LAKELAND FINANCIAL CORPORATION,
as Issuer
INDENTURE
Dated as of October 1, 2003
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
DUE 2033
TABLE OF CONTENTS
INDENTURE 1
ARTICLE I DEFINITIONS................................................1
Section 1.1. Definitions................................................1
ARTICLE II. DEBENTURES.................................................9
Section 2.1. Authentication and Dating..................................9
Section 2.2. Form of Trustee's Certificate of Authentication...........10
Section 2.3. Form and Denomination of Debentures.......................10
Section 2.4. Execution of Debentures...................................10
Section 2.5. Exchange and Registration of Transfer of Debentures.......10
Section 2.6. Mutilated, Destroyed, Lost or Stolen Debentures...........13
Section 2.7. Temporary Debentures......................................14
Section 2.8. Payment of Interest and Additional Interest...............14
Section 2.9. Cancellation of Debentures Paid, etc......................16
Section 2.10. Computation of Interest Rate..............................16
Section 2.11. Extension of Interest Payment Period......................18
Section 2.12. CUSIP Numbers.............................................19
Section 2.13. Global Debentures.........................................19
ARTICLE III. PARTICULAR COVENANTS OF THE COMPANY.......................21
Section 3.1. Payment of Principal, Premium and Interest; Agreed
Treatment of the Debentures...............................21
Section 3.2. Offices for Notices and Payments, etc.....................22
Section 3.3. Appointments to Fill Vacancies in Trustee's Office........23
Section 3.4. Provision as to Paying Agent..............................23
Section 3.5. Certificate to Trustee....................................24
Section 3.6. Additional Sums...........................................24
Section 3.7. Compliance with Consolidation Provisions..................24
Section 3.8. Limitation on Dividends...................................24
Section 3.9. Covenants as to the Trust.................................25
Section 3.10. Additional Junior Indebtedness............................25
ARTICLE IV. SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE................................26
Section 4.1. Securityholders' Lists....................................26
Section 4.2. Preservation and Disclosure of Lists......................26
ARTICLE V. REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT...............................27
Section 5.1. Events of Default.........................................27
Section 5.2. Payment of Debentures on Default, Suit Therefor...........29
Section 5.3. Application of Moneys Collected by Trustee................31
Section 5.4. Proceedings by Securityholders............................31
Section 5.5. Proceedings by Trustee....................................32
Section 5.6. Remedies Cumulative and Continuing; Delay or Omission
Not a Waiver..............................................32
Section 5.7. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders...............................32
Section 5.8. Notice of Defaults........................................33
Section 5.9. Undertaking, to Pay Costs.................................33
ARTICLE VI. CONCERNING THE TRUSTEE....................................34
Section 6.1. Duties and Responsibilities of Trustee....................34
Section 6.2. Reliance on Documents, Opinions, etc......................35
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Section 6.3. No Responsibility for Recitals, etc.......................36
Section 6.4. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debentures...........36
Section 6.5. Moneys to be Held in Trust................................36
Section 6.6. Compensation and Expenses of Trustee......................36
Section 6.7. Officers' Certificate as Evidence.........................37
Section 6.8. Eligibility of Trustee....................................37
Section 6.9. Resignation or Removal of Trustee.........................38
Section 6.10. Acceptance by Successor Trustee...........................39
Section 6.11. Succession by Merger, etc.................................40
Section 6.12. Authenticating Agents.....................................40
ARTICLE VII. CONCERNING THE SECURITYHOLDERS............................41
Section 7.1. Action by Securityholders.................................41
Section 7.2. Proof of Execution by Securityholders.....................42
Section 7.3. Who Are Deemed Absolute Owners............................42
Section 7.4. Debentures Not Outstanding................................42
Section 7.5. Revocation of Consents; Future Holders Bound..............43
ARTICLE VIII. SECURITYHOLDERS' MEETINGS.................................43
Section 8.1. Purposes of Meetings......................................43
Section 8.2. Call of Meetings by Trustee...............................44
Section 8.3. Call of Meetings by Company or Securityholders............44
Section 8.4. Qualifications for Voting.................................44
Section 8.5. Regulations...............................................44
Section 8.6. Voting....................................................45
Section 8.7. Quorum; Actions...........................................45
ARTICLE IX. SUPPLEMENTAL INDENTURES...................................46
Section 9.1. Supplemental Indentures without Consent of
Securityholders...........................................46
Section 9.2. Supplemental Indentures with Consent of Securityholders...47
Section 9.3. Effect of Supplemental Indentures.........................48
Section 9.4. Notation on Debentures....................................48
Section 9.5. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee......................................49
ARTICLE X. REDEMPTION OF SECURITIES..................................49
Section 10.1. Optional Redemption.......................................49
Section 10.2. Special Event Redemption..................................49
Section 10.3. Notice of Redemption; Selection of Debentures.............49
Section 10.4. Payment of Debentures Called for Redemption...............50
ARTICLE XI. CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.........51
Section 11.1. Company May Consolidate, etc., on Certain Terms...........51
Section 11.2. Successor Entity to be Substituted........................51
Section 11.3. Opinion of Counsel to be Given to Trustee.................51
ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE...................52
Section 12.1. Discharge of Indenture....................................52
Section 12.2. Deposited Moneys to be Held in Trust by Trustee...........52
Section 12.3. Paying Agent to Repay Moneys Held.........................52
Section 12.4. Return of Unclaimed Moneys................................53
ARTICLE XIII. IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS.................................................53
Section 13.1. Indenture and Debentures Solely Corporate Obligations.....53
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ARTICLE XIV. MISCELLANEOUS PROVISIONS..................................53
Section 14.1. Successors................................................53
Section 14.2. Official Acts by Successor Entity.........................53
Section 14.3. Surrender of Company Powers...............................53
Section 14.4. Addresses for Notices, etc................................54
Section 14.5. Governing, Law............................................54
Section 14.6. Evidence of Compliance with Conditions Precedent..........54
Section 14.7. Non-Business Days.........................................54
Section 14.8. Table of Contents, Headings, etc..........................55
Section 14.9. Execution in Counterparts.................................55
Section 14.10. Separability..............................................55
Section 14.11. Assignment................................................55
Section 14.12. Acknowledgment of Rights..................................55
ARTICLE XV. SUBORDINATION OF DEBENTURES...............................55
Section 15.1. Agreement to Subordinate..................................55
Section 15.2. Default on Senior Indebtedness............................56
Section 15.3 Liquidation, Dissolution, Bankruptcy......................56
Section 15.4. Subrogation...............................................57
Section 15.5. Trustee to Effectuate Subordination.......................58
Section 15.6. Notice by the Company.....................................58
Section 15.7. Rights of the Trustee; Holders of Senior Indebtedness.....59
Section 15.8. Subordination May Not Be Impaired.........................59
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INDENTURE
THIS INDENTURE, dated as of October 1, 2003, between Lakeland
Financial Corporation, an Indiana corporation (the "Company"), and U.S. Bank
National Association, a national banking association organized under the laws
of the United States of America, as debenture trustee (the "Trustee").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its Floating Rate Junior Subordinated Deferrable
Interest Debentures due 2033 (the "Debentures") under this Indenture to
provide, among other things, for the execution and authentication, delivery
and administration thereof, and the Company has duly authorized the execution
of this Indenture; and
WHEREAS, all acts and things necessary to make this Indenture a valid
agreement according to its terms, have been done and performed;
NOW, THEREFORE, This Indenture Witnesseth:
In consideration of the premises, and the purchase of the Debentures
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to
time of the Debentures as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. The terms defined in this Section 1.1
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.1. All
accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted accounting
principles and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted in the United States at the
time of any computation. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Additional Interest" means interest, if any, that shall accrue on
any interest on the Debentures the payment of which has not been made on the
applicable Interest Payment Date and which shall accrue at the Interest Rate,
compounded quarterly (to the extent permitted by law).
