Securities
and its consequences, provided that if the underlying Indenture Event of Default
is not waivable under the Indenture, then, except where the Holders of the
Common Securities have been deemed to have waived such Trust Enforcement as
provided below in this Section 2.6(b), the related Trust Enforcement Event under
this Declaration also shall not be waivable. The Holders of the Common
Securities shall be deemed to have waived any and all Trust Enforcement Events
in respect of the Common Securities and the consequences thereof until all Trust
Enforcement Events in respect of the Preferred Securities have been cured,
waived or otherwise eliminated. Until all Trust Enforcement Events in respect of
the Preferred Securities have been so cured, waived or otherwise eliminated, the
Property Trustee shall be deemed to be acting solely on behalf of the Holders of
the Preferred Securities, and only the Holders of the Preferred Securities shall
have the right to direct the Property Trustee. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act, and Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the
14
foregoing provisions of this Section 2.6(b), upon such cure, waiver or other
elimination, any Trust Enforcement Event in respect of the Common Securities
shall be deemed to have been cured for every purpose of this Declaration and the
Common Securities, but no such waiver shall extend to any subsequent or other
Trust Enforcement Event with respect to the Common Securities or impair any
right consequent thereon.
(c) A waiver of an Indenture Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred Securities
shall constitute a waiver of the corresponding Trust Enforcement Event under
this Declaration. Any such waiver by the Holders of the Preferred Securities
also shall be deemed to constitute a waiver by the Holders of the Common
Securities of any such Trust Enforcement Event with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities. The foregoing provisions of
this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust
Indenture Act, and Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
SECTION 2.7 Trust Enforcement Event; Notice.
(a) Within 90 days after the occurrence of a Trust Enforcement Event
actually known to a Responsible Officer of the Property Trustee, the Property
Trustee shall transmit by mail, first class postage prepaid, to the Holders of
the Securities, notice of such Trust Enforcement Event, unless such Trust
Enforcement Event has been cured before the giving of such notice; provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Senior Deferrable Notes, the Property Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Property Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
Trust Enforcement Event except for:
(i) a default under Section 501(1) and (2) of the Indenture;
or
(ii) any default as to which the Property Trustee shall have
received written notice or of which a Responsible Officer of the
Property Trustee charged with the administration of this Declaration
shall have actual knowledge.
ARTICLE 3: ORGANIZATION
SECTION 3.1 Name and Organization.
The Trust hereby continued is named "VEC Trust III," as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
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SECTION 3.2 Office.
The address of the principal office of the Trust is One Valero
Place, San Antonio, Texas 78212. On ten Business Days' written notice to the
Holders of the Securities, the Regular Trustees may designate another principal
office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities, (b) to use the gross proceeds from such sale to
acquire the Senior Deferrable Notes and (c) except as otherwise limited herein,
to engage in only those other activities necessary or incidental thereto. The
Trust shall not borrow money, issue debt, reinvest proceeds derived from
investments, pledge any of its assets or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified as a
grantor trust for United States federal income tax purposes.
By the acceptance of this Trust, none of the Trustees, the
Sponsor, the Holders of the Preferred Securities or the Common Securities or the
Beneficial Owners of the Preferred Securities will take any position that is
contrary to the classification of the Trust as a grantor trust for United State
federal income tax purposes.
SECTION 3.4 Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. Any action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and shall serve to bind the Trust, and any action taken by the Property Trustee
in accordance with its powers shall constitute the act of and shall serve to
bind the Trust. In dealing with the Trustees acting on behalf of the Trust, no
Person shall be required to inquire into the authority of the Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Trustees as set forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by or with the consent of any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Statutory Trust Act or applicable law, any Regular
Trustee may delegate to any other natural person over the age of 21, by power of
attorney consistent with applicable law, his or her power for the purposes of
signing any documents that the Regular Trustees have power and authority to
cause the Trust to execute pursuant to Section 3.6.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Senior
Deferrable Notes and the Property Account or as otherwise provided in this
Declaration, legal title to all assets of the
16
Trust shall be vested in the Trust. The Holders of the Securities shall not have
legal title to any part of the assets of the Trust but shall have undivided
beneficial ownership interests in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities; and
provided further that there shall be no interests in the Trust other than the
Securities, and the issuance of the Securities shall be limited to a one-time,
simultaneous issuance of both Preferred Securities and Common Securities on the
Closing Date[, subject to the issuance of additional Securities pursuant to the
exercise of any Over-allotment Option];
(b) to acquire the Senior Deferrable Notes with the proceeds of the
sale of the Securities; provided that the Regular Trustees shall cause legal
title to the Senior Deferrable Notes to be held of record in the name of the
Property Trustee for the benefit of the Holders of the Securities;
(c) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Tax Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any action in relation to any such Tax Event;
(d) to establish a record date with respect to all actions to be taken
hereunder that require a record date to be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of the Securities as to such actions and applicable
record dates;
(e) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of this Declaration;
(f) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(g) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to pay reasonable compensation for such
services, provided that any Person so employed or engaged is a United States
Person;
(h) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(i) to give to the Property Trustee the certificate required by Section
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Regular Trustee;
17
(j) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(k) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(l) to take all action that may be necessary or appropriate for the
preservation and continuation of the Trust's valid existence, rights, franchise
and privileges as a statutory trust under the laws of the State of Delaware and
of each other jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Securities or to enable the Trust to
effect the purposes for which it was created;
(m) to take any action not inconsistent with applicable law that the
Regular Trustees determine in their discretion to be necessary or desirable in
carrying out the purposes and functions of the Trust as set forth in Article 3
or the activities of the Trust as set forth in this Section 3.6, including:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified as a grantor trust for
United States federal income tax purposes; and
(iii) cooperating with the Senior Deferrable Notes Issuer to
ensure that the Senior Deferrable Notes will be treated as indebtedness
of the Senior Deferrable Notes Issuer for United States federal income
tax purposes;
(n) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed;
(o) to prepare, execute and file a certificate of cancellation of the
Certificate of Trust of the Trust pursuant to Section 8.1(b);
(p) in connection with the issuance of the Preferred Securities, to
execute, deliver and perform the Depositary Agreement on behalf of the Trust;
(q) if and to the extent that the Sponsor on behalf of the Trust has
not already done so, to cause the Trust to enter into the Underwriting Agreement
and/or such other agreements and arrangements as may be necessary or desirable
in connection with the sale of the Preferred Securities to the initial
purchasers thereof and the consummation thereof, and to take all action, and
exercise all discretion, as may be necessary or desirable in connection with the
consummation thereof; and
(r) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees shall exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the
18
Regular Trustees shall have no power to, and shall not, take any action that is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Senior Deferrable Notes Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust in connection
with its ownership of the Senior Deferrable Notes, but the Property
Trustee shall distribute all such proceeds to the Holders of the
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess property for any purpose other than a Trust
purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as to
vary the Trust's assets;
(vi) possess any power or otherwise act in such a way as to
vary the terms of the Securities in any way whatsoever (except to the
extent expressly authorized in this Declaration or by the terms of the
Securities);
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(viii) other than as provided in this Declaration, (A) direct
the time, method and place of exercising any trust or power conferred
upon the Indenture Trustee with respect to the Senior Deferrable Notes,
(B) waive any past default that is waivable under the Indenture, (C)
exercise a right to rescind or annul any declaration that the principal
of all the Senior Deferrable Notes shall be due and payable or (D)
consent to any amendment, modification or termination of the Indenture
or the Senior Deferrable Notes where such consent is required, unless
the Trust has received an opinion of counsel to the effect that such
modification will not cause more than an insubstantial increase in the
risk that the Trust will not be classified as a grantor trust for
United States federal income tax purposes;
19
(ix) take any action inconsistent with the status of the Trust
as grantor trust for United States federal income tax purposes;
(x) revoke any action previously authorized or approved by
vote of the Holders of the Preferred Securities; or
(xi) after the date hereof, enter into any contract or
agreement (other than any depositary agreement or any agreement with
any securities exchange or automated quotation system) that does not
expressly provide that the Holders of Preferred Securities, in their
capacities as such, have limited liability (in accordance with the
provisions of the Statutory Trust Act) for the liabilities and
obligations of the Trust, which express provision shall be in
substantially the following form:
The Holders of the Preferred Securities, in their capacities
as such, shall not be personally liable for any liabilities or
obligations of the Trust arising out of this Agreement, and
the parties hereto hereby agree that the Holders of the
Preferred Securities, in their capacities as such, shall be
entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
The failure of the Trust to include such a provision shall not in and
of itself cause the Trust's executing, delivery and performing such
contract or agreement to be ultra vires.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Senior Deferrable Notes shall be owned by
and held of record in the name of the Property Trustee in trust for the benefit
of the Trust and the Holders of the Securities. The right, title and interest of
the Property Trustee to the Senior Deferrable Notes shall vest automatically in
each Person that hereafter may be appointed as Property Trustee in accordance
with Section 6.6. To the fullest extent permitted by law, such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Senior Deferrable Notes have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Senior Deferrable Notes to the Regular Trustees nor to the
Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of
the Securities and, upon the receipt of payments of funds made in
respect of the Senior Deferrable Notes, deposit such funds into the
Property Account and make payments to the Holders of the Securities
from the Property Account in accordance with Section 7.2. Funds in the
Property Account shall be held
20
uninvested until disbursed in accordance with this Declaration. The
Property Account shall be an account that is maintained with a banking
institution, the rating on whose long-term unsecured indebtedness is at
least equal to the rating assigned to the Company's senior notes by a
"nationally recognized statistical rating organization" within the
meaning of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Securities to
the extent the Senior Deferrable Notes are redeemed or mature;
(iii) upon written direction by the Sponsor to dissolve the
Trust, to engage in such ministerial activities as shall be necessary
or appropriate to effect the distribution of the Senior Deferrable
Notes to the Holders of the Securities in exchange for the Securities;
and
(iv) be a United States Person.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
this Declaration and the Securities.
(e) The Property Trustee shall take any Legal Action that arises out of
or in connection with (i) a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or (ii) the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided that if a Trust Enforcement Event has occurred and is continuing
and such event is attributable to the failure of the Senior Deferrable Notes
Issuer to pay interest or principal on the Senior Deferrable Notes on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Preferred Securities may institute a
proceeding directly against the Senior Deferrable Notes Issuer to enforce
payment to such Holder of the principal or interest on Senior Deferrable Notes
having an aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such Holder (a "Direct Action"). In connection
with such Direct Action, the Senior Deferrable Notes Issuer will be subrogated
to the rights of such Holder of Preferred Securities to the extent of any
payment made by the Senior Deferrable Notes Issuer to such Holders of Preferred
Securities in such Direct Action.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation have been distributed to the Holders of the
Securities pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.6.
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Senior Deferrable Notes under
the Indenture and, if a Trust Enforcement Event actually known to a Responsible
Officer of the Property Trustee occurs and
21
is continuing, the Property Trustee shall enforce, for the benefit of Holders of
the Securities, its rights as holder of the Senior Deferrable Notes subject to
the rights of the Holders of the Securities pursuant to the terms of such
Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities, and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time, and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees set
forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the cure or waiver of all Trust Enforcement Events
that may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration, and no implied covenants shall be
read into this Declaration against the Property Trustee. If a Trust Enforcement
Event has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Property Trustee has actual knowledge, the
Property Trustee shall exercise such of the rights and powers vested in it by
this Declaration and shall use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and
after the cure or waiver of all such Trust Enforcement Events that may
have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of
this Declaration, and the Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations
shall be read into this Declaration against the
Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as
to the truth of the statements and the correctness of
the opinions expressed therein,
22
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of
this Declaration; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Property Trustee, the Property Trustee shall be under a
duty to examine such certificates or opinions to
determine whether or not they conform to the
requirements of this Declaration (but need not confirm
or investigate the accuracy of mathematical
calculations or other facts stated therein);
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it has been proven 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 without negligence, in
good faith in accordance with the direction of the Holders of not less
than a Majority in Liquidation Amount of the Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it has reasonable
grounds for believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this Declaration or
indemnity reasonably satisfactory to the Property Trustee against such
risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe-keeping and physical preservation of the Senior
Deferrable Notes and the Property Account shall be to deal with such
property in a similar manner as the Property Trustee deals with similar
property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Senior Deferrable Notes or the payment of any taxes or assessments
levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it otherwise may agree
with the Sponsor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Property Account maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this
23
Declaration, nor shall the Property Trustee be liable for any default
or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) The Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(ii) Any direction or act of the Sponsor contemplated by this
Declaration shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Property Trustee (unless other evidence is herein specifically
prescribed) may request, in the absence of bad faith on its part, and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor.
(iv) The Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof.
(v) The Property Trustee may consult with counsel of its
choice or other experts, and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction.
(vi) The Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder of Securities, unless such
Holder of Securities has provided to the Property Trustee security and
indemnity, reasonably satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Property Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Property Trustee; provided that nothing contained in this Section
3.10(a) shall be taken to relieve the Property Trustee, upon the
occurrence of an Indenture Event of Default, of its obligation to
exercise the rights and powers vested in it by this Declaration.
24
(vii) The Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it sees fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Sponsor,
personally or by agent or attorney at the sole cost of the Sponsor and
shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation.
(viii) The Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys, provided that any
such action (other than ministerial action) executed or performed by
such agent or attorney is executed or performed by an agent or an
attorney that is a United States Person, and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and
the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action, and no third party
shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be evidenced
conclusively by the Property Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (A) may request instructions from the
Holders of the Securities, which instructions only may be given by the
Holders of the same proportion in liquidation amount of the Securities
as would be entitled to direct the Property Trustee under this
Declaration in respect of such remedy, right or action, (B) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received and (C) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) Except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration.
(xii) The Property Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it without negligence, in
good faith and reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation
25
conferred or imposed on it, in any jurisdiction in which it shall be illegal, or
in which the Property Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts, or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Property Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 6.2, the Delaware Trustee shall not be entitled to exercise any
powers of, nor shall the Delaware Trustee have any of the duties and
responsibilities of, the trustees described in this Declaration. Except as set
forth in Section 6.2, the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of Section 3807(a) of the
Statutory Trust Act and shall be a United States Person. If the Property
Trustee, meeting the requirements of Section 6.2, also acts as Delaware Trustee,
this Section 3.11 shall not apply.
SECTION 3.12 Execution of Documents.
Except as otherwise required by the Statutory Trust Act or
applicable law, any Regular Trustee is authorized to execute on behalf of the
Trust any documents that the Regular Trustees have the power and authority to
execute pursuant to Section 3.6.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities, the Senior Deferrable Notes or the Indenture.
SECTION 3.14 Duration of Trust.
The Trust shall exist until dissolved pursuant to the
provisions of Article 8 hereof.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate with, convert into, amalgamate or
merge with or into, be replaced by or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other body, except
as described in Section 3.15(b) and (c) or Section 8.2.
(b) At the request of the Sponsor and with the consent of the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Preferred Securities, the Delaware
Trustee or the Property Trustee, the Trust may consolidate with, convert into,
amalgamate or merge with or into, be replaced by or convey, transfer or lease
its properties substantially as an entirety to a trust organized as such under
the laws of any state; provided that:
(i) if the Trust is not the successor entity, such successor
entity (the "Successor Entity") either:
26
(A) expressly assumes all of the obligations of the Trust
with respect to the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the
"Successor Securities"), so long as such Successor
Securities rank the same as the Securities with respect
to Distributions and payments upon liquidation,
redemption and otherwise;
(ii) the Senior Deferrable Notes Issuer expressly appoints a
trustee of such Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the Senior Deferrable
Notes;
(iii) the Preferred Securities or any Successor Securities are
or, upon notification of issuance will be, listed on any national
securities exchange or with any other organization on which the
Preferred Securities are then listed or quoted;
(iv) such consolidation, conversion, amalgamation, merger,
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 consolidation, conversion, amalgamation, merger,
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 consolidation, conversion, amalgamation,
merger, replacement, conveyance, transfer or lease, the Sponsor has
received an opinion of independent counsel to the Trust experienced in
such matters to the effect that:
(A) such consolidation, conversion, amalgamation, merger,
replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges
of the Holders of the Securities (including any
Successor Securities) in any material respect;
(B) following such consolidation, conversion, amalgamation,
merger, 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
(C) following such consolidation, conversion, amalgamation
or merger, replacement, conveyance, transfer or lease,
the Trust (or
27
such Successor Entity) will continue to be classified
as a grantor trust for United States federal income tax
purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of
the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities, at
least to the extent provided by the Guarantee; and
(ix) such Successor Entity expressly assumes all of the obligations of
the Trust.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate with, convert into, amalgamate or merge with or into, 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
with, amalgamate, merge with or into, or replace it, if such consolidation,
conversion, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or any successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes or would cause each
Holder of Securities not to be treated as owning an undivided beneficial
ownership interest in the Senior Deferrable Notes.
SECTION 3.16 Compensation and Reimbursement.
The Sponsor agrees to pay each of the Trustees from time to
time such compensation for all services rendered by such Trustee hereunder as
the Sponsor and such Trustee may agree upon from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust). To the fullest extent permitted
by law the parties intend that Section 3561 of Title 12 of the Delaware Code
shall not apply to the Trust and that compensation paid pursuant to this Section
3.16 not be subject to review by any court under Section 3560 of Title 12 of the
Delaware Code.
SECTION 3.17 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities are then due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee has
made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount securities, such portion of the liquidation amount as
may be specified in the terms of such securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
28
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders of the Securities allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities to make such payments to the Property Trustee and, in
the event the Property Trustee consents to the making of such payments directly
to the Holders, to pay to the Property Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt, on behalf of any Holder
of Securities, any plan of reorganization, arrangement, adjustment or
compensation affecting the Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder of
Securities in any such proceeding.
SECTION 3.18 Registration Statement and Related Matters.
In accordance with the Original Declaration, the Sponsor was
authorized (a) to prepare and file with the Commission and execute, in each case
on behalf of the Trust, (i) a Registration Statement on Form S-3 (Registration
Nos. _________, _____________ and ____________) (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments thereto,
relating to the registration under the Securities Act of the Preferred
Securities and certain other securities of the Sponsor and (ii) if the Sponsor
deemed it desirable, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement"), including all pre-effective and post-effective
amendments thereto, relating to the registration of the Preferred Securities
under Section 12 of the Exchange Act; (b) if the Sponsor deemed it desirable, to
prepare and file with New York Stock Exchange, Inc. or any other automated
quotation system, exchange or over-the-counter market (collectively, the
"Exchanges") and execute on behalf of the Trust a listing application or
applications and all other applications, statements, certificates, agreements
and other instruments as shall be necessary or desirable to cause the Preferred
Securities to be listed on any Exchange; (c) to prepare and file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as the Sponsor, on behalf of the Trust, deemed necessary or desirable
to register the Preferred Securities under the securities or "Blue Sky" laws of
such jurisdictions as the Sponsor, on behalf of the Trust, deemed necessary or
desirable; (d) to negotiate the terms of and execute on behalf of the Trust the
Underwriting Agreement; and (e) to execute and deliver on behalf of the Trust
letters or documents to, or instruments for filing with, the Clearing Agency
relating to the Preferred Securities. In the event that any filing referred to
in clauses (a)-(c) above is required by the rules and regulations of the
Commission, any Exchange, the National Association of Securities Dealers, Inc.
or state securities or blue sky laws, to be executed on behalf of the Trust by
the Regular Trustees, the Regular Trustees, in their capacities as Trustee of
the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the
29
foregoing. In connection with all of the foregoing, each Regular Trustee, solely
in its capacity as Trustee of the Trust, has constituted and appointed, and
hereby confirms the appointment of, Jay D. Browning, Michael S. Ciskowski and
Donna M. Titzman, and each of them, as his, her or its, as the case may be, true
and lawful attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for such Trustee or in such Trustee's name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to the 1933 Act Registration Statement and the 1934 Act Registration
Statement and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof. Notwithstanding anything in
this Section 3.18 to the contrary, no Foreign Person (acting in its capacity as
attorney-in-fact or agent of any Foreign Person) shall be authorized to take or
perform any action on behalf of the Trust pursuant to this Section 3.18 at any
time on or after the Closing Date.