"Additional Junior Indebtedness" means, without duplication and other
than the Debentures, any indebtedness, liabilities or obligations of the
Company, or any Affiliate of the Company, under debt securities (or guarantees
in respect of debt securities) initially issued to any trust, or a trustee of
a trust, partnership or other entity affiliated with the Company that is,
directly or indirectly, a finance subsidiary (as such term is defined in Rule
3a-5 under the Investment Company Act of 1940) or other financing vehicle of
the Company or any Affiliate of the Company in connection with the issuance by
that entity of preferred securities or other securities that are eligible to
qualify for Tier 1 capital treatment (or its then equivalent) for purposes of
the capital adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Company (or, if the Company is not a bank holding company,
such guidelines applied to the Company as if the Company were subject to such
guidelines); provided, however, that the inability of the Company to treat all
or any portion of the Additional Junior Indebtedness as Tier 1 capital shall
not disqualify it as Additional Junior Indebtedness if such inability results
from the Company having cumulative preferred stock, minority interests in
consolidated subsidiaries, or any other class of security or interest which
the Federal Reserve now or may hereafter accord Tier 1 capital treatment
(including the Debentures) in excess of the amount which may qualify for
treatment as Tier 1 capital under applicable capital adequacy guidelines.
"Additional Sums" has the meaning set forth in Section 3.6.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Applicable Depository Procedures" means, with respect to any
transfer or transaction involving a Global Debenture or beneficial interest
therein, the rules and procedures of the Depositary for such Debenture, in
each case to the extent applicable to such transaction and as in effect from
time to time.
"Authenticating Agent" means any agent or agents of the Trustee which
at the time shall be appointed and acting pursuant to Section 6.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors or the executive
committee or any other duly authorized designated officers 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 Saturday, Sunday or any
other day on which banking institutions in the city in which the Company's
principal place of business is located, New York City or Hartford, Connecticut
are permitted or required by any applicable law to close.
"Capital Securities" means undivided beneficial interests in the
assets of Lakeland Statutory Trust II which rank pari passu with Common
Securities issued by the Trust; provided, however, that upon the occurrence of
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an Event of Default (as defined in the Declaration), the rights of holders of
such Common Securities to payment in respect of distributions and payments
upon liquidation, redemption and otherwise are subordinated to the rights of
holders of such Capital Securities.
"Capital Securities Guarantee" means the guarantee agreement that the
Company enters into with U.S. Bank National Association, as guarantee trustee,
or other Persons that operates directly or indirectly for the benefit of
holders of Capital Securities of the Trust.
"Capital Treatment Event" means the receipt by the Company and the
Trust of an opinion of counsel experienced in such matters to the effect that,
as a result of the occurrence of any amendment to, or change (including any
announced prospective change) in, the laws, rules or regulations of the United
States or any political subdivision thereof or therein, or as the result of
any official or administrative pronouncement or action or decision
interpreting or applying such laws, rules or regulations, which amendment or
change is effective or which pronouncement, action or decision is announced on
or after the date of original issuance of the Debentures, there is more than
an insubstantial risk that the Company will not, within 90 days of the date of
such opinion be entitled to treat an amount equal to the aggregate liquidation
amount of the Debentures as "Tier 1 Capital" (or its then equivalent) for
purposes of the capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company (or if the Company is not a bank holding
company, such guidelines applied to the Company as if the Company were subject
to such guidelines); provided, however, that the inability of the Company to
treat all or any portion of the liquidation amount of the Debentures as Tier 1
Capital shall not constitute the basis for a Capital Treatment Event, if such
inability results from the Company having cumulative preferred stock, minority
interests in consolidated subsidiaries, or any other class of security or
interest which the Federal Reserve or OTS, as applicable, may now or hereafter
accord Tier 1 Capital treatment in excess of the amount which may now or
hereafter qualify for treatment as Tier 1 Capital under applicable capital
adequacy guidelines; provided further, however, that the distribution of
Debentures in connection with the liquidation of the Trust shall not in and of
itself constitute a Capital Treatment Event unless such liquidation shall have
occurred in connection with a Tax Event or an Investment Company Event.
"Certificate" means a certificate signed by any one of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company.
"Common Securities" means undivided beneficial interests in the
assets of the Trust which rank pari passu with Capital Securities issued by
the Trust; provided, however, that upon the occurrence of an Event of Default
(as defined in the Declaration), the rights of holders of such Common
Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of
holders of such Capital Securities.
"Company" means Lakeland Financial Corporation, an Indiana
corporation, and, subject to the provisions of Article XI, shall include its
successors and assigns.
"Company Order" means a written order signed in the name of the
Company by its Chairman of the Board of Directors, Vice Chairman, Chief
3
Executive Officer, President, Chief Financial Officer, one of its Managing
Directors or one of its Executive Vice Presidents, Senior Vice Presidents or
Vice Presidents, and delivered to the Trustee.
"Coupon Rate" has the meaning set forth in Section 2.8.
"Debenture" or "Debentures" has the meaning stated in the first
recital of this Indenture.
"Debenture Register" has the meaning specified in Section 2.5.
"Declaration" means the Amended and Restated Declaration of Trust of
the Trust, as amended or supplemented from time to time.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 2.8.
"Depositary" means an organization registered as a clearing agency
under the Exchange Act that is designated as Depositary by the Company or any
successor thereto. DTC will be the initial Depositary.
"Distribution Period" has the meaning set forth in Section 2.8.
"Determination Date" has the meaning set forth in Section 2.10.
"Depository Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.
"DTC" means The Depository Trust Company, a New York corporation.
"Event of Default" means any event specified in Section 5.1,
continued for the period of time, if any, and after the giving of the notice,
if any, therein designated.
"Extension Period" has the meaning set forth in Section 2.11.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System and any successor federal agency that is primarily responsible for
regulating the activities of bank holding companies.
"Global Debenture" means a security that evidences all or part of the
Debentures, the ownership and transfers of which shall be made through book
entries by a Depositary.
"Indenture" means this instrument as originally executed or, if
amended or supplemented as herein provided, as so amended or supplemented, or
both.
"Institutional Trustee" has the meaning set forth in the Declaration.
4
"Interest Payment Date" means each March 31, June 30, September 30
and December 31 during the term of this Indenture and on the Maturity Date.
"Interest Rate" means for the period beginning on (and including) the
date of original issuance and ending on (but excluding) December 31, 2003 the
rate per annum of 4.21% and for each Distribution Period thereafter, the
Coupon Rate.
"Investment Company Event" means the receipt by the Company and the
Trust of an opinion of counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or written
change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Trust is or will be considered an "investment company" that is required to
be registered under the Investment Company Act of 1940, as amended, which
change or prospective change becomes effective or would become effective, as
the case may be, on or after the date of the issuance of the Debentures.
"Liquidation Amount" means the stated amount of $1,000.00 per Trust
Security.
"Maturity Date" means October 1, 2033.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman, the Chief Executive Officer, the President, the
Chief Financial Officer, any Managing Director or any Vice President, and by
the Treasurer, an Assistant Treasurer, the Comptroller, an Assistant
Comptroller, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 14.6 if and to the extent required by the provisions
of such Section.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or may be other
counsel reasonably satisfactory to the Trustee. Each such opinion shall
include the statements provided for in Section 14.6 if and to the extent
required by the provisions of such Section.
"OTS" means the Office of Thrift Supervision and any successor
federal agency that is primarily responsible for regulating the activities of
savings and loan holding companies.
"Outstanding" means, when used with reference to Debentures, subject
to the provisions of Section 7.4, as of any particular time, all Debentures
authenticated and delivered by the Trustee or the Authenticating Agent under
this Indenture, except:
(a) Debentures theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, for the payment or redemption of
which moneys in the necessary amount shall have been deposited in trust with
5
the Trustee or with any paying agent (other than the Company) or shall have
been set aside and segregated in trust by the Company (if the Company shall
act as its own paying agent); provided, however, that, if such Debentures, or
portions thereof, are to be redeemed prior to maturity thereof, notice of such
redemption shall have been given as provided in Section 10.3 or provision
satisfactory to the Trustee shall have been made for giving such notice;
(c) Debentures paid pursuant to Section 2.6 or in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.6 unless proof satisfactory to
the Company and the Trustee is presented that any such Debentures are held by
bona fide holders in due course; and
(d) Debentures held in accordance with Section 7.4 hereof.
"Person" means an individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.6 in
lieu of a lost, destroyed or stolen Debenture shall be deemed to evidence the
same debt as the lost, destroyed or stolen Debenture.
"Principal Office of the Trustee," or other similar term, means the
office of the Trustee, at which at any particular time its corporate trust
business shall be principally administered, which at the time of the execution
of this Indenture shall be 225 Asylum Street, Goodwin Square, Hartford,
Connecticut 06103.
"Redemption Date" means the Interest Payment Date fixed for the
redemption of Debentures.
"Redemption Price" means 100% of the principal amount of the
Debentures being redeemed, plus accrued and unpaid interest on such Debentures
to the Redemption Date.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Principal Office of the Trustee, including any vice-president, any
assistant vice-president, any secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or other officer of the
Principal Trust Office 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 that officer's knowledge of and familiarity
with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
6
"Securityholder," "holder of Debentures," or other similar terms,
means any Person in whose name at the time a particular Debenture is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Senior Indebtedness" means, with respect to the Company, whether
incurred on or prior to the date of this Indenture or thereafter incurred, (i)
the principal, premium, if any, and interest in respect of (A) indebtedness of
the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company;
(ii) all capital lease obligations of the Company; (iii) all obligations of
the Company issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations of the Company
under any title retention agreement; (iv) all obligations of the Company for
the reimbursement of any letter of credit, any banker's acceptance, any
security purchase facility, any repurchase agreement or similar arrangement,
any interest rate swap, any other hedging arrangement, any obligation under
options or any similar credit or other transaction; (v) all obligations of the
type referred to in clauses (i) through (iv) above of other Persons for the
payment of which the Company is responsible or liable as obligor, guarantor or
otherwise; and (vi) all obligations of the type referred to in clauses (i)
through (v) above of other Persons secured by any lien on any property or
asset of the Company (whether or not such obligation is assumed by the
Company). Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (1) any Additional Junior Indebtedness, (2) Debentures issued pursuant
to this Indenture and guarantees in respect of such Debentures, (3) trade
accounts payable of the Company arising in the ordinary course of business
(such trade accounts payable being pari passu in right of payment to the
Debentures), or (4) obligations with respect to which (a) in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is provided that such obligations are pari passu, junior or otherwise not
superior in right of payment to the Debentures and (b) the Company, prior to
the issuance thereof, has notified (and, if then required under the applicable
guidelines of the regulating entity, has received approval from) the Federal
Reserve (if the Company is a bank holding company) or the OTS (if the Company
is a savings and loan holding company). Senior Indebtedness shall continue to
be Senior Indebtedness and be entitled to the subordination provisions
irrespective of any amendment, modification or waiver of any term of such
Senior Indebtedness.
"Special Event" means any of a Capital Treatment Event, an Investment
Company Event or a Tax Event.
"Subsidiary" means with respect to any Person, (i) any corporation
at least a majority of the outstanding voting stock of which is owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture, limited liability company or similar entity, at
least a majority of the outstanding partnership or similar interests of which
shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii)
any limited partnership of which such Person or any of its Subsidiaries is a
general partner. For the purposes of this definition, "voting stock" means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
7
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
"Tax Event" means the receipt by the Company and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to or change (including any announced prospective change) in
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement (including any private letter ruling,
technical advice memorandum, field service advice, regulatory procedure,
notice or announcement, including any notice or announcement of intent to
adopt such procedures or regulations (an "Administrative Action")) or judicial
decision interpreting or applying such laws or regulations, regardless of
whether such Administrative Action or judicial decision is issued to or in
connection with a proceeding involving the Company or the Trust and whether or
not subject to review or appeal, which amendment, clarification, change,
Administrative Action or decision is enacted, promulgated or announced, in
each case on or after the date of original issuance of the Debentures, there
is more than an insubstantial risk that: (i) the Trust is, or will be within
90 days of the date of such opinion, subject to United States federal income
tax with respect to income received or accrued on the Debentures; (ii)
interest payable by the Company on the Debentures is not, or within 90 days of
the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States federal income tax purposes; or (iii) the Trust is,
or will be within 90 days of the date of such opinion, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
Provided, however, if the Company may eliminate the results described in (i)
through (iii) of such Administrative Action or judicial decision interpreting
or applying such laws or regulations by taking some ministerial action, such
as filing a form or making an election, or pursuing some other similar
reasonable measure which has no adverse effect on the Company, the Trustee,
the Trust or the Holders of the Capital Securities issued by the Trust, such
Administrative Action or judicial decision shall not be deemed a Tax Event.
"3-Month LIBOR" has the meaning set forth in Section 2.10.
"Telerate Page 3750" has the meaning set forth in Section 2.10.
"Trust" shall mean Lakeland Statutory Trust II, a Connecticut
statutory trust, or any other similar trust created for the purpose of issuing
Capital Securities in connection with the issuance of Debentures under this
Indenture, of which the Company is the sponsor.
"Trust Agreement" means the Amended and Restated Declaration of
Trust, dated October 1, 2003, by and among U.S. Bank National Association, as
Institutional Trustee, Lakeland Financial Corporation, as Sponsor, and the
Administrators named therein, and any amendments or supplements thereto.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Securities" means Common Securities and Capital Securities of
the Trust.
8
"Trustee" means U.S. Bank National Association, and, subject to the
provisions of Article VI hereof, shall also include its successors and assigns
as Trustee hereunder.
ARTICLE II.