SECTION 3.19 Books and Records.
The books and records of the Trust will be maintained at the
principal office of the Trust and will be open for inspection by each Holder of
Preferred Securities or any authorized representative of such Holder for any
purpose reasonably related to the Holder's interest in the Trust during normal
business hours.
ARTICLE 4: THE SPONSOR
SECTION 4.1 Responsibilities of the Sponsor.
In connection with the sale and issuance of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare, execute and file with the Commission, on behalf of the
Trust, a registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments or supplements thereto, and to take any
other action relating to the registration and sale of the Preferred Securities
under federal and state securities laws;
(b) if necessary, to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred Securities
[PEPS Units] and to do any and all such acts, other than actions that must be
taken by the Trust, and advise the Trust of actions it must take; to prepare,
execute and file, on behalf of the Trust, any documents it deems necessary or
advisable in order to comply with the applicable laws of any such states; and to
prepare, execute and file, on behalf of the Trust, any such documents or take
any acts determined by it to be necessary in order to qualify or register all or
part of the Preferred Securities [PEPS Units] in any state in which it has
determined to qualify or register such Preferred Securities [PEPS Units] for
sale;
30
(c) if necessary, to prepare, execute and file on behalf of the Trust,
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;
(d) if necessary, to prepare, execute and file with the Commission, on
behalf of the Trust, a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12 of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of, and execute and enter into, an
Underwriting Agreement providing for the sale of the Preferred Securities [PEPS
Units and a Remarketing Agreement providing for the Remarketing].
SECTION 4.2 Indemnification and Expenses of the Trustees.
To the fullest extent permitted by law, the Sponsor, in its
capacity as Senior Deferrable Notes Issuer, agrees to indemnify the Regular
Trustees, the Property Trustee and the Delaware Trustee for, and to hold each of
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Regular Trustees, the Property
Trustee or the Delaware Trustee, as the case may be, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending any of them against any
claim (whether asserted by the Sponsor, a Holder or any other Person) or
liability in connection with the exercise or performance of any of their
respective powers or duties hereunder. The provisions of this Section 4.2 shall
survive the resignation or removal of the Regular Trustees, the Delaware Trustee
or the Property Trustee and the termination of this Declaration.
ARTICLE 5: THE HOLDERS OF THE COMMON SECURITIES
SECTION 5.1 Senior Deferrable Notes Issuer's Purchase of the Common
Securities.
On the Closing Date, the Senior Deferrable Notes Issuer shall
purchase all of the Common Securities issued by the Trust, in an aggregate
liquidation amount equal to at least three percent of the total capital of the
Trust, at such time as the Preferred Securities are sold and issued. If any
additional Preferred Securities are issued pursuant to the exercise of any
Over-allotment Option, then the Senior Deferrable Notes Issuer shall purchase,
on the date of such issuance, an amount of additional Common Securities such
that the aggregate number of Common Securities held by the Senior Deferrable
Notes Issuer, upon such purchase, will equal at least three percent of the total
capital of the Trust.
The aggregate stated liquidation amount of the Common
Securities outstanding at any time shall not be less than three percent of the
total capital of the Trust.
SECTION 5.2 Covenants of the Senior Deferrable Notes Issuer.
For so long as the Preferred Securities remain outstanding,
the Senior Deferrable Notes Issuer shall covenant (i) to maintain, directly or
indirectly, 100% ownership of the Common Securities, (ii) to cause the Trust to
remain a statutory trust and not to voluntarily
31
dissolve, wind up, liquidate or be terminated, except as permitted by this
Declaration, (iii) to use its commercially reasonable efforts to ensure that the
Trust will not be an Investment Company required to be registered under the
Investment Company Act and (iv) not to take any action that would be reasonably
likely to cause the Trust to be classified as an association or a publicly
traded partnership taxable as a corporation for United States federal income tax
purposes.
SECTION 5.3 Holder of the Common Securities.
Each Holder of the Common Securities shall at all times hold
the Common Securities in its individual capacity on its own behalf and shall
not, in its capacity as a Holder of the Common Securities, be under (or subject
to) the control or direction of any Foreign Person (pursuant to a contractual
arrangement or otherwise) other than by virtue of such Foreign Person's direct
or indirect stock ownership, if any, of the Holder of Common Securities.
Notwithstanding anything in this Declaration to the contrary, each Holder of the
Common Securities shall at all times be a United States Person and shall be
authorized to give any direction hereunder with respect to the Trust as shall be
necessary for the Trust not to be considered a foreign trust for United States
Federal income tax purposes.
SECTION 5.4 Exchanges.
(a) If at any time the Senior Deferrable Notes Issuer or any of its
Affiliates (in either case, a "Issuer Affiliated Holder") is the Holder of any
Preferred Securities, such Issuer Affiliated Holder shall have the right to
deliver to the Property Trustee all or such portion of its Preferred Securities
as it elects and receive, in exchange therefor, Senior Deferrable Notes in an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accumulated and unpaid Distributions on, such Preferred
Securities. Such election (i) shall be exercisable effective on any Distribution
payment date by such Issuer Affiliated Holder delivering to the Property Trustee
a written notice of such election specifying the aggregate liquidation amount of
the Preferred Securities with respect to which such election is being made and
the Distribution payment date on which such exchange shall occur, which
Distribution payment date shall be not less than ten Business Days after the
date of receipt by the Property Trustee of such election notice and (ii) shall
be conditioned upon such Issuer Affiliated Holder having delivered or caused to
be delivered to the Property Trustee or its designee the Preferred Securities
which are the subject of such election by 10:00 A.M. New York time, on the
Distribution payment date on which such exchange is to occur. After the
exchange, such Preferred Securities will be canceled and will no longer be
deemed to be outstanding and all rights of the Senior Deferrable Notes Issuer or
its Affiliate(s) with respect to such Preferred Securities will cease.
(b) In the case of an exchange described in Section 5.4(a), the Trust
will, on the date of such exchange, exchange Senior Deferrable Notes having a
principal amount equal to a proportional amount of the aggregate liquidation
amount of the outstanding Common Securities based on the ratio of the aggregate
liquidation amount of the Preferred Securities exchanged pursuant to Section
5.4(a) divided by the aggregate liquidation amount of the Preferred Securities
outstanding immediately prior to such exchange, for such proportional amount of
Common Securities held by the Senior Deferrable Notes Issuer (which
contemporaneously shall be canceled and no longer be deemed to be outstanding);
provided, that the Senior Deferrable Notes
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Issuer delivers or causes to be delivered to the Property Trustee or its
designee the required amount of Common Securities to be exchanged by 10:00 A.M.,
New York City time, on the Distribution payment date on which such exchange is
to occur.
ARTICLE 6: THE TRUSTEES
SECTION 6.1 Number of Trustees.
The number of Trustees initially shall be five, and:
(a) at any time before the issuance of any Securities, the Sponsor may
increase or decrease the number of Trustees by written instrument; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of the Common Securities at a
meeting of the Holders of the Common Securities or by written consent without
prior notice in lieu of such meeting;
provided that the number of Trustees shall be at least three; and provided
further that: (i) the Delaware Trustee, in the case of a natural person, shall
be a person who is a resident of the State of Delaware or that, if not a natural
person, is an entity that has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law; (ii) at least a
majority of the Trustees shall be employees or officers of, or are affiliates
of, the Sponsor; (iii) one Trustee shall be the Property Trustee for so long as
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Property Trustee also may serve as Delaware Trustee if
it meets the applicable requirements; (iv) each Trustee shall be a United States
Person; and (v) each Trustee, or any delegee of, any Trustee, shall at all times
act as Trustee in its individual capacity on its own behalf and will not, at any
time, in its capacity as Trustee, be under (or subject to) the control or
direction of any Foreign Person (pursuant to a contractual arrangement or
otherwise).
SECTION 6.2 Delaware Trustee; Eligibility.
If required by the Statutory Trust Act, one Trustee (which may be the
Property Trustee) (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity that has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, provided that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee also shall be the Delaware Trustee and
Section 3.11 shall have no application.
SECTION 6.3 Property Trustee; Eligibility.
(a) There shall be at all times one Trustee (which may be the Delaware
Trustee) that shall act as Property Trustee that shall:
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(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation that is a United States Person organized
and doing business under the law of the United States of America or any
state or territory thereof or of the District of Columbia, or a
corporation or other Person that is a United States Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least fifty million
U.S. dollars ($50,000,000) and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then for the purpose of this Section 6.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 6.3(a), the Property Trustee immediately shall resign in
the manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holders of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall comply
in all respects with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Guarantee shall be deemed to be specifically described in this
Declaration for purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
SECTION 6.4 Qualifications of the Regular Trustees Generally.
Each Regular Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 6.5 Initial Regular Trustees.
The initial Regular Trustees shall be Jay D. Browning, Michael
S. Ciskowski, and Donna M. Titzman, the business address of all of whom is in
care of Valero Energy Corporation, One Valero Place, San Antonio, Texas 78212.
SECTION 6.6 Appointment, Removal and Resignation of the Trustees.
(a) Subject to Sections 6.6(b) and 7.5(k), the Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
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(ii) after the issuance of any Securities, by a vote of the
Holders of a Majority in Liquidation Amount of the Common Securities at
a meeting of the Holders of the Common Securities or by written consent
without prior notice in lieu of such meeting.
(b) The Property Trustee shall not be removed in accordance with
Section 6.6(a) or Section 7.5(k) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 6.3(a) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Delaware Trustee shall not be removed
in accordance with Section 6.6(a) or Section 7.5(k) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (a "Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until a successor
has been appointed, until death or dissolution or until removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by written instrument executed by such Trustee and delivered to the
Sponsor and the other Trustees, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided that:
(i) no such resignation of the Property Trustee shall be
effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by
written instrument executed by such Successor
Property Trustee and delivered to the Regular
Trustees, the Sponsor and the resigning Property
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the Holders of the Securities;
and
(ii) no such resignation of the Delaware Trustee shall be
effective until a Successor Delaware Trustee has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees, the
Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 6.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, has been appointed and accepted appointment as provided in this
Section 6.6 within 60 days after delivery of an instrument of resignation or
removal, the resigning or removed Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee, as applicable. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
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(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(g) In case of the appointment hereunder of a Successor Property
Trustee or a Successor Delaware Trustee, such Successor Property Trustee or
Successor Delaware Trustee so appointed shall execute, acknowledge and deliver
to the Trust and to the retiring Property Trustee or Delaware Trustee, as the
case may be, an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Property Trustee or Delaware Trustee
shall become effective and such Successor Property Trustee or Successor Delaware
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Property Trustee or
Delaware Trustee; but, on the request of the Sponsor or the Successor Property
Trustee or Successor Delaware Trustee, such retiring Property Trustee or
Delaware Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such Successor Property Trustee or Successor Delaware
Trustee all the rights, powers and trusts of the retiring Property Trustee or
Delaware Trustee, as the case may be, and if the Property Trustee is the
resigning Trustee, it shall duly assign, transfer and deliver to the Successor
Property Trustee all property and money held by such retiring Property Trustee
hereunder.
SECTION 6.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 6.1, or if the number of
Trustees is increased pursuant to Section 6.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 6.6.
SECTION 6.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul, dissolve or terminate the Trust nor to
terminate this Declaration. Whenever a vacancy in the number of Regular Trustees
shall occur until such vacancy is filled by the appointment of a Regular Trustee
in accordance with Section 6.6, the Regular Trustees in office, regardless of
the number, shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Declaration.
SECTION 6.9 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by
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overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided a Quorum is present, or without a
meeting and without prior notice by the unanimous written consent of the Regular
Trustees. In the event there is only one Regular Trustee, any and all action of
such Regular Trustee shall be evidenced by a written consent of such Regular
Trustee.
SECTION 6.10 Delegation of Power by the Regular Trustees.
(a) Any Regular Trustee may delegate to any natural person over the age
of 21 that is a United States Person, by power of attorney consistent with
applicable law, his, her or its power for the purpose of executing any documents
contemplated in Section 3.6.
(b) The Regular Trustees shall have the power to delegate from time to
time to such of their number or to officers of the Trust or any other Person the
doing of such things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
SECTION 6.11 Merger, Consolidation, Conversion or Succession to
Business.
Any entity into which the Property Trustee, the Delaware
Trustee or any Regular Trustee that is not a natural person may be merged or
converted or with such Trustee may be consolidated, or any entity resulting from
any merger, conversion or consolidation to which such Trustee is a party, or any
entity succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such entity otherwise is qualified and eligible
under this Article.
ARTICLE 7: TERMS OF THE SECURITIES
SECTION 7.1 General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue, on behalf of the Trust, one class
of preferred securities representing undivided beneficial interests in the
assets of the Trust (the "Preferred Securities") and one class of common
securities representing undivided beneficial interests in the assets of the
Trust (the "Common Securities").
(i) Preferred Securities. The Preferred Securities of the
Trust shall have an aggregate stated liquidation amount with respect to
the assets of the Trust of __________________ dollars ($____________)
[subject to increase to not more than
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________________________________________ dollars ($____________) in the
event of the exercise of any Over-allotment Option)] and a stated
liquidation amount with respect to the assets of the Trust of $__ per
Preferred Security. The Preferred Securities are hereby designated for
identification purposes only as the Preferred Securities. The Preferred
Security Certificates shall be substantially in the form of Exhibit A
hereto, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice.
(ii) Common Securities. The Common Securities of the Trust
shall have an aggregate liquidation amount with respect to the assets
of the Trust of _________________________________ dollars ($__________)
[(subject to increase to not more
_____________________________________________ dollars ($__________) in
the event of the exercise of any Over-allotment Option)] and a
liquidation amount with respect to the assets of the Trust of $____ per
Common Security. The Common Securities are hereby designated for
identification purposes only as the Common Securities. The Common
Security Certificates shall be substantially in the form of Exhibit B
hereto, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice.
(b) Payment of Distributions on, and any payment of the Redemption
Price upon a redemption of, the Preferred Securities and the Common Securities,
as applicable, shall be made Pro Rata based on the liquidation amount of such
Preferred Securities and Common Securities; provided that if on any date on
which amounts payable on distribution or redemption, an Indenture Event of
Default has occurred and is continuing, then such amounts payable shall not be
made on any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities shall be
made, until all accumulated and unpaid Distributions, or payments of the
Redemption Price, as the case may be, on all of the outstanding Preferred
Securities for which Distributions are to be paid or that have been called for
redemption, as the case may be, are fully paid. All funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price of, the Preferred Securities then due
and payable.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be validly issued, fully paid and non-assessable
beneficial ownership interests in the assets of the Trust.
(e) Every Person, by virtue of having become a Holder of Securities or
a Beneficial Owner of Preferred Securities in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration, the Guarantee, the Indenture[, the
Purchase Contract Agreement, the Pledge Agreement] and the Senior Deferrable
Notes.
(f) The Holders of the Securities shall not have any preemptive or
similar rights.
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(g) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual or facsimile signature of
any Regular Trustee. If a Regular Trustee of the Trust who has signed any of the
Certificates ceases to be a Regular Trustee before such signed Certificates have
been delivered by the Trust, such Certificates nevertheless may be delivered as
though the Person who signed such Certificates had not ceased to be a Regular
Trustee. Any Certificate may be signed on behalf of the Trust by such Persons
who, at the actual date of execution of such Certificate, shall be the Regular
Trustees of the Trust, although at the date of the execution and delivery of
this Declaration any such Person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation of any stock exchange on which the Securities may be
listed, or to conform to usage.
A Preferred Security Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the Property
Trustee. Such signature shall be conclusive evidence that such Preferred
Security Certificate has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Preferred Security
Certificates for original issue. The aggregate number of Preferred Securities
outstanding at any time (including the Over-allotment Option) shall not exceed
the liquidation amount set forth in Section 7.1(a)(i).
The Property Trustee may appoint an authenticating agent
acceptable to the Trust, as determined by the Regular Trustees on behalf of the
Trust, to authenticate Certificates. An authenticating agent may authenticate
Certificates whenever the Property Trustee may do so. Each reference in this
Declaration to authentication by the Property Trustee shall include
authentication by such agent. An authenticating agent shall have the same rights
as the Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(h) The Preferred Securities Certificates, upon original issuance
[(including Preferred Securities, if any, issued pursuant to the exercise of any
Over-allotment Option)], shall be issued as Global Securities in the form of one
or more fully registered global Preferred Security Certificates (each a "Global
Certificate"), to be delivered to The Depository Trust Company, the initial
Depositary, by or on behalf of the Trust. Such Global Certificates initially
shall be registered on the books and records of the Trust in the name of "Cede &
Co.," the nominee of the initial Depositary. No Beneficial Owner of Preferred
Securities shall receive a definitive Preferred Security Certificate
representing such Beneficial Owner's interests in such Global Certificates,
except as provided in Section 7.12. Unless and until definitive, fully
registered Preferred Security Certificates have been issued to the Beneficial
Owners of Preferred Securities pursuant to Section 7.12,
(i) the provisions of this Section 7.1 shall be in full force
and effect;
39
(ii) the Trust and the Trustees shall be entitled to deal with
the Depositary for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents thereunder) as the Holder of the Preferred
Securities and the sole Holder of the Global Certificates and, except
as set forth herein or in Rule 3a-7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) with
respect to the Property Trustee, shall have no obligation to the
Beneficial Owners of the Preferred Securities;
(iii) to the extent that the provisions of this Section 7.1
conflict with any other provisions of this Declaration, the provisions
of this Section 7.1 shall control; and
(iv) the rights of the Beneficial Owners of the Preferred
Securities shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such
Beneficial Owners and the Depositary and/or the Depositary
Participants. The Depositary shall make book-entry transfers among
Depositary Participants and receive and transmit Distributions on the
Global Certificates to such Depositary Participants; provided that
solely for the purposes of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter
provided for in this Declaration, so long as definitive Preferred
Security Certificates have not been issued, the Trustees may rely
conclusively on, and shall be fully protected in relying on, any
written instrument (including a proxy) delivered to the Trustees by the
Depositary setting forth the votes of the Beneficial Owners of the
Preferred Securities or assigning the right to vote on any matter to
any other Persons either in whole or in part.