DEBENTURES
Section 2.1. Authentication and Dating. Upon the execution and
delivery of this Indenture, or from time to time thereafter, Debentures in an
aggregate principal amount not in excess of $30,928,000 may be executed and
delivered by the Company to the Trustee for authentication, and the Trustee
shall thereupon authenticate and make available for delivery said Debentures
to or upon the written order of the Company, signed by its Chairman of the
Board of Directors, Vice Chairman, the Chief Executive Officer, the President,
the Chief Financial Officer, one of its Managing Directors or one of its Vice
Presidents without any further action by the Company hereunder. In
authenticating such Debentures, and accepting the additional responsibilities
under this Indenture in relation to such Debentures, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon:
(a) a copy of any Board Resolution or Board Resolutions relating
thereto and, if applicable, an appropriate record of any action taken pursuant
to such resolution, in each case certified by the Secretary or an Assistant
Secretary of the Company, as the case may be and
(b) an Opinion of Counsel prepared in accordance with Section 14.6
which shall also state:
(1) that such Debentures, when authenticated and delivered
by the Trustee and issued by the Company in each case in the manner and
subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company, subject to or
limited by applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, moratorium and other statutory or decisional laws relating to or
affecting creditors' rights or the reorganization of financial institutions
(including, without limitation, preference and fraudulent conveyance or
transfer laws), heretofore or hereafter enacted or in effect, affecting the
rights of creditors generally; and
(2) that all laws and requirements in respect of the
execution and delivery by the Company of the Debentures have been complied
with and that authentication and delivery of the Debentures by the Trustee
will not violate the terms of this Indenture.
The Trustee shall have the right to decline to authenticate and
deliver any Debentures under this Section if the Trustee, being advised in
writing by counsel, determines that such action may not lawfully be taken or
if a Responsible Officer of the Trustee in good faith shall determine that
such action would expose the Trustee to personal liability to existing
holders.
The definitive Debentures shall be typed, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Debentures, as evidenced by their
execution of such Debentures.
9
Section 2.2. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Debentures shall be in
substantially the following form:
This is one of the Debentures referred to in the within-mentioned
Indenture.
U.S. Bank National Association, as Trustee
By
--------------------------------------------
Authorized Signer
Section 2.3. Form and Denomination of Debentures. The Debentures
shall be substantially in the form of Exhibit A attached hereto. The
Debentures shall be in registered, certificated form without coupons and in
minimum denominations of $500,000.00 and any multiple of $1,000.00 in excess
thereof. Any attempted transfer of the Debentures in a block having an
aggregate principal amount of less than $500,000.00 shall be deemed to be void
and of no legal effect whatsoever. Any such purported transferee shall be
deemed not to be a holder of such Debentures for any purpose, including, but
not limited to the receipt of payments on such Debentures, and such purported
transferee shall be deemed to have no interest whatsoever in such Debentures.
The Debentures shall be numbered, lettered, or otherwise distinguished in such
manner or in accordance with such plans as the officers executing the same may
determine with the approval of the Trustee as evidenced by the execution and
authentication thereof.
Section 2.4. Execution of Debentures. The Debentures shall be signed
in the name and on behalf of the Company by the manual or facsimile signature
of its Chairman of the Board of Directors, Vice Chairman, Chief Executive
Officer, President, Chief Financial Officer, one of its Managing Directors or
one of its Executive Vice Presidents, Senior Vice Presidents or Vice
Presidents. Only such Debentures as shall bear thereon a certificate of
authentication substantially in the form herein before recited, executed by
the Trustee or the Authenticating Agent by the manual signature of an
authorized signer, shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Trustee or the
Authenticating Agent upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed
shall have been authenticated and delivered by the Trustee or the
Authenticating Agent, or disposed of by the Company, such Debentures
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debentures had not ceased to be such officer of the
Company; and any Debenture may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such Debenture, shall be
the proper officers of the Company, although at the date of the execution of
this Indenture any such person was not such an officer.
Every Debenture shall be dated the date of its authentication.
Section 2.5. Exchange and Registration of Transfer of Debentures. The
Company shall cause to be kept, at the office or agency maintained for the
purpose of registration of transfer and for exchange as provided in Section
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3.2, a register (the "Debenture Register") for the Debentures issued hereunder
in which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration and transfer of all Debentures as
in this Article II provided. The Debenture Register shall be in written form
or in any other form capable of being converted into written form within a
reasonable time.
Debentures to be exchanged may be surrendered at the Principal Office
of the Trustee or at any office or agency to be maintained by the Company for
such purpose as provided in Section 3.2, and the Company shall execute, the
Company or the Trustee shall register and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in exchange therefor
the Debenture or Debentures which the Securityholder making the exchange shall
be entitled to receive. Upon due presentment for registration of transfer of
any Debenture at the Principal Office of the Trustee or at any office or
agency of the Company maintained for such purpose as provided in Section 3.2,
the Company shall execute, the Company or the Trustee shall register and the
Trustee or the Authenticating Agent shall authenticate and make available for
delivery in the name of the transferee or transferees a new Debenture for a
like aggregate principal amount. Registration or registration of transfer of
any Debenture by the Trustee or by any agent of the Company appointed pursuant
to Section 3.2, and delivery of such Debenture, shall be deemed to complete
the registration or registration of transfer of such Debenture.
All Debentures presented for registration of transfer or for exchange
or payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee or the Authenticating Agent duly executed by the holder or his
attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debentures, but the Company or the Trustee may require payment of
a sum sufficient to cover any tax, fee or other governmental charge that may
be imposed in connection therewith.
The Company or the Trustee shall not be required to exchange or
register a transfer of any Debenture for a period of 15 days next preceding
the date of selection of Debentures for redemption.
Notwithstanding anything herein to the contrary, Debentures may not
be transferred except in compliance with the restricted securities legend set
forth below, unless otherwise determined by the Company, upon the advice of
counsel experienced in securities law, in accordance with applicable law:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
11
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT
IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE")
(EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION
OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i)
IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF
ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR
OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY
OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN
TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A
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PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $500,000.00 AND
MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS
SECURITY IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN
$500,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE
FOREGOING RESTRICTIONS.
Section 2.6. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company shall execute, and upon its written request the Trustee shall
authenticate and deliver, a new Debenture bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Debenture, or in lieu of and in substitution for the Debenture so destroyed,
lost or stolen. In every case the applicant for a substituted Debenture shall
furnish to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company
and the Trustee evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.
The Trustee may authenticate any such substituted Debenture and
deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substituted Debenture, 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
connected therewith. In case any Debenture which has matured or is about to
mature or has been called for redemption in full shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute
Debenture, pay or authorize the payment of the same (without surrender thereof
except in the case of a mutilated Debenture) if the applicant for such payment
shall furnish to the Company and the Trustee such security or indemnity as may
be required by them to save each of them harmless and, in case of destruction,
loss or theft, evidence satisfactory to the Company and to the Trustee of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Every substituted Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any such Debenture is destroyed, lost
or stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Debenture shall be found
at any time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debentures duly issued
hereunder. All Debentures shall be held and owned upon the express condition
that, to the extent permitted by applicable law, the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debentures and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to
13
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
Section 2.7. Temporary Debentures. Pending the preparation of
definitive Debentures, the Company may execute and the Trustee shall
authenticate and make available for delivery temporary Debentures that are
typed, printed or lithographed. Temporary Debentures shall be issuable in any
authorized denomination, and substantially in the form of the definitive
Debentures in lieu of which they are issued but with such omissions,
insertions and variations as may be appropriate for temporary Debentures, all
as may be determined by the Company. Every such temporary Debenture shall be
executed by the Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Debentures. Without unreasonable delay the Company will execute
and deliver to the Trustee or the Authenticating Agent definitive Debentures
and thereupon any or all temporary Debentures may be surrendered in exchange
therefor, at the principal corporate trust office of the Trustee or at any
office or agency maintained by the Company for such purpose as provided in
Section 3.2, and the Trustee or the Authenticating Agent shall authenticate
and make available for delivery in exchange for such temporary Debentures a
like aggregate principal amount of such definitive Debentures. Such exchange
shall be made by the Company at its own expense and without any charge
therefor except that in case of any such exchange involving a registration of
transfer the Company may require payment of a sum sufficient to cover any tax,
fee or other governmental charge that may be imposed in relation thereto.
Until so exchanged, the temporary Debentures shall in all respects be entitled
to the same benefits under this Indenture as definitive Debentures
authenticated and delivered hereunder.
Section 2.8. Payment of Interest and Additional Interest. Interest at
the Interest Rate and any Additional Interest on any Debenture that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date for Debentures shall be paid to the Person in whose name said Debenture
(or one or more Predecessor Securities) is registered at the close of business
on the regular record date for such interest installment except that interest
and any Additional Interest payable on the Maturity Date shall be paid to the
Person to whom principal is paid. In the event that any Debenture or portion
thereof is called for redemption and the Redemption Date is subsequent to a
regular record date with respect to any Interest Payment Date and prior to
such Interest Payment Date, interest on such Debenture will be paid upon
presentation and surrender of such Debenture.
Each Debenture shall bear interest for the period beginning on (and
including) the date of original issuance and ending on (but excluding)
December 31, 2003 at a rate per annum of 4.21%, and shall bear interest for
each successive period beginning on (and including) December 31, 2003, and
each succeeding Interest Payment Date, and ending on (but excluding) the next
succeeding Interest Payment Date (each, a "Distribution Period") at a rate per
annum equal to the 3-Month LIBOR, determined as described in Section 2.10,
plus 3.05% (the "Coupon Rate"), applied to the principal amount thereof, until
the principal thereof becomes due and payable, and on any overdue principal
and to the extent that payment of such interest is enforceable under
applicable law (without duplication) on any overdue installment of interest at
the Interest Rate compounded quarterly. Interest shall be payable (subject to
14
any relevant Extension Period) quarterly in arrears on each Interest Payment
Date with the first installment of interest to be paid on December 31, 2003.
In the event that the 3-Month LIBOR is indeterminable by the methods
described in Section 2.10, the Coupon Rate shall equal the 3-Month LIBOR in
effect on the most recent Determination Date (whether or not 3-Month LIBOR for
such period was in fact determined on such Determination Date) plus 3.05%.
Any interest on any Debenture, including Additional Interest, that is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the registered holder on the relevant regular record date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Company to the Persons in whose names such Debentures (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 at
least 25 days prior to the date of the proposed payment of the amount of
Defaulted Interest proposed to be paid on each such Debenture and the date of
the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 nor less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payments. The Trustee shall promptly
notify the Company of such special record date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at its address as it appears in
the Debenture Register, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Debentures (or their
respective Predecessor Securities) are registered on such special record date
and shall be no longer payable.
The Company may make payment of any Defaulted Interest on any
Debentures in any other lawful manner after notice given by the Company to the
Trustee of the proposed payment method, provided, however, the Trustee in its
sole discretion deems such payment method to be practical.
Any interest scheduled to become payable on an Interest Payment Date
occurring during an Extension Period shall not be Defaulted Interest and shall
be payable on such other date as may be specified in the terms of such
Debentures.
The term "regular record date" as used in this Section shall mean the
close of business on the 15th day next preceding the applicable Interest
Payment Date.
15
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debenture.
Section 2.9. Cancellation of Debentures Paid, etc. All Debentures
surrendered for the purpose of payment, redemption, exchange or registration
of transfer, shall, if surrendered to the Company or any paying agent, be
surrendered to the Trustee and promptly canceled by it, or, if surrendered to
the Trustee or any Authenticating Agent, shall be promptly canceled by it, and
no Debentures shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Indenture. All Debentures canceled by any
Authenticating Agent shall be delivered to the Trustee. The Trustee shall
destroy all canceled Debentures unless the Company otherwise directs the
Trustee in writing. If the Company shall acquire any of the Debentures,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Debentures unless and until the same are
surrendered to the Trustee for cancellation.
Section 2.10. Computation of Interest Rate. The amount of interest
payable for the Distribution Period commencing on December 31, 2003 and each
succeeding Distribution Period will be calculated by applying the Interest
Rate to the principal amount outstanding at the commencement of the
Distribution Period and multiplying each such amount by the actual number of
days in the Distribution Period concerned divided by 360. In the event that
any date on which interest is payable on the Debentures is not a Business Day,
then payment of interest payable on such date shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on the date such payment was originally payable. All percentages
resulting from any calculations on the Debentures will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward (e.g., 9.876545% or
..09876545 being rounded to 9.87655% or .0987655) and all dollar amounts used
in or resulting from such calculation will be rounded to the nearest cent,
with one-half cent being rounded upward.
(a) "3-Month LIBOR" means the London interbank offered rate for
three-month, U.S. dollar deposits determined by the Trustee in the following
order of priority:
(1) the rate (expressed as a percentage per annum) for U.S.
dollar deposits of an amount equal or comparable to the aggregate liquidation
amount of the Debentures having a three-month maturity that appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the particular
Determination Date (as defined below). "Telerate Page 3750" means the display
designated as "Page 3750" on the Dow Jones Telerate Service or such other page
as may replace Page 3750 on that service or such other service or services as
may be nominated by the British Bankers' Association as the information vendor
for the purpose of displaying London interbank offered rates for U.S. dollars
deposits;
(2) if such rate does not appear on Telerate Page 3750 as of
11:00 a.m. (London time) on the Determination Date, 3-Month LIBOR will be the
16
arithmetic mean of the rates (expressed as percentages per annum) for U.S.
dollar deposits of an amount equal or comparable to the aggregate liquidation
amount of the Debentures having a three-month maturity that appear on Reuters
Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m. (London
time) on such Determination Date;
(3) if such rate does not appear on Reuters Page LIBO as of
11:00 a.m. (London time) on the related Determination Date, the Trustee will
request the principal London offices of four leading banks in the London
interbank market to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits of an amount equal or comparable to the aggregate liquidation
amount of the Debentures having a three-month maturity as of 11:00 a.m.
(London time) on such Determination Date. If at least two quotations are
provided, 3-Month LIBOR will be the arithmetic mean of such quotations; and
(4) if fewer than two such quotations are provided as
requested in clause (3) above, the Trustee will request four major New York
City banks to provide such banks' offered quotations (expressed as percentages
per annum) to leading European banks for loans in U.S. dollars of an amount
equal or comparable to the aggregate liquidation amount of the Debentures as
of 11:00 a.m. (London time) on such Determination Date. If at least two such
quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations.
If the rate for U.S. dollar deposits of an amount equal or comparable
to the aggregate liquidation amount of the Debentures having a three-month
maturity that initially appears on Telerate Page 3750 or Reuters Page LIBO, as
the case may be, as of 11:00 a.m. (London time) on the related Determination
Date is superseded on the Telerate page 3750 or Reuters Page LIBO, as the case
may be, by a corrected rate by 12:00 noon (London time) on such Determination
Date, then the corrected rate as so substituted on the applicable page will be
the applicable 3-Month LIBOR for such Determination Date.
(5) The Coupon Rate for any Distribution Period will at no
time be higher than the maximum rate then permitted by New York law as the
same may be modified by United States law.
"Determination Date" means the date that is two London Banking Days
(i.e., a business day in which dealings in deposits in U.S. dollars are
transacted in the London interbank market) preceding the particular
Distribution Period for which a Coupon Rate is being determined.