Whenever a notice or other communication to the Holder of the
Preferred Securities is required to be given under this Declaration, unless and
until definitive Preferred Security Certificates have been issued pursuant to
Section 7.1(g), the Trustees shall deliver all such notices and communications
specified herein to be given to the Holders of the Preferred Securities to the
Depositary, and, with respect to any Preferred Security Certificate registered
in the name of a Depositary or the nominee of a Depositary, the Trustees may
conclusively rely on, and shall be fully protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Depositary
setting forth the votes of the Beneficial Owners of the Preferred Securities or
assigning the right to vote on any matter or any other Persons either in whole
or in part.
SECTION 7.2 Distributions.
(a) Holders of the Securities shall be entitled to receive
Distributions that shall accumulate and be payable at the rate per annum of ___%
of the stated liquidation amount of $___ per Security until _________, 200__,
[and at the Reset Rate thereafter]. The amount of Distributions payable for any
period shall be computed (i) for any full quarterly distribution period, on the
basis of a 360-day year of twelve 30-day months and (ii) for any period shorter
than a full quarterly distribution period, on the basis of a 30-day month and,
for any period of less than one month, on the basis of the actual number of days
elapsed per 30-day month. Subject to Section 7.1(b), Distributions shall be made
on the Securities on a Pro Rata basis. Distributions on the Securities shall
accumulate from _________, 200__, shall be cumulative and
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shall be payable quarterly, in arrears, on _________, ________, ________ and
__________ of each year, commencing __________, 200_, when, as and if available
for payment, by the Property Trustee, except as otherwise described below.
Distributions shall be payable only to the extent that payments are made to the
Trust in respect of the Senior Deferrable Notes held by the Property Trustee and
to the extent that the Trust has funds available for the payment of such
Distributions in the Property Account.
(b) Distributions not paid on the scheduled payment date shall
accumulate and compound quarterly at the rate of _____% per annum through and
including _________, 200__ [and at the Reset Rate thereafter] ("Compounded
Distributions"). "Distributions" shall mean ordinary cumulative distributions
together with any Compounded Distributions.
(c) If and to the extent that the Senior Deferrable Notes Issuer makes
a payment of principal of and any premium or interest on the Senior Deferrable
Notes held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a Pro Rata distribution of the
Payment Amount to Holders, subject to Section 7.1(b).
(d) Distributions on the Securities shall be payable to the Holders
thereof as they appear on the register of the Trust as of the close of business
on the relevant record dates. If the Preferred Securities are represented by one
or more Global Securities, the relevant record dates shall be the close of
business on the Business Day preceding such Distribution payment date, unless a
different regular record date is established or provided for the corresponding
interest payment date on the Senior Deferrable Notes. The relevant record dates
for the Common Securities shall be the same as for the Preferred Securities. If
the Preferred Securities are not represented by one or more Global Securities,
the relevant record dates for the Preferred Securities shall be selected by the
Regular Trustees and shall be the fifteenth Business Day prior to the relevant
Distribution payment dates. At all times, the Distribution payment dates shall
correspond to the interest payment dates on the Senior Deferrable Notes.
Distributions payable on any Securities that are not punctually paid on any
Distribution payment date, as a result of the Senior Deferrable Notes Issuer
having failed to make a payment under the Senior Deferrable Notes, shall cease
to be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution instead shall be payable
to the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with this Declaration. If
any date on which Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date shall be made on the
next day that is a Business Day (and without any interest or other payment in
respect of any such delay), except that if such Business Day is in the next
calendar year, such payment shall be made on the preceding Business Day, with
the same force and effect as if made on such payment date.
(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 Securities, subject to Section
7.1(b).
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SECTION 7.3 Redemption of Securities.
(a) Upon the repayment or redemption, in whole or in part, of the
Senior Deferrable Notes held by the Trust, whether at the stated maturity of the
Senior Deferrable Notes or upon earlier redemption as provided in the Indenture,
the proceeds from such repayment or redemption shall be simultaneously applied
Pro Rata (subject to Section 7.1(b)) to redeem Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Senior
Deferrable Notes so repaid or redeemed at the Redemption Price. Holders of the
Securities shall be given not less than 30 nor more than 60 days notice of such
redemption in accordance with Section 7.4.
(b) If the Senior Deferrable Notes Issuer redeems the Senior Deferrable
Notes upon the occurrence and continuance of a Tax Event, the proceeds from such
redemption shall be applied by the Property Trustee to redeem the Securities in
whole (but not in part) at a redemption price per Security equal to $____ [the
Redemption Amount] plus any accumulated and unpaid Distributions thereon to the
Tax Event Redemption Date. If, following the occurrence of a Tax Event, the
Senior Deferrable Notes Issuer exercises its option to redeem the Senior
Deferrable Notes, [the Senior Deferrable Notes Issuer shall appoint the
Quotation Agent; if a Tax Event Redemption occurs prior to the Purchase Contract
Settlement Date, the redemption price payable in liquidation of the Securities
will be distributed to ______________________, acting as the securities
intermediary under the Pledge Agreement, which in turn will apply that amount to
purchase the Treasury Portfolio and remit the remaining portion, if any, of such
price to ____________________, acting as the purchase contract agent under the
Purchase Contract Agreement, for payment to the Holders of the Securities. If a
Tax Event Redemption occurs after the Purchase Contract Settlement Date, the
Treasury Portfolio shall not be purchased and] the Property Trustee shall
distribute to the Holders of the Securities on the Tax Event Redemption Date the
Redemption Price payable in liquidation of such Holders' interests in the assets
of the Trust.
SECTION 7.4 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of Senior
Deferrable Notes in exchange for, the Securities (a "Redemption/Distribution
Notice"), which notice shall be irrevocable, shall be given by the Trust by mail
to each Holder of Securities to be redeemed or exchanged at least 30 but no more
than 60 days before the date fixed for redemption or exchange thereof which, in
the case of a redemption, shall be the date fixed for redemption of the Senior
Deferrable Notes. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
7.4(a), a Redemption/Distribution Notice shall be deemed to be given on the day
such notice is first mailed by first-class mail, postage prepaid, to the Holders
of the Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of the Securities at the address of each such Holder appearing in the
register of the Trust. All notices of redemption shall state:
(i) the date fixed for redemption;
(ii) the Redemption Price;
(iii) the applicable CUSIP number;
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(iv) if less than all of the outstanding Securities are to be
redeemed, the identification and amount of the particular Trust
securities to be redeemed;
(v) that on the date fixed for redemption the Redemption Price
will become due and payable upon each Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
No defect in the Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity of the redemption
or exchange proceedings with respect to any other Holder.
(b) Subject to the Trust's fulfillment of the notice requirements set
forth in Section 7.4(a), if Securities are to be redeemed, then (provided that
the Senior Deferrable Notes Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of the
Senior Deferrable Notes) (i) with respect to the Preferred Securities
represented by one or more Global Securities, by 12:00 noon, New York City time,
on the redemption date, the Property Trustee will deposit irrevocably with the
Depositary or its nominee funds sufficient to pay the applicable Redemption
Price, and the Property Trustee shall give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the Beneficial Owners
of the Preferred Securities, and (ii) with respect to Securities not represented
by one or more Global Securities, the Property Trustee shall pay the applicable
Redemption Price to the Holders of such Securities by check mailed to the
address of each Holder appearing on the register of the Trust on the redemption
date. If any date fixed for redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date shall be made on the next
Business Day (without any interest thereon), except that if such Business Day
falls in the next calendar year, such payment shall be made on the preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. [Notwithstanding the foregoing, so long as the Holder
of any Preferred Securities is the Collateral Agent or the Purchase Contract
Agent, the payment of the Redemption Price in respect of the Preferred
Securities held by the Collateral Agent or the Purchase Contract Agent shall be
made no later than 12:00 noon, New York City time, on the redemption date by
check or wire transfer in immediately available funds at such place and to such
account as may be designated by the Collateral Agent or the Purchase Contract
Agent.] If payment of the Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the Trust or by the
Sponsor as guarantor pursuant to the Guarantee, then Distributions on such
Securities shall continue to accumulate at the then applicable rate, from the
original redemption date to the actual date of payment, in which case the actual
payment date shall be the date fixed for redemption for purposes of calculating
the Redemption Price. For these purposes, the applicable Redemption Price shall
not include Distributions that are being paid to Holders of Securities who were
not Holders of Securities on a relevant record date. If a
Redemption/Distribution Notice has been given and funds have been deposited or
paid as required, then immediately prior to the close of business on the date of
such deposit or payment, Distributions will cease to accumulate on the
Securities called for redemption, and all rights of Holders of such Securities
so called for redemption shall cease, except the right of the Holders of such
Securities to receive the
43
Redemption Price, but without interest on such Redemption Price, and from and
after the date fixed for redemption, such Securities will cease to be
outstanding.
Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities that have
been called for redemption, except for the unredeemed portion of any Securities
being redeemed in part.
(c) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Senior Deferrable Notes
Issuer or its Affiliates may purchase, at any time and from time to time,
outstanding Preferred Securities by tender, in the open market, by private
agreement or otherwise.
SECTION 7.5 Voting Rights of the Preferred Securities.
(a) Except as provided under this Section 7.5 and Section 11.1 and as
otherwise required by the Statutory Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Preferred Securities shall have no voting
rights.
(b) Subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in Section 7.5(d), the Holders of a
Majority in Liquidation Amount of the Preferred Securities, voting separately as
a class, shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee, or to direct
the exercise of any trust or power conferred upon the Property Trustee under
this Declaration, including the right to direct the Property Trustee, as Holder
of the Senior Deferrable Notes, to (i) exercise the remedies available to it
under the Indenture, (ii) consent to any amendment or modification of the
Indenture or the Senior Deferrable Notes where such consent is required or (iii)
waive any past default and its consequences that are waivable under the
Indenture; provided that if an Indenture Event of Default has occurred and is
continuing, then the Holders of 25% of the aggregate stated liquidation amount
of the Preferred Securities may direct the Property Trustee to declare the
principal of and interest on the Senior Deferrable Notes due and payable;
provided further that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Senior Deferrable Notes affected thereby, the
Property Trustee only may give such consent or take such action at the direction
of the Holders of at least the same proportion in aggregate stated liquidation
amount of the Preferred Securities; and provided further, however, that (subject
to the provisions of Section 3.09) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee, being advised by
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Property Trustee, in good faith, by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees,
and/or Responsible Officers, shall determine that the action or proceeding so
directed would involve the Property Trustee in personal liability.
(c) If the Property Trustee fails to enforce its rights under the
Senior Deferrable Notes after a Holder of Preferred Securities has made a
written request, such Holder of Preferred Securities may institute, to the
fullest extent permitted by law, a legal proceeding directly against the Senior
Deferrable Notes Issuer to enforce the Property Trustee's rights under the
Indenture without first instituting any legal proceeding against the Property
Trustee or any other Person.
44
In addition, if a Trust Enforcement Event has occurred and is continuing and
such event is attributable to the failure of the Senior Deferrable Notes Issuer
to make any interest, principal or other required payments when due under the
Indenture, then a Holder of Preferred Securities may institute a Direct Action
against the Senior Deferrable Notes Issuer on or after the respective due date
specified in the Senior Deferrable Notes. In connection with such Direct Action,
the Senior Deferrable Notes Issuer will be subrogated to the rights of such
Holder of Preferred Securities to the extent of any payment made by the Senior
Deferrable Notes Issuer to such Holders of Preferred Securities in such Direct
Action.
(d) The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of any Indenture Event of Default received from the
Senior Deferrable Notes Issuer with respect to the Senior Deferrable Notes. Such
notice shall state that such Indenture Event of Default also constitutes a Trust
Enforcement Event. Except with respect to directing the time, method, and place
of conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clauses (i) and (ii) of
Section 7.5(b) above, unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes as a
result of such action, and that each Holder of Preferred Securities shall be
treated as owning an undivided beneficial ownership interest in the Senior
Deferrable Notes.
(e) If the consent of the Property Trustee, as the Holder of the Senior
Deferrable Notes, is required under the Indenture with respect to any amendment
or modification of the Indenture, the Property Trustee shall request the
direction of the Holders of the Securities with respect to such amendment or
modification and shall vote with respect to such amendment or modification as
directed by a Majority in Liquidation Amount of the Securities voting together
as a single class; provided that where a consent under the Indenture would
require the consent of the Holders of more than a majority of the aggregate
principal amount of the Senior Deferrable Notes, the Property Trustee only may
give such consent at the direction of the Holders of at least the same
proportion in aggregate stated liquidation amount of the Securities. The
Property Trustee shall not take any such action in accordance with the
directions of the Holders of the Securities unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that the Trust will
not be classified as other than a grantor trust for United States federal income
tax purposes as a result of such action, and that each Holder will be treated as
owning an undivided beneficial ownership interest in the Senior Deferrable
Notes.
(f) A waiver of an Indenture Event of Default with respect to the
Senior Deferrable Notes shall constitute a waiver of the corresponding Trust
Enforcement Event.
(g) Any required approval or direction of the Holders of the Preferred
Securities may be given at a separate meeting of the Holders of the Preferred
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which Holders of the Preferred
Securities are entitled to vote to be mailed to each Holder of record of
Preferred Securities. Each such notice shall include a statement setting forth:
(i) the date of such meeting; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote; and (iii)
instructions for the delivery of proxies.
45
(h) No vote or consent of the Holders of the Preferred Securities shall
be required for the Trust to redeem and cancel the Preferred Securities or
distribute the Senior Deferrable Notes in accordance with this Declaration and
the terms of the Securities.
(i) Notwithstanding that the Holders of the Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned at such time by the Senior Deferrable
Notes Issuer the Trustees or any entity directly or indirectly controlled by, or
under direct or indirect common control with, the Senior Deferrable Notes Issuer
or any Trustee shall not be entitled to vote or consent and shall be treated,
for purposes of such vote or consent, as if such Preferred Securities were not
outstanding.
(j) Except as provided under Section 7.5(k), the Holders of the
Preferred Securities shall have no rights to appoint or remove the Trustees,
who, subject to Section 6.6, may be appointed, removed or replaced by the
Holders of the Common Securities.
(k) If an Indenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed and replaced,
subject to Section 6.6(b), at such time by a Majority in Liquidation Amount of
the Preferred Securities.
SECTION 7.6 Voting Rights of the Common Securities.
(a) Except as provided under Section 6.1(b), this Section 7.6 and
Section 11.1 and as otherwise required by the Statutory Trust Act, the Trust
Indenture Act or other applicable law or provided by this Declaration, the
Holders of the Common Securities shall have no voting rights.
(b) Subject to Section 7.5(k), the Holders of the Common Securities
shall be entitled to vote to appoint, remove or replace any Trustee or to
increase or decrease the number of Trustees in accordance with Article 6.
(c) Subject to Section 2.6 and only after all Trust Enforcement Events
with respect to the Preferred Securities have been cured, waived, or otherwise
eliminated and subject to the requirement of the Property Trustee obtaining a
tax opinion in certain circumstances set forth in this paragraph (c), the
Holders of the Common Securities shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Property
Trustee, or to direct the exercise of any trust or power conferred upon the
Property Trustee under this Declaration, including the right to direct the
Property Trustee, as Holder of the Senior Deferrable Notes, to (i) exercise the
remedies available to it under the Indenture, (ii) consent to any amendment or
modification of the Indenture or the Senior Deferrable Notes where such consent
is required or (iii) waive any past default and its consequences that are
waivable under the Indenture; provided that where a consent or action under the
Indenture would require the consent or act of the Holders of more than a
majority of the aggregate principal amount of Senior Deferrable Notes affected
thereby, only the Holders of at least the same proportion of the aggregate
stated liquidation amount of the Common Securities may direct the Property
Trustee to give such consent or take such action. Except with respect to
directing the time, method, and place of conducting a proceeding for a remedy,
the Property Trustee shall be under no obligation to take any of the actions
described in clause 7.6(c)(i) and (ii) above unless the Property Trustee has
obtained an opinion of independent tax counsel to the effect that, as a result
of such action,
46
for United States federal income tax purposes the Trust will not fail to be
classified as a grantor trust and each Holder will be treated as owning an
undivided beneficial ownership interest in the Senior Deferrable Notes.
(d) If the Property Trustee fails to enforce its rights under the
Senior Deferrable Notes after the Holders of the Common Securities have made a
written request, the Holders of the Common Securities may institute, to the
fullest extent permitted by law, a legal proceeding directly against the Senior
Deferrable Notes Issuer to enforce the Property Trustee's rights under the
Senior Deferrable Notes without first instituting any legal proceeding against
the Property Trustee or any other Person.
(e) A waiver of an Indenture Event of Default with respect to the
Senior Deferrable Notes shall constitute a waiver of the corresponding Trust
Enforcement Event.
(f) Any required approval or direction of the Holders of the Common
Securities may be given at a separate meeting of the Holders of the Common
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities or pursuant to written consent without prior notice. The Regular
Trustees shall cause a notice of any meeting at which the Holders of the Common
Securities are entitled to vote to be mailed to the Holders of the Common
Securities. Such notice shall include a statement setting forth: (i) the date of
such meeting; (ii) a description of any resolution proposed for adoption at such
meeting on which the Holders of the Common Securities are entitled to vote; and
(iii) instructions for the delivery of proxies.
(g) No vote or consent of the Holders of the Common Securities shall be
required for the Trust to redeem and cancel the Common Securities or to
distribute Senior Deferrable Notes in accordance with this Declaration and the
terms of the Securities.
SECTION 7.7 Certificate Paying Agent.
If any Preferred Securities are not represented by one or more
Global Securities, the Trust shall maintain in the Borough of Manhattan, New
York City, State of New York, an office or agency where the Preferred Securities
may be presented for payment ("Certificate Paying Agent"). The Regular Trustees
shall appoint the Certificate Paying Agent (which shall be a bank or trust
company acceptable to the Senior Deferrable Notes Issuer) and may appoint one or
more additional paying agents in such other locations as they shall determine.
The term "Certificate Paying Agent" includes any additional paying agent. The
Regular Trustees may change any Certificate Paying Agent without prior notice to
the Holders of the Securities. The Regular Trustees shall notify the Property
Trustee of the name and address of any Certificate Paying Agent not a party to
this Declaration. If the Regular Trustees, on behalf of the Trust, fail to
appoint or maintain another entity as Certificate Paying Agent, the Property
Trustee shall act as such. The Certificate Paying Agent shall be permitted to
resign as Certificate Paying Agent upon 30 days' written notice to the Property
Trustee and the Senior Deferrable Notes Issuer.
SECTION 7.8 Listing.
The Sponsor shall use its best efforts to cause the Preferred
Securities [PEPS Units] to be listed and maintained as listed for quotation on
the New York Stock Exchange.
47
SECTION 7.9 Transfer of the Securities.
(a) (i) [The Preferred Securities initially shall be pledged, pursuant
to the terms of the Pledge Agreement, as collateral to secure the obligations of
the Holders of PEPS Units to purchase common shares of the Company in accordance
with the terms of the Purchase Contract Agreement.]
[(ii)] The Preferred Securities may be transferred, in whole or in
part, only in accordance with the terms and conditions set forth in this
Declaration [and pursuant to the Pledge Agreement]. To the fullest extent
permitted by law, any transfer or purported transfer of any Preferred Security
not made in accordance with this Declaration shall be null and void.