(b) The Trustee shall notify the Company, the Institutional Trustee
and any securities exchange or interdealer quotation system on which the
Capital Securities are listed, of the Coupon Rate and the Determination Date
for each Distribution Period, in each case as soon as practicable after the
determination thereof but in no event later than the thirtieth (30th) Business
Day of the relevant Distribution Period. Failure to notify the Company, the
Institutional Trustee or any securities exchange or interdealer quotation
system, or any defect in said notice, shall not affect the obligation of the
Company to make payment on the Debentures at the applicable Coupon Rate. Any
error in the calculation of the Coupon Rate by the Institutional Trustee may
be corrected at any time by notice delivered as above provided. Upon the
17
request of a holder of a Debenture, the Trustee shall provide the Coupon Rate
then in effect and, if determined, the Coupon Rate for the next Distribution
Period.
(c) Subject to the corrective rights set forth above, all
certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the purposes
of the provisions relating, to the payment and calculation of interest on the
Debentures and distributions on the Capital Securities by the Trustee or the
Institutional Trustee will (in the absence of willful default, bad faith or
manifest error) be final, conclusive and binding on the Trust, the Company and
all of the holders of the Debentures and the Capital Securities, and no
liability shall (in the absence of willful default, bad faith or manifest
error) attach to the Trustee or the Institutional Trustee in connection with
the exercise or non-exercise by either of them or their respective powers,
duties and discretion.
Section 2.11. Extension of Interest Payment Period. So long as no
Event of Default has occurred and is continuing, the Company shall have the
right, from time to time, and without causing an Event of Default, to defer
payments of interest on the Debentures by extending the interest payment
period on the Debentures at any time and from time to time during the term of
the Debentures, for up to 20 consecutive quarterly periods (each such extended
interest payment period, an "Extension Period"), during which Extension Period
no interest (including Additional Interest) shall be due and payable. No
Extension Period may end on a date other than an Interest Payment Date. At the
end of any such Extension Period the Company shall pay all interest then
accrued and unpaid on the Debentures (together with Additional Interest
thereon); provided, however, that no Extension Period may extend beyond the
Maturity Date; provided further, however, that during any such Extension
Period, the Company shall not and shall not permit any Affiliate to (i)
declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
or such Affiliate's capital stock (other than payments of dividends or
distributions to the Company) or make any guarantee payments with respect to
the foregoing or (ii) make any payment of principal or interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company or
any Affiliate that rank pari passu in all respects with or junior in interest
to the Debentures (other than, with respect to clauses (i) or (ii) above, (a)
repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Company (or securities convertible into or exercisable
for such capital stock) as consideration in an acquisition transaction entered
into prior to the applicable Extension Period, (b) as a result of any exchange
or conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for any class or series of the
Company's capital stock or of any class or series of the Company's
indebtedness for any class or series of the Company's capital stock, (c) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholders' rights plan, or the issuance of rights,
stock or other property under any stockholders' rights plan, or the redemption
or repurchase of rights pursuant thereto, (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
18
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock and any cash payments in lieu of fractional shares issued
in connection therewith, or (f) payments under the Capital Securities
Guarantee. Prior to the termination of any Extension Period, the Company may
further extend such period, provided that such period together with all such
previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all accrued and
unpaid interest and Additional Interest, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest or
Additional Interest shall be due and payable during an Extension Period,
except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest to the extent permitted by applicable law. The Company
must give the Trustee notice of its election to begin or extend such Extension
Period at least 5 Business Days prior to the regular record date (as such term
is used in Section 2.8) immediately preceding the Interest Payment Date with
respect to which interest on the Debentures would have been payable except for
the election to begin or extend such Extension Period.
Section 2.12. CUSIP Numbers. The Company in issuing the Debentures
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use CUSIP numbers in notices of redemption as a convenience to
Securityholders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Debentures or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Debentures, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee in
writing of any change in the CUSIP numbers.
Section 2.13. Global Debentures.
(a) Upon the election of the holder of Outstanding Debentures, which
election need not be in writing, the Debentures owned by such holder shall be
issued in the form of one or more Global Debentures registered in the name of
the Depositary or its nominee. Each Global Debenture issued under this
Indenture shall be registered in the name of the Depositary designated by the
Company for such Global Debenture or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Debenture shall constitute a single Debenture for all purposes of this
Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Debenture may be exchanged in whole or in part for Debentures registered, and
no transfer of a Global Debenture in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Debenture or
a nominee thereof unless (i) such Depositary advises the Trustee and the
Company in writing that such Depositary is no longer willing or able to
properly discharge its responsibilities as Depositary with respect to such
Global Debenture, and no qualified successor is appointed by the Company
within ninety (90) days of receipt by the Company of such notice, (ii) such
Depositary ceases to be a clearing agency registered under the Exchange Act
and no successor is appointed by the Company within ninety (90) days after
obtaining knowledge of such event, (iii) the Company executes and delivers to
the Trustee a Company Order stating that the Company elects to terminate the
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book-entry system through the Depositary or (iv) an Event of Default shall
have occurred and be continuing. Upon the occurrence of any event specified in
clause (i), (ii), (iii) or (iv) above, the Trustee shall notify the Depositary
and instruct the Depositary to notify all owners of beneficial interests in
such Global Debenture of the occurrence of such event and of the availability
of Debentures to such owners of beneficial interests requesting the same. Upon
the issuance of such Debentures and the registration in the Debenture Register
of such Debentures in the names of the Holders of the beneficial interests
therein, the Trustee shall recognize such holders of beneficial interests as
Holders.
(c) If any Global Debenture is to be exchanged for other Debentures
or canceled in part, or if another Debenture is to be exchanged in whole or in
part for a beneficial interest in any Global Debenture, then either (i) such
Global Debenture shall be so surrendered for exchange or cancellation as
provided in this Article II or (ii) the principal amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such other
Debenture to be so exchanged for a beneficial interest therein, as the case
may be, by means of an appropriate adjustment made on the records of the
Debenture registrar, whereupon the Trustee, in accordance with the Applicable
Depository Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any
such surrender or adjustment of a Global Debenture by the Depositary,
accompanied by registration instructions, the Company shall execute and the
Trustee shall authenticate and deliver any Debentures issuable in exchange for
such Global Debenture (or any portion thereof) in accordance with the
instructions of the Depositary. The Trustee shall not be liable for any delay
in delivery of such instructions and may conclusively rely on, and shall be
fully protected in relying on, such instructions.
(d) Every Debenture authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Debenture or any
portion thereof shall be authenticated and delivered in the form of, and shall
be, a Global Debenture, unless such Debenture is registered in the name of a
Person other than the Depositary for such Global Debenture or a nominee
thereof.
(e) Debentures distributed to holders of Book-Entry Capital
Securities (as defined in the Trust Agreement) upon the dissolution of the
Trust shall be distributed in the form of one or more Global Debentures
registered in the name of a Depositary or its nominee, and deposited with the
Debentures registrar, as custodian for such Depositary, or with such
Depositary, for credit by the Depositary to the respective accounts of the
beneficial owners of the Debentures represented thereby (or such other
accounts as they may direct). Debentures distributed to holders of Capital
Securities other than Book-Entry Capital Securities upon the dissolution of
the Trust shall not be issued in the form of a Global Debenture or any other
form intended to facilitate book-entry trading in beneficial interests in such
Debentures.