[(iii)] Subject to this Section 7.9 and Section 7.12, the Preferred
Securities shall be freely transferable.
[(iv)] The Trust shall cause to be kept at the Corporate Trust Office a
register in which, subject to such reasonable regulations as it may prescribe,
the Trust shall provide for the registration of Preferred Securities and of
transfers of Preferred Securities. The Property Trustee is hereby appointed
"Security Registrar" for the purpose of registering Preferred Securities and
transfers of Preferred Securities as herein provided.
[(v)] Upon surrender for registration of transfer of any Preferred
Securities at an office or agency of the Trust designated for such purpose, a
Regular Trustee shall execute, and the Property Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Preferred Securities of any authorized denominations and of a like aggregate
principal amount.
[(vi)] At the option of the Holder, Securities may be exchanged for
other Preferred Securities of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Preferred Securities to be
exchanged at such office or agency. Whenever any Preferred Securities are so
surrendered for exchange, a Regular Trustee shall execute, and the Property
Trustee shall authenticate and deliver, the Preferred Securities that the Holder
making the exchange is entitled to receive.
[(vii)] If so required by the Trust or the Property Trustee, every
Preferred Security presented or surrendered for registration of transfer or for
exchange shall be duly endorsed, or accompanied by a duly executed written
instrument of transfer in form satisfactory to the Trust and the Security
Registrar, by the Holder thereof or his attorney duly authorized in writing.
[(viii)] No service charge shall be made for any registration of
transfer or exchange of Preferred Securities, but the Trust may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Preferred
Securities.
(b) The Senior Deferrable Notes Issuer may not transfer the Common
Securities except in connection with the transactions permitted under Section
801 of the Indenture; provided, that
48
each Holder of the Common Securities shall at all times be a United States
Person. To the fullest extent permitted by law, any attempted transfer of the
Common Securities other than as set forth in this Section 7.9(b) shall be null
and void.
SECTION 7.10 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates are surrendered to the Regular Trustees,
or if the Regular Trustees receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them and the Property
Trustee harmless, then, in the absence of notice that such Certificate has been
acquired by a bona fide purchaser, any Regular Trustee shall execute and the
Property Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 7.10, the Regular Trustees 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 Certificate issued pursuant to this Section
7.10 shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate is found at any time.
SECTION 7.11 Deemed Holders.
The Trustees may treat the Person in whose name any
Certificate is registered on the register of the Trust as the sole holder of
such Certificate and of the Securities represented thereby for purposes of
receiving Distributions and for all other purposes whatsoever. Accordingly, the
Trustees shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust has actual or
other notice thereof.
SECTION 7.12 Global Securities.
The Preferred Securities initially shall be issued in the form
of one or more Global Securities. A Regular Trustee on behalf of the Trust shall
execute, and the Property Trustee shall authenticate and deliver, one or more
Global Securities that (i) shall represent and be denominated in an amount equal
to the aggregate stated liquidation amount of all of the Preferred Securities to
be issued in the form of Global Securities and not yet canceled, (ii) shall be
registered in the name of the Depositary for the Preferred Securities or the
nominee of such Depositary and (iii) shall be delivered by the Property Trustee
to such Depositary or pursuant to such Depositary's instructions. Global
Securities shall bear a legend substantially to the following effect:
"This Preferred Security is a Global Security within the
meaning of the Declaration and is registered in the name of
The Depository
49
Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Preferred Security is
exchangeable for Preferred Securities registered in the name
of a person other than the Depositary or its nominee only in
the limited circumstances described in the Declaration, and no
transfer of this Preferred Security (other than a transfer of
this Preferred Security as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be
reregistered except in limited circumstances.
Unless this certificate is presented by an authorized
representative of the Depositary to VEC Trust III or its agent
for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative
of the Depositary (and any payment hereon is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of the Depositary), and except as otherwise
provided in the Amended and Restated Declaration of VEC Trust
III dated as of ________, 200__, as amended from time to time,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON [(OTHER THAN PURSUANT TO THE
PLEDGE AGREEMENT)] IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein."
Preferred Securities not represented by a Global Security issued in
exchange for all or a part of a Global Security pursuant to this Section 7.12
shall be registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Property Trustee. Upon execution and
authentication, the Property Trustee shall deliver any Preferred Securities not
represented by a Global Security to the Persons in whose names such definitive
Preferred Securities are so registered.
At such time as all interests in Global Securities have been redeemed,
repurchased or canceled, such Global Securities shall be canceled, upon receipt
thereof, by the Property Trustee in accordance with standing procedures of the
Depositary. At any time prior to such cancellation, if any interest in a Global
Security is exchanged for Preferred Securities not represented by a Global
Security, redeemed, canceled or transferred to a transferee who receives
Preferred Securities not represented by a Global Security, or if any Preferred
Security not represented by a Global Security is exchanged or transferred for
part of a Global Security, then, in accordance with the standing procedures of
the Depositary, the liquidation amount of such Global Security shall be reduced
or increased, as the case may be, and an endorsement shall be made on such
Global Security by the Property Trustee to reflect such reduction or increase.
The Trust and the Property Trustee, as the authorized representative of
the Holders of the Preferred Securities, may deal with the Depositary for all
purposes of this Declaration, including
50
the making of payments due on the Preferred Securities and exercising the rights
of Holders of the Preferred Securities hereunder. The rights of any Beneficial
Owner shall be limited to those established by law and agreements between such
owners and Depository Participants; provided that no such agreement shall give
to any Person any rights against the Trust or the Property Trustee without the
written consent of the parties so affected. Multiple requests and directions
from and votes of the Depositary as the Holder of the Preferred Securities
represented by Global Securities with respect to any particular matter shall not
be deemed inconsistent to the extent they do not represent an amount of
Preferred Securities in excess of those held in the name of the Depositary or
its nominee.
If at any time the Depositary notifies the Trust that it is unwilling
or unable to continue as Depositary for the Preferred Securities or if at any
time the Depositary no longer is eligible under this Section 7.12, the Regular
Trustees shall appoint a successor Depositary with respect to the Preferred
Securities. If a successor Depositary is not appointed by the Trust within 90
days after the Trust receives such notice or becomes aware of such
ineligibility, the Trust's election that the Preferred Securities be represented
by one or more Global Securities shall no longer be effective, and a Regular
Trustee shall execute, and the Property Trustee will authenticate and deliver,
Preferred Securities in definitive registered form, in any authorized
denominations, in an aggregate stated liquidation amount equal to the aggregate
stated liquidation amount of the Global Securities representing the Preferred
Securities in exchange for such Global Securities.
A Regular Trustee on behalf of the Trust at any time and in its sole
discretion may determine that the Preferred Securities issued in the form of one
or more Global Securities shall no longer be represented by Global Securities.
In such event a Regular Trustee on behalf of the Trust shall execute, and the
Property Trustee shall authenticate and deliver, Preferred Securities in
definitive registered form, in any authorized denominations, in an aggregate
stated liquidation amount equal to the aggregate stated liquidation amount of
the Global Securities representing the Preferred Securities, in exchange for
such Global Securities.
Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.9), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Interests of Beneficial Owners may be transferred or exchanged for
Preferred Securities not represented by a Global Security, and Preferred
Securities not represented by a Global Security may be transferred or exchanged
for a Global Security or Securities, in accordance with rules of the Depositary
and the provisions of Section 7.9.
[SECTION 7.13 Remarketing.]
[(a) So long as the Preferred Securities, the PEPS Units and the
Treasury Securities are evidenced by one or more global certificates held by the
Depositary, the Senior Deferrable Notes Issuer shall request, not later than 15
nor more than 30 calendar days prior to the Remarketing Date, that the
Depositary notify the Holders of the Preferred Securities and the
51
holders of PEPS Units and the Treasury PEPS Units of the Remarketing and of the
procedures that must be followed if a Holder of Preferred Securities wishes to
make a Cash Settlement.]
[(b) Not later than 5:00 P.M., New York City time, on the seventh
Business Day preceding ___________, 200__, each Holder of Preferred Securities
may elect to have the Preferred Securities held by such Holder remarketed in the
Remarketing. Under Section 5.02 of the Purchase Contract Agreement, holders of
PEPS Units that do not give notice of their intention to make a Cash Settlement
of the Purchase Contract component of their PEPS Units prior to such time in the
manner specified in such Section, or have given such notice but fail to deliver
cash prior to 11:00 A.M., New York City time, on or prior to the fifth Business
Day preceding __________, 200__, shall be deemed to have consented to the
disposition of the Preferred Securities comprising a component of their PEPS
Units in the Remarketing. Holders of the Preferred Securities that are not a
component of PEPS Units wishing to elect to have their Preferred Securities
remarketed shall give to the Property Trustee notice of their election prior to
11:00 A.M., New York City time on the fifth Business Day prior to ___________,
200__. Any such notice shall be irrevocable and may not be conditioned upon the
level at which the Reset Rate is established in the Remarketing. Promptly after
11:00 A.M., New York City time, on such fifth Business Day, the Property
Trustee, based on the notices received by it prior to such time (including
notices from the Purchase Contract Agent as to Purchase Contracts for which Cash
Settlement has been elected and cash received), shall notify the Trust, the
Sponsor and the Remarketing Agent of the number of Preferred Securities to be
tendered for purchase in the Remarketing.]
[(c) If any Holder of PEPS Units does not give a notice of its
intention to make a Cash Settlement or gives such notice but fails to deliver
cash as described in Section 7.13(b), or gives a notice of election to have
Preferred Securities that are not a component of PEPS Units remarketed, then the
Preferred Securities of such Holder shall be deemed tendered for purchase in the
Remarketing, notwithstanding any failure by such Holder to deliver or properly
deliver such Preferred Securities to the Remarketing Agent for purchase.]
[(d) The right of each Holder to have Preferred Securities tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) the
Remarketing Agent is able to find a purchaser or purchasers for the tendered
Preferred Securities and (iii) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agent.
[(e) On the Remarketing Date, the Remarketing Agent shall use
commercially reasonable efforts to remarket, at a price equal to 100.25% of the
aggregate stated liquidation amount thereof, the Preferred Securities tendered
or deemed tendered for purchase.]
[(f) If, as a result of the efforts described in 7.13(e), the
Remarketing Agent has determined that it will not be able to remarket all of the
Preferred Securities tendered or deemed tendered for purchase at a price of
100.25% of the aggregate stated liquidation amount of such Preferred Securities,
the Remarketing Agent shall determine the Reset Rate, which shall be the rate
per annum (rounded to the nearest one-thousandth (0.001) of one percent per
annum), adjusted up or down, sufficient to cause the then current aggregate
market value of the Preferred Securities to be equal to 100.25% of the aggregate
stated liquidation amount of such Preferred
52
Securities, that the Remarketing Agent determines, in its sole reasonable
judgment, to be the lowest rate per annum that will enable it to remarket all of
the Preferred Securities tendered or deemed tendered for Remarketing.]
[(g) If none of the Holders of the Preferred Securities or the holders
of the PEPS Units elect to have Preferred Securities remarketed in the
Remarketing, the Reset Rate shall be the rate determined by the Remarketing
Agent, in its sole reasonable discretion, as the rate that would have been
established had a Remarketing been held on the Remarketing Date.]
[(h) If, by 4:00 P.M., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Preferred Securities tendered
'or deemed tendered for purchase, a failed Remarketing ("Failed Remarketing")
shall be deemed to have occurred and the Remarketing Agent shall so advise by
telephone the Depositary, the Property Trustee, the Trust and the Sponsor. In
the event of a Failed Remarketing, the Reset Rate shall equal the Two-Year
Benchmark Treasury Rate plus the Applicable Margin.]
[(i) By approximately 4:30 P.M., New York City time, on the Remarketing
Date provided that there has not been a Failed Remarketing, the Remarketing
Agent shall advise, by telephone (i) the Depositary, the Property Trustee, the
Trust and the Sponsor of the Reset Rate determined in the Remarketing and the
number of Preferred Securities sold in the Remarketing, (ii) each purchaser (or
the Depositary Participant thereof) purchasing Preferred Securities sold in the
Remarketing of the Reset Rate and the number of Preferred Securities such
purchaser is to purchase and (iii) each purchaser to give instructions to its
Depositary Participant to pay the purchase price on the Purchase Contract
Settlement Date in same day funds against delivery of the Preferred Securities
purchased through the facilities of the Depositary.]
[(j) In accordance with the Depositary's normal procedures, on the
Remarketing Settlement Date, the transactions described above with respect to
each Preferred Security tendered for purchase and sold in the Remarketing shall
be executed through the Depositary, and the accounts of the respective
Depositary Participants shall be debited and credited and such Preferred
Securities delivered by book-entry as necessary to effect purchases and sales of
such Preferred Securities. The Depositary shall make payment in accordance with
its normal procedures.]
[(k) If any Holder of the Preferred Securities selling Preferred
Securities in the Remarketing fails to deliver such Preferred Securities, the
Depositary Participant of such selling Holder and of any other Person that was
to have purchased Preferred Securities in the Remarketing may deliver to any
such other Person a number of Preferred Securities that is less than the number
of Preferred Securities that otherwise was to be purchased by such Person. In
such event, the number of Preferred Securities to be so delivered shall be
determined by such Depositary Participant, and delivery of such lesser number of
Preferred Securities shall constitute good delivery.]
[(l) The Remarketing Agent is not obligated to purchase any Preferred
Securities that otherwise would remain unsold in the Remarketing. None of the
Trust, any Trustee, the Sponsor or the Remarketing Agent shall be obligated in
any case to provide funds to make payment upon tender of the Preferred
Securities for Remarketing.]
53
[(m) Under the Remarketing Agreement, the Sponsor, in its capacity as
Senior Deferrable Notes Issuer, shall be liable for, and shall pay, any and all
costs and expenses incurred in connection with the Remarketing, and the Trust
shall not have any liabilities for such costs and expenses; provided, however,
that for the performance of its services, the Remarketing Agent will retain from
the proceeds of the Remarketing an amount equal to 0.25% of the aggregate stated
liquidation amount of all remarketed Preferred Securities.]
[(n) The tender and settlement procedures set in this Section 7.13,
including provisions for payment by purchasers of the Preferred Securities in
the Remarketing, shall be subject to modification to the extent required by the
Depositary or if the book-entry system is no longer available for the Preferred
Securities at the time of the Remarketing, to facilitate the tendering and
remarketing of the Preferred Securities in certificated form. In addition, the
Remarketing Agent may modify the settlement procedures set forth herein in order
to facilitate the settlement process.]
ARTICLE 8: DISSOLUTION AND TERMINATION OF THE TRUST
SECTION 8.1 Dissolution and Termination of the Trust.
(a) The Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Senior Deferrable Notes Issuer;
(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) the time when all of the Securities shall have been
called for redemption and the amounts then due shall have been paid to
the Holders of the Securities;
(v) the direction by the Property Trustee, following the
occurrence and continuation of a Tax Event pursuant to which the Trust
is to be dissolved and all of the Senior Deferrable Notes distributed
to the Holders of the Securities in exchange for all of the Securities;
(vi) at the Sponsor's sole discretion, by notice and direction
to the Property Trustee to distribute the Senior Deferrable Notes to
the Holders of the Securities in exchange for all of the Securities;
provided that the Sponsor will be required to obtain an opinion of
counsel that the distribution of the Senior Deferrable Notes will not
be taxable to the holders of the Preferred Securities for United States
federal income tax purposes; or
(vii) the time when all of the Regular Trustees and the
Sponsor have consented to dissolution of the Trust, provided such
action is taken before the issuance of any Securities.
54
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a) and upon completion of the winding up and liquidation of
the Trust, the Regular Trustees shall terminate the Trust by executing and
filing a certificate of cancellation with the Secretary of State of the State of
Delaware.
(c) The provisions of Section 4.2 and Article 9 shall survive the
termination of the Trust.
SECTION 8.2 Liquidation Distribution Upon Dissolution of the Trust.
(a) In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the Trust (each a "Liquidation") based on the
occurrence of an event specified in Section 8.1(a) (other than clauses (iv) or
(v)), the Holders of the Securities on the date of the Liquidation shall be
entitled to receive on a Pro Rata basis, after satisfaction of the Trust's
liabilities to creditors, Senior Deferrable Notes in an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accumulated and unpaid Distributions on, such Securities in exchange
for such Securities[; provided if the Liquidation occurs prior to the Purchase
Contract Settlement Date, the Senior Deferrable Notes receivable by the Holders
shall be transferred to the Collateral Agent].
(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 date of the Liquidation to each Holder of Securities at such
Holder's address appearing in the Securities register. All notices of
Liquidation shall:
(i) state the date of the Liquidation;
(ii) state that from and after the date of the Liquidation,
the Securities will no longer be deemed to be outstanding and any
Certificates not surrendered for exchange will be deemed to represent
the Senior Deferrable Notes in a principal amount equal to the stated
liquidation amount of the Securities, bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distribution
on the Securities; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Certificates for Senior Deferrable Notes,
or if Section 8.2(d) applies receive a distribution, as the Property
Trustee shall deem appropriate.
(c) Except where Section 8.1(a)(iv) or (v) or Section 8.2(d) applies,
in order to effect the liquidation of the Trust and distribution of the Notes to
Holders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the date of the
Liquidation) 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 Senior Deferrable Notes in
exchange for the outstanding Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 8.2, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Senior Deferrable Notes
in the manner provided herein is determined by the Property Trustee not to be
practical, the property of the Trust shall be liquidated, and the Trust
55
shall be wound-up and terminated, by the Property Trustee in such manner as the
Property Trustee reasonably determines. In such event, the Holders of the
Securities on the date of the Liquidation shall be entitled to receive, out of
the assets of the Trust available for distribution to the Holders of the
Securities after satisfaction of the Trust's liabilities to creditors, if any,
cash or other immediately available funds in an amount equal to the aggregate of
the stated liquidation amount of $__ per Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution")[; provided if the Liquidation occurs prior to the Purchase
Contract Settlement Date, the Redemption Price payable to the Collateral Agent,
in liquidation of the Holders' interests in the Preferred Securities, will be
distributed to the Collateral Agent, which in turn will apply an amount equal to
the Redemption Amount of such Redemption Price to purchase the Treasury
Portfolio on behalf of the Holders of the Securities and remit the remaining
portion, if any, of such Redemption Price to the Purchase Contract Agent for
payment to the Holders]. If, upon any such Liquidation, the Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay the aggregate Liquidation Distribution in full, then the
amounts payable directly by the Trust on the Securities shall be paid on a Pro
Rata basis. The Holders of the Common Securities shall be entitled to receive
the Liquidation Distribution Pro Rata with the Holders of the Preferred
Securities, except that if an Indenture Event of Default has occurred and is
continuing, then the Preferred Securities shall have a preference over the
Common Securities with regard to the Liquidation Distribution.
(e) After the date fixed for any distribution of Senior Deferrable
Notes upon dissolution of the Trust, (i) the Securities no longer shall be
deemed to be outstanding and (ii) the Certificates shall be deemed to represent
the Senior Deferrable Notes in a principal amount equal to the stated
liquidation amount of the Securities, bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on the Securities,
until such Certificates are presented to the Regular Trustees or agent for
transfer or reissuance.