(f) The Depositary or its nominee, as the registered owner of a
Global Debenture, shall be the Holder of such Global Debenture for all
purposes under this Indenture and the Debentures, and owners of beneficial
interests in a Global Debenture shall hold such interests pursuant to the
Applicable Depository Procedures. Accordingly, any such owner's beneficial
interest in a Global Debenture shall be shown only on, and the transfer of
such interest shall be effected only through, records maintained by the
Depositary or its nominee or its Depositary Participants. The Debentures
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registrar and the Trustee shall be entitled to deal with the Depositary for
all purposes of this Indenture relating to a Global Debenture (including the
payment of principal and interest thereon and the giving of instructions or
directions by owners of beneficial interests therein and the giving of
notices) as the sole Holder of the Debenture and shall have no obligations to
the owners of beneficial interests therein. Neither the Trustee nor the
Debentures registrar shall have any liability in respect of any transfers
effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global
Debenture shall be exercised only through the Depositary and shall be limited
to those established by law and agreements between such owners and the
Depositary and/or its Depositary Participants.
(h) No holder of any beneficial interest in any Global Debenture held
on its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Debenture, and such Depositary may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the owner
of such Global Debenture for all purposes whatsoever. None of the Company, the
Trustee nor any agent of the Company or the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global
Debenture or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
holder of any Debenture.
ARTICLE III.
PARTICULAR COVENANTS OF THE COMPANY
Section 3.1. Payment of Principal, Premium and Interest; Agreed
Treatment of the Debentures.
(a) The Company covenants and agrees that it will duly and punctually
pay or cause to be paid the principal of and premium, if any, and Interest and
any Additional Interest on the Debentures at the place, at the respective
times and in the manner provided in this Indenture and the Debentures. Each
installment of interest on the Debentures may be paid (i) by mailing checks
for such interest payable to the order of the holder of Debentures entitled
thereto as they appear on the registry books of the Company if a request for a
wire transfer has not been received by the Company or (ii) by wire transfer to
any account with a banking institution located in the United States designated
in writing by such Person to the paying agent no later than the related record
date. Notwithstanding the foregoing, so long as the Institutional Trustee, not
in its individual capacity but solely as Institutional Trustee for Lakeland
Statutory Trust II, is the holder of the Debentures, the payment of the
principal and Interest on the Debentures shall be made by wire transfer of
immediately available funds to the Institutional Trustee, to be received not
later than 1:00 p.m., New York City time, on the Interest Payment Date of such
payment at the Principal Office of the Trustee for distribution to the holders
of the Capital Securities. Notwithstanding any other provision of this
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Indenture to the contrary, the Institutional Trustee shall not be required to
make, or cause to be made, distributions to the holders of the Capital
Securities, as aforesaid prior to the first Business Day on which it is
practicable for the Institutional Trustee to do so in view of the time of day
when the funds to be so transferred were received by it if such funds were
received after 1:00 p.m., New York City time.
(b) The Company will treat the Debentures as indebtedness, and the
amounts payable in respect of the principal amount of such Debentures as
interest, for all United States federal income tax purposes. All payments in
respect of such Debentures will be made free and clear of United States
withholding tax to any beneficial owner thereof that has provided an Internal
Revenue Service Form W8 BEN (or any substitute or successor form) establishing
its non-United States status for United States federal income tax purposes.
(c) As of the date of this Indenture, the Company has no present
intention to exercise its right under Section 2.11 to defer payments of
interest on the Debentures by commencing an Extension Period.
(d) As of the date of this Indenture, the Company believes that the
likelihood that it would exercise its right under Section 2.11 to defer
payments of interest on the Debentures by commencing an Extension Period at
any time during which the Debentures are outstanding is remote because of the
restrictions that would be imposed on the Company's ability to declare or pay
dividends or distributions on, or to redeem, purchase or make a liquidation
payment with respect to, any of its outstanding equity and on the Company's
ability to make any payments of principal of or interest on, or repurchase or
redeem, any of its debt securities that rank pari passu in all respects with
(or junior in interest to) the Debentures.
Section 3.2. Offices for Notices and Payments, etc. So long as any of
the Debentures remain outstanding, the Company will maintain in Hartford,
Connecticut, an office or agency where the Debentures may be presented for
payment, an office or agency where the Debentures may be presented for
registration of transfer and for exchange as in this Indenture provided and an
office or agency where notices and demands to or upon the Company in respect
of the Debentures or of this Indenture may be served. The Company will give to
the Trustee written notice of the location of any such office or agency and of
any change of location thereof. Until otherwise designated from time to time
by the Company in a notice to the Trustee, or specified as contemplated by
Section 2.5, such office or agency for all of the above purposes shall be the
office or agency of the Trustee. In case the Company shall fail to maintain
any such office or agency in Hartford, Connecticut, or shall fail to give such
notice of the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Principal Office of
the Trustee.
In addition to any such office or agency, the Company may from time
to time designate one or more offices or agencies outside Hartford,
Connecticut, where the Debentures may be presented for registration of
transfer and for exchange in the manner provided in this Indenture, and, the
Company may from time to time rescind such designation, as the Company may
deem desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
22
maintain any such office or agency in Hartford, Connecticut, for the purposes
above mentioned. The Company will give to the Trustee prompt written notice of
any such designation or rescission thereof.
Section 3.3. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.9, a Trustee, so
that there shall at all times be a Trustee hereunder.
Section 3.4. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the
Trustee, it will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provision of this Section 3.4;
(1) that it will hold all sums held by it as such agent for
the payment of the principal of and premium, if any, or interest, if any, on
the Debentures (whether such sums have been paid to it by the Company or by
any other obligor on the Debentures) in trust for the benefit of the holders
of the Debentures;
(2) that it will give the Trustee prompt written notice of
any failure by the Company (or by any other obligor on the Debentures) to make
any payment of the principal of and premium, if any, or interest, if any, on
the Debentures when the same shall be due and payable; and
(3) that it will, at any time during the continuance of any
Event of Default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such paying agent.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of and premium, if any, or interest, if
any, on the Debentures, set aside, segregate and hold in trust for the benefit
of the holders of the Debentures a sum sufficient to pay such principal,
premium or interest so becoming due and will notify the Trustee in writing of
any failure to take such action and of any failure by the Company (or by any
other obligor under the Debentures) to make any payment of the principal of
and premium, if any, or interest, if any, on the Debentures when the same
shall become due and payable.
Whenever the Company shall have one or more paying agents for the
Debentures, it will, on or prior to each due date of the principal of and
premium, if any, or interest, if any, on the Debentures, deposit with a paying
agent a sum sufficient to pay the principal, premium or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled
thereto and (unless such paying agent is the Trustee) the Company shall
promptly notify the Trustee in writing of its action or failure to act.
(c) Anything in this Section 3.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Debentures, or for any other reason pay, or
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direct any paying agent to pay to the Trustee all sums held in trust by the
Company or any such paying agent, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.4 is subject to
Sections 12.3 and 12.4.
Section 3.5. Certificate to Trustee. The Company will deliver to the
Trustee on or before 120 days after the end of each fiscal year, so long as
Debentures are outstanding hereunder, a Certificate stating that in the course
of the performance by the signers of their duties as officers of the Company
they would normally have knowledge of any default during such fiscal year by
the Company in the performance of any covenants contained herein, stating
whether or not they have knowledge of any such default and, if so, specifying
each such default of which the signers have knowledge and the nature and
status thereof. The Trustee shall provide a copy of such Certificate to any
collateral manager for a securitized pool that owns any of the Capital
Securities upon request by or on behalf of such manager.