ARTICLE 9: LIMITATION OF LIABILITY OF
HOLDERS OF THE SECURITIES, THE DELAWARE TRUSTEE AND OTHERS
SECTION 9.1 Liability.
(a) Except as expressly set forth in this Declaration and the
Guarantee, the Sponsor and the Trustees:
(i) shall not be personally liable for the return of any
portion of the capital contributions (or any return thereon) of the
Holders of the Securities that will be made solely from assets of the
Trust; and
(ii) shall not be required to pay to the Trust or to any
Holder of the Securities any deficit, upon dissolution of the Trust or
otherwise.
(b) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holder
of the Common Securities 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; provided that the
Holders of the Common Securities shall be liable for all of the debts
56
and obligations of the Trust (other than with respect to the Securities) to the
extent such debts and obligations are not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holder
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 9.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or to any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Trust and in a manner
that such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence (or, in
the case of the Property Trustee, negligence) or willful misconduct with respect
to such acts or omissions.
(b) Each Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters such
Indemnified Person reasonably believes to be within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which distributions to Holders of the Securities might properly be paid.
SECTION 9.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between a
Covered Person and an Indemnified Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
57
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 9.4 Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor, in
its capacity as Senior Deferrable Notes Issuer, shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) The provisions of this Section 9.4 shall survive the termination of
this Declaration or the resignation or removal of any Trustee.
(c) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was an Indemnified Person against any liability
asserted against him or her and incurred by him or her in any such capacity, or
arising out of his or her status as such, whether or not the Sponsor would have
the power to indemnify him or her against such liability under the provisions of
this Section 9.4.
(d) For purposes of this Section 9.4, references to "the Trust" shall
include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in
58
the same position under the provisions of this Section 9.4 with respect to the
resulting or surviving entity as he or she would have had with respect to such
constituent entity if its separate existence had continued.
(e) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 9.4 shall continue, unless otherwise provided
when authorized or ratified, as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors and administrators
of such a Person.
SECTION 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 6.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the activities of the Trust, and the
Trust and the Holders of the Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
activities of the Trust, shall not be deemed wrongful or improper. Each Covered
Person, the Sponsor, the Delaware Trustee and the Property Trustee shall not be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware
Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE 10: ACCOUNTING
SECTION 10.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or shall cause to be kept, full books of account, records
and supporting documents, which shall reflect in reasonable detail each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
59
(b) The Regular Trustees shall cause to be prepared and delivered to
each Holder of Securities, within 90 days after the end of each Fiscal Year of
the Trust, annual financial statements of the Trust, including a balance sheet
of the Trust as of the end of such Fiscal Year, and the related statements of
income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each Holder of Securities an annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such statements within 30 days after the end of each Fiscal Year of the
Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States federal income tax
return, on Form 1041 or such other form required by United States federal income
tax law, and any other annual income tax returns required to be filed on behalf
of the Trust with any state or local taxing authority.
SECTION 10.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided that all payments of funds in
respect of the Senior Deferrable Notes held by the Property Trustee shall be
made directly to the Property Account and no other funds of the Trust shall be
deposited in the Property Account. The sole signatories for such accounts shall
be designated by the Regular Trustees; provided that the Property Trustee shall
designate the signatories for the Property Account.
SECTION 10.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Regular Trustees shall request, and the Holders of the Securities shall provide
to the Trust, such forms or certificates as are necessary to establish an
exemption from withholding with respect to each Holder of Securities and any
representations and forms as shall reasonably be requested by the Regular
Trustees to assist them in determining the extent of, and in fulfilling, the
Trust's withholding obligations. The Regular Trustees shall file required forms
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder of Securities, shall remit amounts withheld
with respect to such Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder of Securities, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to such Holder. In the event of any claimed over withholding, a Holder shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.
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ARTICLE 11: AMENDMENTS AND MEETINGS
SECTION 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended only by a
written instrument approved and executed by the Sponsor and (i) the Regular
Trustees (or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and (ii) the Property Trustee (if the amendment affects the
rights, powers, duties, obligations or immunities of the Property Trustee) and
(iii) by the Delaware Trustee (if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee).
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee first has received an Officers' Certificate from each
of the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment that
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee first has received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted
by, and conforms to, the terms of this
Declaration (including the terms of the
Securities); and
(B) an opinion of counsel (which may be counsel to
the Sponsor or the Trust) that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to
(A) cause the Trust to be classified other than as a
grantor trust for United States federal income
tax purposes;
(B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the
Investment Company Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, (i) any amendment that would (A) adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
this Declaration or otherwise or (B) result in the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of this
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Declaration shall not be effective except with the approval of the Holders of at
least a 66 2/3% in Liquidation Amount of the Securities; provided that if any
amendment or proposal referred to in clause (A) above would adversely affect
only the Preferred Securities or the Common Securities, then only the affected
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 a 66 2/3% in
Liquidation Amount of the class of Securities affected thereby; and (ii) any
amendment that would (X) change the amount or timing of any distribution of the
Securities or otherwise adversely affect the amount of any distribution require
to be made in respect of the Securities as of a specified date or (Y) restrict
the right of a Holder of Securities to institute suit for the enforcement of
such payment on or after such date shall not be effective except with the
approval of each Holder of Securities affected thereby.
(d) This Section 11.1 shall not be amended without the consent of all
of the Holders of the Securities.
(e) Article 4 shall not be amended without the consent of the Holders
of the Common Securities.
(f) The rights of the Holders of the Common Securities under Articles
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of the Common Securities.
(g) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Securities, provided that such
amendment does not have a material adverse effect on the rights, preferences or
privileges of the Holders of the Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) to add to the covenants, restrictions or obligations of
the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change
in interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority;
(v) to modify, eliminate and add to any provision of this
Declaration to ensure that the Trust will be classified as a grantor
trust for United States federal income tax purposes at all times that
any Securities are outstanding or to ensure that the Trust will not be
required to register as an Investment Company under the Investment
Company Act; provided that such modification, elimination or addition
would not adversely affect in any material respect the rights,
privileges or preferences of any Holder of Securities; or
(vi) [to facilitate the tendering, remarketing and settlement
of the Preferred Securities as contemplated by Section 7.13(n).]
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SECTION 11.2 Meetings of the Holders of the Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or admitted for
trading. The Regular Trustees shall call a meeting of the Holders of such class
if directed to do so by the Holders of at least 10% in Liquidation Amount of
such class of Securities. Such direction shall be given by delivering to the
Regular Trustees a writing stating that the signing Holders of the Securities
wish to call a meeting and indicating the general or-specific purpose for which
the meeting is to be called. The Holder or Holders of the Securities calling a
meeting shall specify in writing the Certificates held by such Holder or
Holders, and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of the Holders of
the Securities:
(i) Notice of any such meeting shall be given to all the
Holders of the Securities having a right to vote thereat at least seven
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of the Securities
is permitted or required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or admitted
for trading, such vote, consent or approval may be given at a meeting
of the Holders of the Securities. Any action that may be taken at a
meeting of the Holders of the Securities may be taken without a meeting
and without prior notice if a consent in writing setting forth the
action so taken is signed by the Holders of the Securities owning not
less than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting at
which all Holders of the Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders of the Securities entitled to
vote who have not consented in writing. The Regular Trustees may
specify that any written ballot submitted to the Holders of the
Securities for the purpose of taking any action without a meeting shall
be returned to the Trust within the time specified by the Regular
Trustees.
(ii) Each Holder of the Securities may authorize any Person to
act for it by proxy on any or all matters in which such Holder is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing such proxy. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
of the Securities were stockholders of a Delaware corporation.
63
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate.
(iv) Unless the Statutory Trust Act, this Declaration, the
Trust Indenture Act or the listing rules of any stock exchange on which
the Preferred Securities are then listed for trading otherwise
provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of the
Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of the
Securities, waiver of any such notice, action by consent without a
meeting without prior notice, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other matter
with respect to the exercise of any such right to vote.
ARTICLE 12: REPRESENTATIONS OF THE PROPERTY TRUSTEE
AND THE DELAWARE TRUSTEE
SECTION 12.1 Representations and Warranties of the Property Trustee.
The initial Property Trustee represents and warrants to the Trust and
to the Sponsor at the date of this Declaration, and each Successor Property
Trustee represents and warrants to the Trust and the Sponsor at the time of such
Successor Property Trustee's acceptance of its appointment as Property Trustee,
that:
(a) the Property Trustee is a corporation or national banking
association duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;
(b) the Property Trustee satisfies the requirements set forth in
Section 6.3(a);
(c) the execution, delivery and performance by the Property Trustee of
this Declaration have been duly authorized by all necessary corporate action on
the part of the Property Trustee; this Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee do not conflict with, nor constitute a breach of, the articles
of association or incorporation, as the case may be, or the by-laws (or other
similar organizational documents) of the Property Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution
delivery or performance by the Property Trustee of this Declaration.
64
SECTION 12.2 Representations and Warranties of the Delaware Trustee.
The initial Delaware Trustee represents and warrants to the Trust and
to the Sponsor at the date of this Declaration, and each Successor Delaware
Trustee represents and warrants to the Trust and the Sponsor at the time of such
Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee,
that:
(a) the Delaware Trustee satisfies the requirements set forth in
Section 6.2 and has the power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration and, if it
is not a natural person, is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration; and this Declaration
constitutes a legal, valid and binding obligation of the Delaware Trustee under
Delaware law, enforceable against it in accordance with its terms subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law) and
(c) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration.
ARTICLE 13: MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Property Trustee, the Delaware Trustee and the Holders of
the Securities):
VEC Trust III
One Valero Place
P.O. Box 500
San Antonio, Texas 78212
Attention: Jay D. Browning, Vice President and
Corporate Secretary
Telephone No: (210) 370-2031
Fax No: (210) 370-2490
65
with a copy to:
Attention: Donna M. Titzman
Telephone No: (210) 370-2180
Fax No: (210) 370-2497
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Regular Trustees, the Property Trustee and the Holders of the Securities):
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street
21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telephone No: (212) 815-3703
Fax No: (212) 815-5915
(c) if given to the Property Trustee, at its Corporate Trust Office to
the attention of Corporate Trust Trustee Administration (telephone no. (212)
815-3703 and fax no. (212) 815-5915) (or such other address as the Property
Trustee may give notice of to the Regular Trustees, the Delaware Trustee and the
Holders of the Securities);
(d) if given to the Holders of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holders of
the Common Securities may give notice of to the Property Trustee, the Delaware
Trustee and the Trust):
Valero Energy Corporation
One Valero Place
San Antonio, Texas 78212
Attention: Jay D. Browning, Vice President and
Corporate Secretary
Telephone No: (210) 370-2031
Fax No: (210) 370-2490
with a copy to:
Attention: Donna M. Titzman
Telephone No: (210) 370-2180
Fax No: (210) 370-2497
(e) if given to any Holder of Preferred Securities, at such Holder's
address as set forth in the register of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed or mailed by first class mail, postage
prepaid, except that if a notice or other
66
document is refused delivery or cannot be delivered because of a changed address
of which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
SECTION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware, without regard to principles of conflicts of laws.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted in a manner consistent with such
classification.
SECTION 13.4 Headings.
The headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustee shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration or the application of such
provision to any Person or circumstance is held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page, and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
67
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
VALERO ENERGY CORPORATION,
as Sponsor, Senior Deferrable Notes Issuer and
Common Securities Holder
By:
Michael S. Ciskowski, Executive Vice
President and Chief Financial Officer
THE BANK OF NEW YORK,
as Property Trustee
By:
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:
Name:
Title:
Jay D. Browning, as Regular Trustee
Michael S. Ciskowski, as Regular Trustee
Donna M. Titzman, as Regular Trustee
EXHIBIT A
This Preferred Security is a Global Security within the meaning of the
Amended and Restated Declaration of VEC TRUST III hereinafter referred to and is
registered in the name of The Depository Trust Company, a New York corporation
(the "Depositary"), or a nominee of the Depositary. This Preferred Security is
exchangeable for Preferred Securities registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances described
in the Declaration, and no transfer of this Preferred Security (other than a
transfer of this Preferred Security as a whole by the Depositary to a nominee of
the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered, except in limited circumstances.
Unless this Preferred Security Certificate is presented by an
authorized representative of the Depositary to the issuer or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), and except as otherwise provided
in the Amended and Restated Declaration of VEC Trust III dated _________, 200__,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL, since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate No. Number of Preferred Securities:
---------- ------------
CUSIP No. Aggregate Liquidation Amount: $
---------------- -----------
|
Certificate Evidencing Preferred Securities
of
VEC Trust III
Preferred Securities
(liquidation amount $___ per Preferred Security)
VEC Trust III, a statutory trust created 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 Preferred
Securities (liquidation amount $___ per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the register 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 the
Declaration (as defined below). The designation rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respect be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust,
dated as of ________, 200__ (as the same may be amended from time to time (the
"Declaration"), among Valero Energy Corporation, as Sponsor, Jay D. Browning,
Michael S. Ciskowski and Donna M. Titzman, as Regular Trustees, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee,
and the holders from time to time, of undivided beneficial interests in the
A-1
assets of the Trust. Capitalized terms used herein but not defined shall have
the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee Agreement, dated as of _________, 200__, as the same
may be amended from time to time, of Valero Energy Corporation, in respect of
the Preferred Securities. The Sponsor will provide a copy of the Declaration,
the Guarantee and the Indenture to a Holder without charge upon written request
to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Senior Deferrable Notes as indebtedness of the Sponsor
and the Preferred Securities as evidence of undivided indirect beneficial
ownership interests in the Senior Deferrable Notes.
A-2
IN WITNESS WHEREOF, the Trust has executed this certificate this
____ day of ___________, 200__.
VEC TRUST III
By: Michael S. Ciskowski
Regular Trustee
This is one of the Securities referred to in the within-mentioned
Declaration.
THE BANK OF NEW YORK, as
Property Trustee
By:
Title:
A-3
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN
THE DECLARATION (AS DEFINED BELOW)
Certificate No. Number of Common Securities:
---------- ----------
Aggregate Liquidation Amount: $
---------
|
Certificate Evidencing Common Securities
of
VEC Trust III
Common Securities
(liquidation amount $___ per Common Security)
VEC Trust III, a statutory trust created under the laws of the State of
Delaware (the "Trust"), hereby certifies that Valero Energy Corporation (the
"Holder") is the registered owner of _________________ common securities of the
Trust representing an undivided beneficial interest in the assets of the Trust
designated the Common Securities (liquidation amount $___.00 per Common
Security) (the "Common Securities"). Except as provided in the Declaration (as
defined below), the Common Securities are not transferable, and any attempted
transfer thereof shall be void. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust,
dated as of ________, 200__ (as the same may be amended from time to time, the
"Declaration"), among Valero Energy Corporation, as Sponsor, Jay D. Browning,
Michael S. Ciskowski and Donna M. Titzman, as Regular Trustees, The Bank of New
York, as Property Trustee, The Bank of New York (Delaware), as Delaware Trustee,
and the holders, from time to time, of undivided beneficial ownership interests
in the assets of the Trust. The Sponsor will provide a copy of the Declaration
and the Indenture to the Holder without charge upon written request to the
Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the terms of
the Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Senior Deferrable Notes as indebtedness of the Sponsor
and the Common Securities as evidence of an undivided indirect beneficial
ownership interest in the Senior Deferrable Notes.
B-1
IN WITNESS WHEREOF, the Trust has executed this certificate this ______
day of __________, 200_.
VEC TRUST III
By: Michael S. Ciskowski
Regular Trustee
B-2
EXHIBIT 4.13
FORM OF
VALERO ENERGY CORPORATION
GUARANTEE AGREEMENT
VEC TRUST [ ] [ ]
Dated as of ,
-------- --- ----
---------------------------
|
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.....................................................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 Trust Indenture Act; Application................................................................5
SECTION 2.02 Lists of Holders of Preferred Securities........................................................5
SECTION 2.03 Reports by the Guarantee Trustee................................................................6
SECTION 2.04 Periodic Reports to the Guarantee Trustee.......................................................6
SECTION 2.05 Evidence of Compliance with Conditions Precedent................................................6
SECTION 2.06 Events of Default; Waiver.......................................................................6
SECTION 2.07 Disclosure of Information.......................................................................7
SECTION 2.08 Conflicting Interest............................................................................7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01 Powers and Duties of the Guarantee Trustee......................................................7
SECTION 3.02 Certain Rights and Duties of the Guarantee Trustee..............................................8
SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee..........................................10
SECTION 3.04 The Guarantee Trustee May Own Preferred Securities.............................................11
SECTION 3.05 Moneys Received by the Guarantee Trustee to Be Held in Trust Without
Interest.......................................................................................11
SECTION 3.06 Compensation and Expenses of Guarantee Trustee.................................................11
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 Qualifications.................................................................................12
SECTION 4.02 Appointment, Removal and Resignation of the Guarantee Trustee..................................12
ARTICLE V
GUARANTEE
SECTION 5.01 Guarantee......................................................................................13
SECTION 5.02 Waiver of Notice...............................................................................13
SECTION 5.03 Obligations Not Affected.......................................................................13
SECTION 5.04 Enforcement of Guarantee.......................................................................14
SECTION 5.05 Guarantee of Payment...........................................................................15
SECTION 5.06 Subrogation....................................................................................15
SECTION 5.07 Independent Obligations........................................................................15
|
i
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01 Limitation of Transactions.....................................................................16
[SECTION 6.02 Subordination..................................................................................17
ARTICLE VII
TERMINATION
SECTION 7.01 Termination....................................................................................17
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01 Exculpation....................................................................................17
SECTION 8.02 Indemnification................................................................................18
SECTION 8.03 Survive Termination............................................................................18
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Successors and Assigns.........................................................................18
SECTION 9.02 Amendments.....................................................................................19
SECTION 9.03 Notices........................................................................................19
SECTION 9.04 Genders........................................................................................20
SECTION 9.05 Benefit........................................................................................20
SECTION 9.06 Governing Law..................................................................................20
SECTION 9.07 Counterparts...................................................................................20
SECTION 9.08 [Exercise of Overallotment Option..............................................................20
SECTION 9.09 Limited Liability..............................................................................20
|
ii
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of __________, ____, is
executed and delivered by VALERO ENERGY CORPORATION, a Delaware corporation (the
"Guarantor"), and The Bank of New York, a national banking association, as the
initial Guarantee Trustee (as defined herein) for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of VEC Trust [ ] [ ], a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of ______________, ____ among the trustees
of the Issuer named therein, Valero Energy Corporation, as Sponsor, and the
Holders from time to time of preferred undivided beneficial interests in the
assets of the Issuer, the Issuer may issue up to $_____________ aggregate
liquidation amount of its _____% [Convertible] Trust Preferred Securities (the
"Preferred Securities") representing preferred undivided beneficial interests in
the assets of the Issuer and having the terms set forth in the Declaration [, of
which $_____________ liquidation amount of Preferred Securities is being issued
as of the date hereof. Up to the remaining $______________ liquidation amount of
Preferred Securities may be issued by the Issuer if and to the extent that the
over-allotment option granted by the Guarantor and the Issuer pursuant to the
Underwriting Agreement (as defined in the Declaration) is exercised by the
Underwriters named in the Underwriting Agreement]; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the purchase by the
initial purchasers thereof of Preferred Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Guarantee Agreement for the benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions.
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble or recitals above have the respective meanings assigned
to them in this Section 1.01.
(b) A term defined anywhere in this Guarantee Agreement has
the same meaning throughout.
1
(c) All references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified, supplemented
or amended from time to time.
(d) All references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified.
(e) A term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires.
(f) A reference to the singular includes the plural and vice
versa.
"Additional Amounts" has the meaning set forth in the
Indenture.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such specified Person. For purposes of this definition,
"control" of a Person shall mean 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" shall have meanings correlative to the foregoing.
"Business Day" has the meaning set forth in the Indenture.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer and having the terms
set forth in Exhibit C to the Declaration.
"Common Stock" means the common stock, _____ par value per
share, of the Guarantor, including associated preferred share purchase rights.
"Debentures" means the series of [convertible] unsecured
[junior subordinated] [senior] debentures issued to the Property Trustee by the
Guarantor under the Indenture and entitled the "___% [Convertible] [Junior
Subordinated] [Senior] Debentures due _____."
"Declaration" has the meaning set forth in the recitals above.
"Distributions" means the periodic distributions and other
payments payable to Holders in accordance with the terms of the Preferred
Securities set forth in Exhibit B to the Declaration.
"Dollar" has the meaning set forth in the Indenture.
2
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payment, any such default shall constitute an Event of Default only if the
Guarantor shall have received notice of such default and shall not have cured
such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accumulated
and unpaid Distributions, any Additional Amounts payable with respect to the
Preferred Securities in accordance with the terms thereof and the Redemption
Price, including all accumulated and unpaid Distributions and Additional Amounts
to the date of redemption, with respect to the Preferred Securities called for
redemption by the Issuer but only if and to the extent that in each case the
Guarantor has made a payment to the Property Trustee of principal of, any
premium or interest on or any Additional Amounts with respect to the Debentures
and (ii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Debentures to
Holders in exchange for Preferred Securities or the redemption of the Preferred
Securities in full upon the maturity or redemption of the Debentures as provided
in the Declaration), the lesser of (a) the aggregate of the liquidation amount
and all accumulated and unpaid Distributions and Additional Amounts on the
Preferred Securities to the date of payment, to the extent the Issuer has funds
on hand legally available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer as
required by applicable law.
"Guarantee Trustee" means The Bank of New York, a national
banking association, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee Agreement,
and thereafter means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Guarantee
Trustee.
"Indenture" means the Indenture dated as of _________, ____
between the Guarantor and The Bank of New York, as trustee, as supplemented by
the ________ Supplemental Indenture thereto dated as of _______ __, ____ (the
"Supplemental Indenture"), pursuant to which the Debentures are to be issued to
the Property Trustee.
3
"Majority of Outstanding Preferred Securities" means Holder(s)
of outstanding Preferred Securities, voting together as a single class, who are
the record owners of Preferred Securities representing more than 50% of the
outstanding Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, the President, any Vice
Chairman of the Board, any Vice President, the chief financial officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Assistant Secretary of such Person, and delivered to the Guarantee Trustee. One
of the officers signing an Officers' Certificate given pursuant to Section 2.04
shall be the principal executive, financial or accounting officer of the
Guarantor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Guarantee Agreement shall include:
(i) a statement that the person making such certificate has
read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate are based;
(iii) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, incorporated or unincorporated
association, joint stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof or other entity of
any kind.
"Preferred Securities" has the meaning set forth in the
recitals above.
"Property Trustee" means the Person acting as Property Trustee
under the Declaration.
"Redemption Price" means the amount payable on redemption of
the Preferred Securities in accordance with the terms of the Preferred
Securities.
"Responsible Officer" means, when used with respect to the
Guarantee Trustee, any officer within the corporate trust department of the
Guarantee Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of
the Guarantee Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred
4
because of such Person's knowledge of and familiarity with the particular
subject and, in either case, who shall have direct responsibility for the
administration of this Guarantee Agreement.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as a Guarantee Trustee under
Section 4.01.
"Supplemental Indenture" has the meaning specified in the
definition of Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01 Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of
the Trust Indenture Act that are required to be part of this Guarantee Agreement
and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(c) The application of the Trust Indenture Act to this
Guarantee Agreement shall not affect the nature of the Preferred Securities as
equity securities representing preferred undivided beneficial interests in the
assets of the Issuer.
SECTION 2.02 Lists of Holders of Preferred Securities.
(a) The Guarantor shall provide the Guarantee Trustee (unless
the Guarantee Trustee is the registrar of the Preferred Securities) (i) within
14 days after each record date for payment of Distributions, a list, in such
form as the Guarantee Trustee may reasonably require, of the names and addresses
of the Holders ("List of Holders") as of such date, and (ii) at any other time,
within 30 days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 15 days before such List of Holders is given
to the Guarantee Trustee; provided that in each case the Guarantor shall not be
obligated to provide such List of Holders at any time that the List of Holders
does not differ from the most recent List of Holders given to the Guarantee
Trustee by the Guarantor. The Guarantee Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in the Lists of
Holders given to it; provided that the Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
5
(b) The Guarantee Trustee shall comply with its obligations
under Section 312(b) of the Trust Indenture Act.
SECTION 2.03 Reports by the Guarantee Trustee.
Within 60 days after May 15 of each year, commencing May 15,
____, the Guarantee Trustee shall deliver to the Holders such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form, in the
manner and at the times provided by Section 313 of the Trust Indenture Act. The
Guarantee Trustee shall also comply with the other requirements of Section 313
of the Trust Indenture Act. A copy of each such report shall, at the time of
such transmission to the Holders, be filed by the Guarantee Trustee with the
Guarantor, with each stock exchange or quotation system upon which any Preferred
Securities are listed or traded (if so listed or traded) and also with the
Commission. The Guarantor agrees to notify the Guarantee Trustee when any
Preferred Securities become listed on any stock exchange or quotation system and
of any delisting thereof.
SECTION 2.04 Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the
Commission and the Holders, as applicable, such documents, reports and
information (if any) as required by Section 314(a)(1)-(3) of the Trust Indenture
Act and the compliance certificates required by Section 314(a)(4) and (c) of the
Trust Indenture Act, any such certificates to be provided in the form, in the
manner and at the times required by Section 314(a)(4) and (c) of the Trust
Indenture Act (provided that any certificate to be provided pursuant to Section
314(a)(4) of the Trust Indenture Act shall be provided within 120 days of the
end of each fiscal year of the Issuer). Delivery of such reports, information
and documents to the Guarantee Trustee is for informational purposes only and
the Guarantee Trustee's receipt of such shall not constitute constructive notice
of any information contained therein, including the Guarantor's compliance with
any of its covenants hereunder (as to which the Guarantee Trustee is entitled to
rely exclusively on Officers' Certificates or on certificates provided pursuant
to this Section 2.04).
SECTION 2.05 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Guarantee Agreement which 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) may be given in the form of an
Officers' Certificate.
SECTION 2.06 Events of Default; Waiver.
(a) The Holders of a Majority of Outstanding Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be
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deemed to have been cured, for every purpose of this Guarantee Agreement, but no
such waiver shall extend to any subsequent or other default or Event of Default,
or impair any right consequent thereon.
(b) The right of any Holder to receive payment of the
Guarantee Payments in accordance with this Guarantee Agreement, or to institute
suit for the enforcement of any such payment, shall not be impaired without the
consent of each such Holder.
SECTION 2.07 Disclosure of Information.
The disclosure of information as to the names and addresses of
the Holders in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted which
does not specifically refer to Section 312 of the Trust Indenture Act, nor shall
the Guarantee Trustee be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.
SECTION 2.08 Conflicting Interest.
(a) The Declaration shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(b) The Guarantee Trustee shall comply with its obligations
under Sections 310(b) and 311 of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.01 Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee
Trustee in trust for the benefit of the Holders. The Guarantee Trustee shall not
transfer its right, title and interest in this Guarantee Agreement to any Person
except a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee of its appointment to act as Guarantee Trustee or to a Holder exercising
his or her rights pursuant to Section 5.04(iv). The right, title and interest of
the Guarantee Trustee to this Guarantee Agreement shall vest automatically in
each Person who may hereafter be appointed as Guarantee Trustee in accordance
with Article IV. Such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
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(c) This Guarantee Agreement and all moneys received by the
Guarantee Trustee in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor of, or
for the benefit of, the Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Guarantee Trustee, transmit by mail, first class postage prepaid, to the
Holders, as their names and addresses appear upon the List of Holders, notice of
all such Events of Default, unless such defaults shall have been cured before
the giving of such notice; provided that the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders. The Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default except any Event of
Default as to which the Guarantee Trustee shall have received written notice or
a Responsible Officer charged with the administration of this Guarantee
Agreement shall have obtained written notice of such Event of Default.
(e) The Guarantee Trustee shall continue to serve as a trustee
until a Successor Guarantee Trustee has been appointed and accepted that
appointment in accordance with Article IV.
SECTION 3.02 Certain Rights and Duties of the Guarantee Trustee.
(a) The Guarantee Trustee, before the occurrence of an Event
of Default and after the curing or waiving of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Guarantee Agreement, and no implied covenants shall be read
into this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, and use the same degree of care and skill in
its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement, and no implied
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covenants or obligations shall be read into this Guarantee
Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; provided,
however, that in the case of any such certificates or opinions
that by any provision hereof or the Trust Indenture Act are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Guarantee Agreement or the Trust
Indenture Act, as the case may be;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a Majority of
Outstanding Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Guarantee Agreement or adequate indemnity against such risk or
liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established prior to taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate, which, upon
receipt of such request, shall be promptly delivered by the Guarantor;
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(ii) the Guarantee Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees) selected by it in good faith and with due
care and the written advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon and in accordance with such advice
and opinion and (B) shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement
from any court of competent jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have offered to the Guarantee Trustee security and indemnity
satisfactory to the Guarantee Trustee against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be
incurred by it in complying with such request or direction; provided
that nothing contained in this clause (iv) shall relieve the Guarantee
Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured or waived) to exercise such of the rights and
powers vested in it by this Guarantee Agreement, and to use the same
degree of care and skill in this exercise as a prudent person would
exercise or use under the circumstances in the conduct of his own
affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be required to
inquire as to the authority of the Guarantee Trustee to so act, or as
to its compliance with any of the terms and provisions of this
Guarantee Agreement, both of which shall be conclusively evidenced by
the Guarantee Trustee's or its agent's taking such action.
SECTION 3.03 Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee Agreement shall be
taken as the statements of the Guarantor, and the Guarantee Trustee does not
assume any responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee Agreement.
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SECTION 3.04 The Guarantee Trustee May Own Preferred Securities.
The Guarantee Trustee, in its individual or any other
capacity, may become the owner or pledgee of Preferred Securities and may
otherwise deal with the Guarantor with the same rights it would have if it were
not the Guarantee Trustee.
SECTION 3.05 Moneys Received by the Guarantee Trustee to Be Held in
Trust Without Interest.
All moneys received by the Guarantee Trustee in respect of
Guarantee Payments shall, until used or applied as herein provided, be held in
trust for the purposes for which they were received, but need not be segregated
from other funds except to the extent required by law. The Guarantee Trustee
shall be under no liability for interest on any moneys received by it hereunder
except such as it may agree in writing to pay thereon.
SECTION 3.06 Compensation and Expenses of Guarantee Trustee.
The Guarantor covenants and agrees to pay to the Guarantee
Trustee from time to time, and the Guarantee Trustee shall be entitled to, such
compensation as the Guarantor and the Guarantee Trustee shall from time to time
agree in writing (which shall not be limited by any provision of law in regard
to the compensation of a Guarantee Trustee of an express trust) for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Guarantee Trustee, and the Guarantor will pay or reimburse the
Guarantee Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Guarantee Trustee in accordance with any of
the provisions of this Guarantee Agreement (including the reasonable
compensation and the reasonable expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Guarantor also
covenants to indemnify each of the Guarantee Trustee or any predecessor
Guarantee Trustee and their officers, agents, directors and employees for, and
to hold them harmless against, any and all loss, liability, damage, claim or
expense including taxes (other than taxes based upon, measured by or determined
by the income, profit, franchise or doing business of the Guarantee Trustee)
incurred without negligence or bad faith on the part of the Guarantee Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the reasonable costs and expenses of defending itself
against any claim (whether asserted by the Guarantor, any Holder or any other
Person) of liability in the premises. The provisions of this Section 3.06 shall
survive the termination of this Guarantee Agreement and resignation or removal
of the Guarantee Trustee.
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ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01 Qualifications.
There shall at all times be a Guarantee Trustee that shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a national banking association or corporation
organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the Commission to act
as an institutional trustee under the Trust Indenture Act, authorized
under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, and subject to supervision
or examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
clause (ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy
the requirements of clauses (i) and (ii) above, the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02. If
the Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and
the Guarantor shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
SECTION 4.02 Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.01 has been appointed
and has accepted such appointment by written instrument executed by such
Successor Guarantee Trustee and delivered to the Guarantor and the Guarantee
Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold
office until its successor shall have been appointed or until its removal or
resignation.
(d) The Guarantee Trustee may resign from office (without need
for prior or subsequent accounting) by an instrument (a "Resignation Request")
in writing signed by the
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Guarantee Trustee and delivered to the Guarantor, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that no such resignation of the Guarantee Trustee shall be
effective until a Successor Guarantee Trustee possessing the qualifications to
act as Guarantee Trustee under Section 4.01 has been appointed and has accepted
such appointment by instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor and the resigning Guarantee Trustee.
(e) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of a Resignation Request, the resigning
Guarantee Trustee may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may thereupon after
such notice, if any, as it may deem proper, appoint a Successor Guarantee
Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or to the
Guarantee Trustee for remittance to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.02 Waiver of Notice.
The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands. Notwithstanding anything to the contrary herein, the
Guarantor retains all of its rights under the Indenture to extend the interest
payment period on the Debentures and the Guarantor shall not be obligated
hereunder to make any Guarantee Payment during any Extended Interest Payment
Period (as defined in the Supplemental Indenture) with respect to the
Distributions on the Preferred Securities.
SECTION 5.03 Obligations Not Affected.
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
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(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time
for payment of Distributions that result from any Extended Interest
Payment Period), Redemption Price, Liquidation Distribution (as defined
in the Declaration) or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions that result from any Extended Interest Payment Period);
(c) any failure, omission, delay or lack of diligence on the
part of the Guarantee Trustee or the Holders to enforce, assert or
exercise any right, privilege, power or remedy conferred on the
Guarantee Trustee or the Holders pursuant to the terms hereof or of the
Preferred Securities, respectively, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.03 that the obligations of the
Guarantor with respect to the Guarantee Payments shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Guarantee Trustee or the
Holders to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.04 Enforcement of Guarantee.
The Guarantor and the Guarantee Trustee expressly acknowledge
and agree that (i) this Guarantee Agreement will be deposited with the Guarantee
Trustee to be held for the benefit of the Holders; (ii) the Guarantee Trustee
has the right to enforce this Guarantee Agreement on behalf of the Holders;
(iii) Holders representing not less than a Majority of Outstanding Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any
14
remedy available to the Guarantee Trustee in respect of this Guarantee Agreement
or exercising any trust or other power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and (iv) if the Guarantee Trustee fails to
enforce this Guarantee Agreement as provided in clauses (ii) and (iii) above,
any Holder may institute a legal proceeding directly against the Guarantor to
enforce its rights under this Guarantee Agreement, without first instituting a
legal proceeding against the Issuer, the Guarantee Trustee or any other Person.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder may directly institute a proceeding against the Guarantor for
enforcement of this Guarantee Agreement for such payment without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or any
other Person.
SECTION 5.05 Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and
not merely of collection. This Guarantee Agreement will not be discharged except
by payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer) or upon the distribution of the Debentures to
the Holders as provided in the Declaration.
SECTION 5.06 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to the Holders by
the Guarantor under this Guarantee Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders or to the Guarantee Trustee for
remittance to the Holders.
SECTION 5.07 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.03 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01 Limitation of Transactions.
So long as any Preferred Securities remain outstanding, the
Guarantor shall not (1) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities that rank junior to
the Debentures in the right of payment issued by the Guarantor, or (2) make any
guarantee payments with respect to any guarantee by the Guarantor of any
securities of any of its subsidiaries if such guarantee ranks junior to the
Debentures in right of payment or (3) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Guarantor's capital stock, except for or as a result
of (a) dividends or distributions in, or options, warrants or rights to
subscribe for or purchase, the Common Stock; (b) any declaration of a dividend
in connection with the implementation of a shareholder's rights plan, or the
issuance of shares under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto; (c) a reclassification of the
Guarantor's capital stock solely into shares of one or more classes or series of
the Guarantor's capital stock or the exchange or conversion of one class or
series of the Guarantor's capital stock for or into another class or series of
the Guarantor's capital stock; (d) the purchase of fractional interests in
shares of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged;
and (e) the purchase of the Guarantor's common stock in connection with the
Guarantor's normal course issuer bid-purchases for the satisfaction by the
Guarantor of its obligations under any benefit plans for the Guarantor and the
Guarantor's subsidiaries' directors, officers or employees or under any of the
Guarantor's dividend reinvestment plans, if at such time (i) the Guarantor shall
be in default with respect to its Guarantee Payments or other payment
obligations hereunder, (ii) there shall have occurred and be continuing any
trust enforcement event under the Declaration or (iii) the Guarantor shall have
given notice of its election of an Extended Interest Payment Period and such
period, or any extension thereof, is continuing. In addition, so long as any
Preferred Securities remain outstanding, the Guarantor (i) will remain the sole
direct or indirect owner of all of the outstanding Common Securities and shall
not cause or permit the Common Securities to be transferred except to the extent
such transfer is permitted under Section [9.01] of the Declaration; provided
that any permitted successor of the Guarantor under the Indenture may succeed to
the Guarantor's direct or indirect ownership of the Common Securities, [(ii)
will cause the holder of the Common Securities to satisfy the requirements of
Section 4.03 of the Declaration] and (iii) will use reasonable efforts to cause
the Issuer to continue to be treated as a grantor trust for United States
federal income tax purposes, except in connection with a distribution of
Debentures as provided in the Declaration.
16
[SECTION 6.02 Subordination.
This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor and any guarantees of the
Guarantor relating to such liabilities, except in each case those made pari
passu or subordinate by their terms, and (ii) senior to all capital stock
[(other than the most senior preferred stock issued from time to time, if any,
by the Guarantor, which preferred stock will rank pari passu with this Guarantee
Agreement)] and to any guarantee now or hereafter entered into by the Guarantor
in respect of any of its capital stock [(other than the most senior preferred
stock issued by the guarantor)] now or hereafter issued by the Guarantor. The
Guarantor's obligations under this Guarantee Agreement will rank pari passu with
respect to obligations under other securities (other than capital stock) the
Guarantor may issue from time to time and other guarantee agreements which it
may enter into from time to time to the extent that (i) such agreements shall
provide for comparable guarantees by the Guarantor of payment on preferred
securities issued by other trusts, partnerships or other entities affiliated
with the Guarantor that are financing vehicles of the Guarantor and (ii) the
debentures or other evidences of indebtedness of the Guarantor relating to such
preferred securities are junior subordinated, unsecured indebtedness of the
Guarantor. The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with the Guarantee Agreement, dated as of , between the
Guarantor and the Guarantee Trustee.]
ARTICLE VII
TERMINATION
SECTION 7.01 Termination.
This Guarantee Agreement shall terminate and be of no further
force and effect (i) upon full payment of the Redemption Price of all Preferred
Securities, (ii) upon the distribution of Debentures [, or any securities in to
which such Debentures are convertible,] to Holders and holders of Common
Securities in exchange for all of the Preferred Securities and Common Securities
or (iii) upon full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to the Preferred Securities or under this Guarantee Agreement.
ARTICLE VIII
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Holder for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee
Agreement and in a manner such Indemnified Person reasonably believed to be
within
17
the scope of the authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders might properly be paid.
SECTION 8.02 Indemnification.
To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith in accordance with this Guarantee Agreement and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
SECTION 8.03 Survive Termination.
The provisions of Sections 8.01 and 8.02 shall survive the
termination of this Guarantee Agreement or the resignation or removal of the
Guarantee Trustee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Successors and Assigns.
All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assignees, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Guarantee
Trustee and the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article X of the Indenture, the Guarantor shall not assign its obligations
hereunder.
18
SECTION 9.02 Amendments.
Except with respect to any changes which do not adversely
affect the rights of Holders in any material respect (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Guarantor, the Guarantee Trustee and the Holders of
not less than a Majority of Outstanding Preferred Securities. The provisions of
Section [12.02] of the Declaration concerning meetings of Holders shall apply to
the giving of such approval.
SECTION 9.03 Notices.
Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, in English, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below
or such other address as the Guarantor may give notice of to the
Holders:
Valero Energy Corporation
One Valero Way
San Antonio, Texas 78249
Attention: General Counsel
(b) if given to the Guarantee Trustee, to the address set
forth below or such other address as the Guarantee Trustee may give
notice of to the Holders:
The Bank of New York
Attention:
(c) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
(i) received in person, (ii) telecopied with receipt confirmed, or (iii) mailed
by first class mail, postage prepaid, when received, except that if a notice or
other document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
19
SECTION 9.04 Genders.
The masculine, feminine and neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 9.05 Benefit.
This Guarantee Agreement is solely for the benefit of the
Guarantee Trustee and the Holders and, subject to Section 3.01(a), is not
separately transferable from the Preferred Securities.
SECTION 9.06 Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07 Counterparts.
This Guarantee Agreement may be executed in counterparts, each
of which shall be an original; but such counterparts shall together constitute
one and the same instrument.
SECTION 9.08 [Exercise of Overallotment Option.
If and to the extent that Preferred Securities are issued by
the Issuer upon exercise of the overallotment option referred to in the first
WHEREAS clause, the Guarantor agrees to give prompt notice thereof to the
Guarantee Trustee but the failure to give such notice shall not relieve the
Guarantor of any of its obligations hereunder.]
SECTION 9.09 Limited Liability.
Neither the Guarantee Trustee nor the Holders, in their
capacities as such, shall be personally liable for any liabilities or
obligations of the Guarantor arising out of this Guarantee Agreement. The
parties further hereby agree that the Holders, in their capacities as such,
shall be entitled to the same limitation of personal liability extended to the
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
20
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
VALERO ENERGY CORPORATION
By:
Name:
Title:
THE BANK OF NEW YORK
as Guarantee Trustee
By:
Name:
Title:
21
EXHIBIT 5.1
VALERO ENERGY CORPORATION
June 18, 2004
Valero Energy Corporation
One Valero Way
San Antonio, Texas 78249
Ladies and Gentlemen:
I am Vice President and Corporate Secretary of Valero Energy
Corporation, a Delaware corporation ("Valero"), and am acting as Valero's
counsel in connection with the offering of the following securities which Valero
or VEC Trust III or VEC Trust IV (the "Trusts"), each a statutory Delaware
trust, may offer, issue and sell from time to time at an aggregate initial
offering price that, without duplication of amounts, will not exceed
$3,500,000,000 (those securities issuable by Valero being "Securities" and those
securities constituting trust preferred securities issuable by each of the
Trusts being "Trust Securities"): (a) Valero's unsecured senior and subordinated
debt securities, (b) shares of Valero's common stock, par value $.01 per share,
and the associated rights to purchase shares of Valero's preferred stock
pursuant to the Rights Agreement, dated as of July 17, 1997 between Valero
(formerly known as Valero Refining and Marketing Company) and Computershare
Investor Services, LLC, as successor rights agent to Harris Trust and Savings
Bank, (c) shares of Valero's preferred stock, par value $.01 per share, (d)
warrants to purchase other Securities, (e) stock purchase contracts of Valero,
(f) stock purchase units of Valero, consisting of (1) a stock purchase contract
of Valero and (2) a beneficial interest in Trust Securities, Securities
consisting of debt securities or debt obligations of third parties securing the
holders' obligation to purchase Valero's common stock under the stock purchase
contracts, (g) Trust Securities, and (h) guarantees of Trust Securities by
Valero.
Each series of Valero's senior debt securities will be issued
pursuant to an indenture dated as of June 18, 2004 between Valero and The Bank
of New York, as trustee (the "Trustee"), and each series of Valero's
subordinated debt securities will be issued pursuant to an indenture to be
entered into between Valero and the Trustee, as each such indenture will be
supplemented, in connection with the issuance of each such series, by a
supplemental indenture or other appropriate action of Valero creating such
series. Each guarantee will be issued pursuant to a guarantee agreement to be
entered into between Valero and the Trustee, as guarantee trustee thereunder.
Concurrently with the delivery of this letter, Valero and the
Trusts are filing with the Securities and Exchange Commission (the "SEC") under
the Securities Act of 1933, as amended (the "Securities Act"), a registration
statement on Form S-3, relating to the offering and sale of the Securities and
Trust Securities under the Securities Act's Rule 415. In this letter,
"Registration Statement" means that registration statement, as amended, when it
becomes
effective under the Securities Act, and "Prospectus" means a prospectus the
Registration Statement includes.
In furnishing this opinion, I or members of my staff have
examined, among other agreements, instruments and documents, and relied without
investigation as to matters of fact upon, the following: (a) Valero's restated
certificate of incorporation and by-laws, each as amended through the date of
this letter (the "Charter Documents"), (b) the Registration Statement and its
exhibits, including (1) the senior indenture included as Exhibit 4.7, (2) the
form of subordinated indenture included as Exhibit 4.8 (the "Subordinated
Indenture Form") and (3) the form of guarantee agreement included as Exhibit
4.13 (the "Guarantee Agreement Form"), and (c) the originals, or copies
certified or otherwise identified, of corporate records of Valero, including
minute books of Valero, certificates of public officials and of representatives
of Valero and the Trusts, statutes and other instruments and documents as I have
deemed necessary or appropriate to form a basis for the opinions hereinafter
expressed.
In connection with this opinion, I have assumed:
(a) the genuineness of all signatures on all documents examined by me,
and the authenticity of all documents submitted to me as originals and the
conformity to the originals of all documents submitted to me as copies;
(b) the Registration Statement and any post-effective amendments
thereto will have become effective under the Securities Act;
(c) for each type or series of Securities Valero offers by means of a
Prospectus, Valero will have prepared and filed with the SEC under the
Securities Act a prospectus supplement which describes that type or series and,
if Securities of another type or series are issuable on the conversion,
exchange, redemption or exercise of the Securities being offered, which also
describes that other type or series;
(d) for Trust Securities either Trust offers by means of a Prospectus,
that Trust will have prepared and filed with the SEC under the Securities Act a
prospectus supplement that describes those Trust Securities;
(e) Valero will have offered, issued and sold the Securities, and each
Trust will have offered, issued and sold its Trust Securities, in the manner the
Registration Statement and the relevant prospectus supplements describe and
otherwise in compliance with all applicable federal and state securities laws;
(f) in the case of Securities of any type which Valero or either of the
Trusts issues and sells, the board of directors of Valero or any committee of
one or more members of that board which that board has duly designated in
accordance with the Charter Documents and applicable Delaware law (that board or
any such committee being the "Board") will have taken all corporate action
necessary to:
(1) authorize the issuance of those Securities and the other
Securities, if any, issuable on the conversion, exchange, redemption or exercise
of those Securities; and
(2) approve the terms of the offering and sale of those
Securities;
(g) Valero and the initial purchasers of the Securities of any type
will have duly authorized, executed and delivered a definitive purchase
agreement relating to those Securities, and each Trust and the initial
purchasers of its Trust Securities will have duly authorized, executed and
delivered a definitive purchase agreement relating to those Trust Securities;
(h) in the case of any Securities issuable on the conversion, exchange,
redemption or exercise of other Securities, those Securities will be available
for issuance on that conversion, exchange, redemption or exercise;
(i) in the case of debt securities of any series issuable under an
indenture the Securities include:
(1) if those debt securities are subordinated debt securities
of Valero, an indenture substantially in the form of the Subordinated Indenture
Form will have been duly executed and delivered by Valero and the Trustee;
(2) in accordance with the terms of the indenture under which
those debt securities will be issued, the Board will have designated and
established the terms of the series to which those debt securities belong and
those debt securities will not include any provision that is unenforceable;
(3) the indenture under which those debt securities will be
issued will have become qualified under the Trust Indenture Act of 1939, as
amended; and
(4) forms of securities complying with the terms of the
indenture under which those debt securities will be issued and evidencing those
debt securities will have been duly executed, authenticated, issued and
delivered in accordance with the provisions of that indenture and either:
(A) the provisions of the applicable purchase
agreement under which Valero will sell those Securities; or
(B) if issued on conversion, exchange, redemption or
exercise of any other Securities, the applicable provisions of that Security or
the agreement or instrument under which that conversion, exchange, redemption or
exercise will be effected;
(j) in the case of guarantees of Trust Securities the Securities
include, the Board will have established the terms of those guarantees, a
guarantee agreement substantially in the form of the Guarantee Agreement Form
will have been duly executed and delivered by Valero and the trustee under that
agreement, that guarantee agreement will have become qualified under the Trust
Indenture Act of 1939, as amended, and will not contain any provision that is
unenforceable and those guarantees will have been duly issued and delivered in
accordance with the provisions of that guarantee agreement and the applicable
purchase agreement under which Valero will sell those Securities;
(k) in the case of shares of preferred stock of any series the
Securities include, the Board will have duly adopted resolutions designating and
establishing the terms of that series and caused a certificate of designations
respecting that series to be prepared and filed with the Secretary of State of
the State of Delaware;
(l) in the case of any warrants the Securities include, the Board will
have established the terms of those warrants and approved the warrant agreement
relating thereto, that warrant agreement will have been duly executed and
delivered by Valero and the warrant agent under that warrant agreement, neither
those warrants nor that warrant agreement will include any provision that is
unenforceable and those warrants will have been duly executed, issued and
delivered in accordance with the provisions of that warrant agreement and the
applicable purchase agreement under which Valero will sell those securities;
(m) in the case of shares of common or preferred stock or warrants the
Securities include, certificates representing those shares or warrants will have
been duly executed, countersigned, registered and delivered, or if
uncertificated, valid book-entry notations will have been made in the share
register of Valero, in each case in accordance with the provisions of the
Charter Documents, applicable Delaware law and either:
(1) the provisions of the applicable purchase agreement under
which Valero will sell those Securities; or
(2) if issued on conversion, exchange, redemption or exercise
of any other Securities, the applicable provisions of that Security or the
agreement or instrument under which that conversion, exchange, redemption or
exercise will be effected;
(n) in the case of each share of common or preferred stock the
Securities include, the purchase price therefor payable to Valero, or, if those
shares are issuable on the conversion, exchange, redemption or exercise of
another Security, the consideration payable to Valero for that conversion,
exchange, redemption or exercise will not be less than the par value of that
share;
(o) in the case of stock purchase contracts the Securities include, the
Board will have established the terms of those stock purchase contracts and
approved the purchase contract agreement relating thereto, those stock purchase
contracts and that purchase contract agreement will have been duly executed and
delivered by the parties thereto, neither those stock purchase contracts nor
that purchase contract agreement will include any provision that is
unenforceable and those stock purchase contracts will have been duly issued and
delivered in accordance with the provisions of the applicable purchase agreement
under which Valero will sell those Securities; and
(p) in the case of stock purchase units the Securities include, the
Board will have established the terms of those stock purchase units and the
terms of the Securities, if any, those stock purchase units include; if those
stock purchase units include Trust Securities, those Trust Securities will be
legal, valid and binding obligations of the applicable Trust, enforceable
against the applicable Trust in accordance with their terms; if those stock
purchase units include securities other than Securities or Trust Securities,
those other securities will have been duly and
validly executed, issued and delivered by their issuer and will be legal, valid
and binding obligations of their issuer in accordance with their terms; no
agreement or other instrument establishing those stock purchase units or
defining the rights of the holders of those stock purchase units will contain
any provision that is unenforceable; and those stock purchase units will have
been duly issued and delivered in accordance with the applicable purchase
agreement under which Valero will sell those securities.
Based upon and subject to the foregoing, I am of the opinion
that:
1. Valero is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware.
2. The shares of common stock and preferred stock the Securities
include will, when issued, have been duly authorized and validly issued and will
be fully paid and nonassessable.
3. The debt securities, warrants, guarantees, stock purchase contracts
and stock purchase units the Securities include will, when issued, constitute
legal, valid and binding obligations of Valero, enforceable against Valero in
accordance with their respective terms, except as that enforcement is subject to
(a) any applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or other laws relating to or affecting
creditors' rights generally, (b) general principles of equity (regardless of
whether that enforceability is considered in a proceeding in equity or at law)
and (c) any implied covenants of good faith and fair dealing.
The opinions set forth above are limited in all respects to
matters of Texas law, the General Corporation Law of the State of Delaware and
the applicable federal laws of the United States, each as in effect on the date
hereof, and in each case, exclusive of municipal, local and county ordinances,
laws, rules and regulations. At your request, this opinion is being furnished to
you for filing as Exhibit 5.1 to the Registration Statement. Additionally, I
hereby consent to the reference to me under the caption "Legal Matters" in the
Registration Statement. In giving such consent, I do not hereby concede that I
am within the category of persons whose consent is required under Section 7 of
the Securities Act or the SEC's rules and regulations promulgated thereunder.
Very truly yours,
/s/ Jay D. Browning
Jay D. Browning
|
EXHIBIT 5.2.1
[Letterhead of Richards, Layton & Finger, P.A.]
June 18, 2004
VEC Trust III
c/o Valero Energy Corporation
One Valero Way
San Antonio, Texas 78249
Re: VEC Trust III
Ladies and Gentlemen:
We have acted as special Delaware counsel for Valero Energy
Corporation, a Delaware corporation (the "Company"), and VEC Trust III, a
Delaware statutory trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of February 26,
2002 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on February 26, 2002;
(b) The Declaration of Trust of the Trust, dated as of February 26,
2002, between the Company, as sponsor, and the trustees of the Trust named
therein;
(c) A form of Amended and Restated Declaration of Trust of the Trust
(including Exhibits A and B thereto) (the "Declaration"), to be entered into
among the Company, as sponsor, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, attached as an exhibit to the Registration Statement (as defined
below);
(d) The Registration Statement on Form S-3 (the "Registration
Statement"),
VEC Trust III
June 18, 2004
Page 2
including a prospectus (the "Prospectus"), relating to the trust preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"), as proposed to be filed by the Company, the Trust and
others with the Securities and Exchange Commission (the "SEC") on or about June
18, 2004; and
(e) A Certificate of Good Standing for the Trust, dated June 9, 2004,
obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are used as
defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, that each of the parties to
the documents examined by us has been duly created, organized or formed, as the
case may be, and is validly existing in good standing under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) that each of the parties to the documents examined by us has duly
authorized, executed and delivered such documents, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for the Preferred Security acquired by it, in
accordance with the Declaration and the Registration Statement, and (vii) that
the Preferred Securities are issued and sold to the Preferred Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
VEC Trust III
June 18, 2004
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Statutory Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the SEC as an exhibit to
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Legal Matters" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the SEC thereunder. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A
BJK/DD
|
EXHIBIT 5.2.2
[Letterhead of Richards, Layton & Finger, P.A.]
June 18, 2004
VEC Trust IV
c/o Valero Energy Corporation
One Valero Way
San Antonio, Texas 78249
Re: VEC Trust IV
Ladies and Gentlemen:
We have acted as special Delaware counsel for Valero Energy
Corporation, a Delaware corporation (the "Company"), and VEC Trust IV, a
Delaware statutory trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of February 26,
2002 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on February 26, 2002;
(b) The Declaration of Trust of the Trust, dated as of February 26,
2002, between the Company, as sponsor, and the trustees of the Trust named
therein;
(c) A form of Amended and Restated Declaration of Trust of the Trust
(including Exhibits A and B thereto) (the "Declaration"), to be entered into
among the Company, as sponsor, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, attached as an exhibit to the Registration Statement (as defined
below);
(d) The Registration Statement on Form S-3 (the "Registration
Statement"),
VEC Trust IV
June 18, 2004
Page 2
including a prospectus (the "Prospectus"), relating to the trust preferred
securities of the Trust representing undivided beneficial interests in the
assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"), as proposed to be filed by the Company, the Trust and
others with the Securities and Exchange Commission (the "SEC") on or about June
18, 2004; and
(e) A Certificate of Good Standing for the Trust, dated June 9, 2004,
obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are used as
defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, that each of the parties to
the documents examined by us has been duly created, organized or formed, as the
case may be, and is validly existing in good standing under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) that each of the parties to the documents examined by us has duly
authorized, executed and delivered such documents, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for the Preferred Security acquired by it, in
accordance with the Declaration and the Registration Statement, and (vii) that
the Preferred Securities are issued and sold to the Preferred Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
VEC Trust IV
June 18, 2004
Page 3
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Statutory Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the SEC as an exhibit to
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Legal Matters" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the SEC thereunder. Except as stated
above, without our prior written consent, this opinion may not be furnished or
quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A
BJK/DD
|
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Valero Energy
Corporation, VEC Trust III and VEC Trust IV for the registration of $3.5 billion
of their securities and to the incorporation by reference therein of our report
dated March 11, 2004, with respect to the consolidated financial statements of
Valero Energy Corporation included in its Annual Report (Form 10-K) for the year
ended December 31, 2003, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Antonio, Texas
June 18, 2004
|
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Valero Energy Corporation, VEC Trust III and VEC Trust
IV of our report dated April 10, 2003, except for paragraphs four and five of
Note 14, as to which the date is May 7, 2003, relating to the financial
statements of Orion Refining Corporation, which appears in the Current Report
on Form 8-K/A of Valero Energy Corporation filed August 12, 2003. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers
New Orleans, Louisiana
June 18, 2004
|
EXHIBIT 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Valero Energy Corporation, VEC Trust III and VEC Trust
IV of our report dated May 5, 2004, relating to the combined financial
statements of the El Paso Aruba Refining Business, which appears in the Current
Report on Form 8-K/A of Valero Energy Corporation filed May 10, 2004. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
/s/ PricewaterhouseCoopers
Houston, Texas
June 18, 2004
|
EXHIBIT 25.1
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
|
Valero Energy Corporation
(Exact name of obligor as specified in its charter)
Delaware 74-1828067
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Valero Way
San Antonio, Texas 78249
(Address of principal executive offices) (Zip code)
-------------
|
Senior Debt Securities
(Title of the indenture securities)
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
------------------------------------------------------------------------------------------------------------------
Name Address
------------------------------------------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
|
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of June, 2004.
THE BANK OF NEW YORK
By: /s/ ROBERT A. MASSIMILLO
---------------------------------
Name: ROBERT A. MASSIMILLO
Title: VICE PRESIDENT
|
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2004,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........ $ 2,589,012
Interest-bearing balances ................................. 8,872,373
Securities:
Held-to-maturity securities ............................... 1,382,393
Available-for-sale securities ............................. 21,582,893
Federal funds sold and securities purchased under
agreements to resell ......................................
Federal funds sold in domestic offices .................... 792,900
Securities purchased under agreements to resell ........... 932,155
Loans and lease financing receivables:
Loans and leases held for sale ............................ 555,415
Loans and leases, net of unearned income .................. 36,884,850
LESS: Allowance for loan and lease losses ................. 628,457
Loans and leases, net of unearned
income and allowance .................................... 36,256,393
Trading Assets ............................................... 3,654,160
Premises and fixed assets (including capitalized
leases) ................................................... 929,969
Other real estate owned ...................................... 319
Investments in unconsolidated subsidiaries and
associated companies ...................................... 247,156
Customers' liability to this bank on acceptances
outstanding ............................................... 215,581
Intangible assets
Goodwill .................................................. 2,687,623
Other intangible assets ................................... 752,283
Other assets ................................................. 7,905,137
-----------
Total assets ................................................. $89,355,762
===========
|
Dollar Amounts
In Thousands
LIABILITIES
Deposits:
In domestic offices ....................................... $33,940,195
Noninterest-bearing ....................................... 13,973,047
Interest-bearing .......................................... 19,967,148
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 22,717,175
Noninterest-bearing ....................................... 447,242
Interest-bearing .......................................... 22,269,933
Federal funds purchased and securities sold under
agreements to repurchase ................................
Federal funds purchased in domestic
offices ................................................. 442,904
Securities sold under agreements to
repurchase .............................................. 671,802
Trading liabilities .......................................... 2,452,604
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) ................................. 10,779,148
Bank's liability on acceptances executed and
outstanding ............................................... 217,705
Subordinated notes and debentures ............................ 2,390,000
Other liabilities ............................................ 7,230,967
-----------
Total liabilities ............................................ $80,842,500
===========
Minority interest in consolidated
subsidiaries .............................................. 141,523
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ................................................... 0
Common stock ................................................. 1,135,284
Surplus ...................................................... 2,080,657
Retained earnings ............................................ 5,021,014
Accumulated other comprehensive income ....................... 134,784
Other equity capital components .............................. 0
-----------
Total equity capital ......................................... 8,371,739
-----------
Total liabilities minority interest and equity capital ....... $89,355,762
===========
|
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Thomas A. Renyi }
Gerald L. Hassell } Directors
Alan R. Griffith }
|
EXHIBIT 25.2
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
|
Valero Energy Corporation
(Exact name of obligor as specified in its charter)
Delaware 74-1828067
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Valero Way
San Antonio, Texas 78249
(Address of principal executive offices) (Zip code)
-------------
|
Subordinated Debt Securities
(Title of the indenture securities)
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
----------------------------------------------------------------------------------------------
Name Address
----------------------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
|
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of June, 2004.
THE BANK OF NEW YORK
By: /s/ ROBERT A. MASSIMILLO
-------------------------------
Name: ROBERT A. MASSIMILLO
Title: VICE PRESIDENT
|
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2004,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........ $ 2,589,012
Interest-bearing balances ................................. 8,872,373
Securities:
Held-to-maturity securities ............................... 1,382,393
Available-for-sale securities ............................. 21,582,893
Federal funds sold and securities purchased under
agreements to resell ......................................
Federal funds sold in domestic offices .................... 792,900
Securities purchased under agreements to resell ........... 932,155
Loans and lease financing receivables:
Loans and leases held for sale ............................ 555,415
Loans and leases, net of unearned income .................. 36,884,850
LESS: Allowance for loan and lease losses ................. 628,457
Loans and leases, net of unearned
income and allowance .................................... 36,256,393
Trading Assets ............................................... 3,654,160
Premises and fixed assets (including capitalized
leases) ................................................... 929,969
Other real estate owned ...................................... 319
Investments in unconsolidated subsidiaries and
associated companies ...................................... 247,156
Customers' liability to this bank on acceptances
outstanding ............................................... 215,581
Intangible assets
Goodwill .................................................. 2,687,623
Other intangible assets ................................... 752,283
Other assets ................................................. 7,905,137
-----------
Total assets ................................................. $89,355,762
===========
|
Dollar Amounts
In Thousands
LIABILITIES
Deposits:
In domestic offices ....................................... $33,940,195
Noninterest-bearing ....................................... 13,973,047
Interest-bearing .......................................... 19,967,148
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 22,717,175
Noninterest-bearing ....................................... 447,242
Interest-bearing .......................................... 22,269,933
Federal funds purchased and securities sold under
agreements to repurchase ................................
Federal funds purchased in domestic
offices ................................................. 442,904
Securities sold under agreements to
repurchase .............................................. 671,802
Trading liabilities .......................................... 2,452,604
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) ................................. 10,779,148
Bank's liability on acceptances executed and
outstanding ............................................... 217,705
Subordinated notes and debentures ............................ 2,390,000
Other liabilities ............................................ 7,230,967
-----------
Total liabilities ............................................ $80,842,500
===========
Minority interest in consolidated
subsidiaries .............................................. 141,523
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ................................................... 0
Common stock ................................................. 1,135,284
Surplus ...................................................... 2,080,657
Retained earnings ............................................ 5,021,014
Accumulated other comprehensive income ....................... 134,784
Other equity capital components .............................. 0
-----------
Total equity capital ......................................... 8,371,739
-----------
Total liabilities minority interest and equity capital ....... $89,355,762
===========
|
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Thomas A. Renyi }
Gerald L. Hassell } Directors
Alan R. Griffith }
|
EXHIBIT 25.3.1
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
|
VEC Trust III
(Exact name of obligor as specified in its charter)
Delaware 75-6637349
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Valero Way
San Antonio, Texas 78249
(Address of principal executive offices) (Zip code)
-------------
|
Preferred Securities
(Title of the indenture securities)
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
----------------------------------------------------------------------------------------------------------------------------------
Name Address
----------------------------------------------------------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
|
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of June, 2004.
THE BANK OF NEW YORK
By: /s/ ROBERT A. MASSIMILLO
------------------------------
Name: ROBERT A. MASSIMILLO
Title: VICE PRESIDENT
|
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2004,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........ $ 2,589,012
Interest-bearing balances ................................. 8,872,373
Securities:
Held-to-maturity securities ............................... 1,382,393
Available-for-sale securities ............................. 21,582,893
Federal funds sold and securities purchased under
agreements to resell ......................................
Federal funds sold in domestic offices .................... 792,900
Securities purchased under agreements to resell ........... 932,155
Loans and lease financing receivables:
Loans and leases held for sale ............................ 555,415
Loans and leases, net of unearned income .................. 36,884,850
LESS: Allowance for loan and lease losses ................. 628,457
Loans and leases, net of unearned
income and allowance .................................... 36,256,393
Trading Assets ............................................... 3,654,160
Premises and fixed assets (including capitalized
leases) ................................................... 929,969
Other real estate owned ...................................... 319
Investments in unconsolidated subsidiaries and
associated companies ...................................... 247,156
Customers' liability to this bank on acceptances
outstanding ............................................... 215,581
Intangible assets
Goodwill .................................................. 2,687,623
Other intangible assets ................................... 752,283
Other assets ................................................. 7,905,137
-----------
Total assets ................................................. $89,355,762
===========
|
Dollar Amounts
In Thousands
LIABILITIES
Deposits:
In domestic offices ....................................... $33,940,195
Noninterest-bearing ....................................... 13,973,047
Interest-bearing .......................................... 19,967,148
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 22,717,175
Noninterest-bearing ....................................... 447,242
Interest-bearing .......................................... 22,269,933
Federal funds purchased and securities sold under
agreements to repurchase ................................
Federal funds purchased in domestic
offices ................................................. 442,904
Securities sold under agreements to
repurchase .............................................. 671,802
Trading liabilities .......................................... 2,452,604
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) ................................. 10,779,148
Bank's liability on acceptances executed and
outstanding ............................................... 217,705
Subordinated notes and debentures ............................ 2,390,000
Other liabilities ............................................ 7,230,967
-----------
Total liabilities ............................................ $80,842,500
===========
Minority interest in consolidated
subsidiaries .............................................. 141,523
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ................................................... 0
Common stock ................................................. 1,135,284
Surplus ...................................................... 2,080,657
Retained earnings ............................................ 5,021,014
Accumulated other comprehensive income ....................... 134,784
Other equity capital components .............................. 0
-----------
Total equity capital ......................................... 8,371,739
-----------
Total liabilities minority interest and equity capital ....... $89,355,762
===========
|
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Thomas A. Renyi }
Gerald L. Hassell } Directors
Alan R. Griffith }
|
EXHIBIT 25.3.2
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
|
VEC Trust IV
(Exact name of obligor as specified in its charter)
Delaware 75-6637350
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Valero Way
San Antonio, Texas 78249
(Address of principal executive offices) (Zip code)
-------------
|
Preferred Securities
(Title of the indenture securities)
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
--------------------------------------------------------------------------------------------------
Name Address
--------------------------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
|
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a
and 1b to Form T-1 filed with Registration Statement No. 33-21672
and Exhibit 1 to Form T-1 filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of June, 2004.
THE BANK OF NEW YORK
By: /s/ ROBERT A. MASSIMILLO
----------------------------------
Name: ROBERT A. MASSIMILLO
Title: VICE PRESIDENT
|
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2004,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........ $ 2,589,012
Interest-bearing balances ................................. 8,872,373
Securities:
Held-to-maturity securities ............................... 1,382,393
Available-for-sale securities ............................. 21,582,893
Federal funds sold and securities purchased under
agreements to resell ......................................
Federal funds sold in domestic offices .................... 792,900
Securities purchased under agreements to resell ........... 932,155
Loans and lease financing receivables:
Loans and leases held for sale ............................ 555,415
Loans and leases, net of unearned income .................. 36,884,850
LESS: Allowance for loan and lease losses ................. 628,457
Loans and leases, net of unearned
income and allowance .................................... 36,256,393
Trading Assets ............................................... 3,654,160
Premises and fixed assets (including capitalized
leases) ................................................... 929,969
Other real estate owned ...................................... 319
Investments in unconsolidated subsidiaries and
associated companies ...................................... 247,156
Customers' liability to this bank on acceptances
outstanding ............................................... 215,581
Intangible assets
Goodwill .................................................. 2,687,623
Other intangible assets ................................... 752,283
Other assets ................................................. 7,905,137
-----------
Total assets ................................................. $89,355,762
===========
|
Dollar Amounts
In Thousands
LIABILITIES
Deposits:
In domestic offices ....................................... $33,940,195
Noninterest-bearing ....................................... 13,973,047
Interest-bearing .......................................... 19,967,148
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 22,717,175
Noninterest-bearing ....................................... 447,242
Interest-bearing .......................................... 22,269,933
Federal funds purchased and securities sold under
agreements to repurchase ................................
Federal funds purchased in domestic
offices ................................................. 442,904
Securities sold under agreements to
repurchase .............................................. 671,802
Trading liabilities .......................................... 2,452,604
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) ................................. 10,779,148
Bank's liability on acceptances executed and
outstanding ............................................... 217,705
Subordinated notes and debentures ............................ 2,390,000
Other liabilities ............................................ 7,230,967
-----------
Total liabilities ............................................ $80,842,500
===========
Minority interest in consolidated
subsidiaries .............................................. 141,523
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ................................................... 0
Common stock ................................................. 1,135,284
Surplus ...................................................... 2,080,657
Retained earnings ............................................ 5,021,014
Accumulated other comprehensive income ....................... 134,784
Other equity capital components .............................. 0
-----------
Total equity capital ......................................... 8,371,739
-----------
Total liabilities minority interest and equity capital ....... $89,355,762
===========
|
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Thomas A. Renyi }
Gerald L. Hassell } Directors
Alan R. Griffith }
|
EXHIBIT 25.4.1
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
|
Valero Energy Corporation
(Exact name of obligor as specified in its charter)
Delaware 74-1828067
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Valero Way
San Antonio, Texas 78249
(Address of principal executive offices) (Zip code)
|
Guarantee of Preferred Securities of VEC Trust III
(Title of the indenture securities)
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
-------------------------------------------------------------------------------------------------------------------
Name Address
-------------------------------------------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
|
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of June, 2004.
THE BANK OF NEW YORK
By: /s/ ROBERT A. MASSIMILLO
--------------------------------
Name: ROBERT A. MASSIMILLO
Title: VICE PRESIDENT
|
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2004,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........ $ 2,589,012
Interest-bearing balances ................................. 8,872,373
Securities:
Held-to-maturity securities ............................... 1,382,393
Available-for-sale securities ............................. 21,582,893
Federal funds sold and securities purchased under
agreements to resell ......................................
Federal funds sold in domestic offices .................... 792,900
Securities purchased under agreements to resell ........... 932,155
Loans and lease financing receivables:
Loans and leases held for sale ............................ 555,415
Loans and leases, net of unearned income .................. 36,884,850
LESS: Allowance for loan and lease losses ................. 628,457
Loans and leases, net of unearned
income and allowance .................................... 36,256,393
Trading Assets ............................................... 3,654,160
Premises and fixed assets (including capitalized
leases) ................................................... 929,969
Other real estate owned ...................................... 319
Investments in unconsolidated subsidiaries and
associated companies ...................................... 247,156
Customers' liability to this bank on acceptances
outstanding ............................................... 215,581
Intangible assets
Goodwill .................................................. 2,687,623
Other intangible assets ................................... 752,283
Other assets ................................................. 7,905,137
-----------
Total assets ................................................. $89,355,762
===========
|
Dollar Amounts
In Thousands
LIABILITIES
Deposits:
In domestic offices ....................................... $33,940,195
Noninterest-bearing ....................................... 13,973,047
Interest-bearing .......................................... 19,967,148
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 22,717,175
Noninterest-bearing ....................................... 447,242
Interest-bearing .......................................... 22,269,933
Federal funds purchased and securities sold under
agreements to repurchase ................................
Federal funds purchased in domestic
offices ................................................. 442,904
Securities sold under agreements to
repurchase .............................................. 671,802
Trading liabilities .......................................... 2,452,604
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) ................................. 10,779,148
Bank's liability on acceptances executed and
outstanding ............................................... 217,705
Subordinated notes and debentures ............................ 2,390,000
Other liabilities ............................................ 7,230,967
-----------
Total liabilities ............................................ $80,842,500
===========
Minority interest in consolidated
subsidiaries .............................................. 141,523
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ................................................... 0
Common stock ................................................. 1,135,284
Surplus ...................................................... 2,080,657
Retained earnings ............................................ 5,021,014
Accumulated other comprehensive income ....................... 134,784
Other equity capital components .............................. 0
-----------
Total equity capital ......................................... 8,371,739
-----------
Total liabilities minority interest and equity capital ....... $89,355,762
===========
|
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Thomas A. Renyi }
Gerald L. Hassell } Directors
Alan R. Griffith }
|
EXHIBIT 25.4.2
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
|
Valero Energy Corporation
(Exact name of obligor as specified in its charter)
Delaware 74-1828067
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Valero Way
San Antonio, Texas 78249
(Address of principal executive offices) (Zip code)
-------------
|
Guarantee of Preferred Securities of VEC Trust IV
(Title of the indenture securities)
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
-------------------------------------------------------------------------------------------------------------
Name Address
-------------------------------------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
|
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 17th day of June, 2004.
THE BANK OF NEW YORK
By: /s/ ROBERT A. MASSIMILLO
------------------------------
Name: ROBERT A. MASSIMILLO
Title: VICE PRESIDENT
|
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 2004,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........ $ 2,589,012
Interest-bearing balances ................................. 8,872,373
Securities:
Held-to-maturity securities ............................... 1,382,393
Available-for-sale securities ............................. 21,582,893
Federal funds sold and securities purchased under
agreements to resell ......................................
Federal funds sold in domestic offices .................... 792,900
Securities purchased under agreements to resell ........... 932,155
Loans and lease financing receivables:
Loans and leases held for sale ............................ 555,415
Loans and leases, net of unearned income .................. 36,884,850
LESS: Allowance for loan and lease losses ................. 628,457
Loans and leases, net of unearned
income and allowance .................................... 36,256,393
Trading Assets ............................................... 3,654,160
Premises and fixed assets (including capitalized
leases) ................................................... 929,969
Other real estate owned ...................................... 319
Investments in unconsolidated subsidiaries and
associated companies ...................................... 247,156
Customers' liability to this bank on acceptances
outstanding ............................................... 215,581
Intangible assets
Goodwill .................................................. 2,687,623
Other intangible assets ................................... 752,283
Other assets ................................................. 7,905,137
-----------
Total assets ................................................. $89,355,762
===========
|
Dollar Amounts
In Thousands
LIABILITIES
Deposits:
In domestic offices ....................................... $33,940,195
Noninterest-bearing ....................................... 13,973,047
Interest-bearing .......................................... 19,967,148
In foreign offices, Edge and Agreement
subsidiaries, and IBFs .................................. 22,717,175
Noninterest-bearing ....................................... 447,242
Interest-bearing .......................................... 22,269,933
Federal funds purchased and securities sold under
agreements to repurchase ................................
Federal funds purchased in domestic
offices ................................................. 442,904
Securities sold under agreements to
repurchase .............................................. 671,802
Trading liabilities .......................................... 2,452,604
Other borrowed money:
(includes mortgage indebtedness and obligations
under capitalized leases) ................................. 10,779,148
Bank's liability on acceptances executed and
outstanding ............................................... 217,705
Subordinated notes and debentures ............................ 2,390,000
Other liabilities ............................................ 7,230,967
-----------
Total liabilities ............................................ $80,842,500
===========
Minority interest in consolidated
subsidiaries .............................................. 141,523
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ................................................... 0
Common stock ................................................. 1,135,284
Surplus ...................................................... 2,080,657
Retained earnings ............................................ 5,021,014
Accumulated other comprehensive income ....................... 134,784
Other equity capital components .............................. 0
-----------
Total equity capital ......................................... 8,371,739
-----------
Total liabilities minority interest and equity capital ....... $89,355,762
===========
|
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.
Thomas J. Mastro,
Senior Vice President and Comptroller
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.
Thomas A. Renyi }
Gerald L. Hassell } Directors
Alan R. Griffith }
|