Section 3.6. Additional Sums. If and for so long as the Trust is the
holder of all Debentures and the Trust is required to pay any additional
taxes, duties, assessments or other governmental charges as a result of a Tax
Event, the Company will pay such additional amounts ("Additional Sums") on the
Debentures as shall be required so that the net amounts received and retained
by the Trust after paying taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust would have received if no such
taxes, duties, assessments or other governmental charges had been imposed.
Whenever in this Indenture or the Debentures there is a reference in any
context to the payment of principal of or interest on the Debentures, such
mention shall be deemed to include mention of payments of the Additional Sums
provided for in this paragraph to the extent that, in such context, Additional
Sums are, were or would be payable in respect thereof pursuant to the
provisions of this paragraph and express mention of the payment of Additional
Sums (if applicable) in any provisions hereof shall not be construed as
excluding Additional Sums in those provisions hereof where such express
mention is not made; provided, however, that the deferral of the payment of
interest during an Extension Period pursuant to Section 2.11 shall not defer
the payment of any Additional Sums that may be due and payable.
Section 3.7. Compliance with Consolidation Provisions. The Company
will not, while any of the Debentures remain outstanding, consolidate with, or
merge into, or merge into itself, or sell or convey all or substantially all
of its property to any other Person unless the provisions of Article XI hereof
are complied with.
Section 3.8. Limitation on Dividends. If Debentures are initially
issued to the Trust or a trustee of such trust in connection with the issuance
of Trust Securities by the Trust (regardless of whether Debentures continue to
be held by such Trust) and (i) there shall have occurred and be continuing an
Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the Capital Securities Guarantee, or (iii)
the Company shall have given notice of its election to defer payments of
interest on the Debentures by extending the interest payment period as
provided herein and such period, or any extension thereof, shall be
continuing, then the Company shall not, and shall not allow any Affiliate of
the Company to, (x) declare or pay any dividends or distributions on, or
24
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Company's capital stock or its Affiliates' capital stock (other than
payments of dividends or distributions to the Company) or make any guarantee
payments with respect to the foregoing or (y) make any payment of principal of
or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company or any Affiliate that rank pari passu in all
respects with or junior in interest to the Debentures (other than, with
respect to clauses (x) and (y) above, (1) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or
in connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
if any, (2) as a result of any exchange or conversion of any class or series
of the Company's capital stock (or any capital stock of a subsidiary of the
Company) for any class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (3) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged, (4) any
declaration of a dividend in connection with any stockholders' rights plan, or
the issuance of rights, stock or other property under any stockholders' rights
plan, or the redemption or repurchase of rights pursuant thereto, (5) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid
or ranks pari passu with or junior to such stock and any cash payments in lieu
of fractional shares issued in connection therewith, or (6) payments under the
Capital Securities Guarantee).
Section 3.9. Covenants as to the Trust. For so long as the Trust
Securities remain outstanding, the Company shall maintain 100% ownership of
the Common Securities; provided, however, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of such
Common Securities. The Company, as owner of the Common Securities, shall,
except in connection with a distribution of Debentures to the holders of Trust
Securities in liquidation of the Trust, the redemption of all of the Trust
Securities or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration, take all steps necessary for the Company to
cause the Trust (a) to remain a statutory trust, (b) to otherwise continue to
be classified as a grantor trust for United States federal income tax
purposes, and (c) to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Debentures.
Section 3.10. Additional Junior Indebtedness. The Company shall not,
and it shall not cause or permit any Affiliate of the Company to, incur, issue
or be obligated on any Additional Junior Indebtedness, either directly or
indirectly, by way of guarantee, suretyship or otherwise, other than: (i)
Additional Junior Indebtedness that, by its terms, is expressly stated to be
either junior and subordinate or pari passu in all respects to the Debentures,
and (ii) Additional Junior Indebtedness of which the Company has notified
(and, if then required under the applicable guidelines of the regulating
entity, has received approval from) the Federal Reserve, if the Company is a
bank holding company, or the OTS, if the Company is a savings and loan holding
company.
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ARTICLE IV.
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 4.1. Securityholders' Lists. The Company covenants and agrees
that it will furnish or caused to be furnished to the Trustee:
(a) on each regular record date for the Debentures, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the
Securityholders of the Debentures as of such record date; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
except that no such lists need be furnished under this Section 4.1 so long as
the Trustee is in possession thereof by reason of its acting as Debenture
registrar.
Section 4.2. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures (1) contained in the most recent list furnished to it as provided
in Section 4.1 or (2) received by it in the capacity of Debentures registrar
(if so acting) hereunder. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more holders of Debentures (hereinafter referred
to as "applicants") apply in writing to the Trustee and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a period
of at least 6 months preceding the date of such application, and such
application states that the applicants desire to communicate with other
holders of Debentures with respect to their rights under this Indenture or
under such Debentures and is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the
Trustee shall within 5 Business Days after the receipt of such application, at
its election, either:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2, or
(2) inform such applicants as to the approximate number of
holders of Debentures whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.2, and as to the approximate cost of mailing
to such Securityholders the form of proxy or other communication, if any,
specified in such application.
26
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2 a copy of the form of proxy
or other communication which is specified in such request with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Securities and Exchange Commission, if permitted
or required by applicable law, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interests of the holders of all
Debentures, as the case may be, or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If said
Commission, as permitted or required by applicable law, after opportunity for
a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after
the entry of an order sustaining one or more of such objections, said
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or duty
to such applicants respecting their application.
(c) Each and every holder of Debentures, by receiving and holding the
same, agrees with Company and the Trustee that neither the Company nor the
Trustee nor any paying agent shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
holders of Debentures in accordance with the provisions of subsection (b) of
this Section 4.2, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under said subsection (b).
ARTICLE V.
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
Section 5.1. Events of Default. "Event of Default" wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(a) the Company defaults in the payment of any interest upon any
Debenture when it becomes due and payable, and fails to cure 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 this Indenture
shall not constitute a default in the payment of interest for this purpose; or
27
(b) the Company defaults in the payment of all or any part of the
principal of (or premium, if any, on) any Debentures as and when the same
shall become due and payable either at maturity, upon redemption, by
declaration of acceleration or otherwise; or
(c) the Company defaults in the performance of, or breaches, any of
its covenants or agreements in this Indenture or in the terms of the
Debentures established as contemplated in this Indenture (other than a
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the holders of at least 25% in aggregate principal amount
of the Outstanding Debentures, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(d) a court of competent jurisdiction shall enter a decree or order
for relief in respect of the Company in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company or for
any substantial part of its property, or ordering the winding-up or
liquidation of its affairs and such decree or order shall remain unstayed and
in effect for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter
in effect, shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator (or other similar official) of the Company or of any substantial
part of its property, or shall make any general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due; or
(f) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except
in connection with (i) the distribution of the Debentures to holders of such
Trust Securities in liquidation of their interests in the Trust, (ii) the
redemption of all of the outstanding Trust Securities or (iii) certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration.
If an Event of Default occurs and is continuing with respect to the
Debentures, then, and in each and every such case, unless the principal of the
Debentures shall have already become due and payable, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the
Debentures then Outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by Securityholders), may declare the entire
principal of the Debentures and the interest accrued thereon, if any, to be
due and payable immediately, and upon any such declaration the same shall
become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Debentures shall have been so
declared due and payable, and before any judgment or decree for the payment of
the moneys due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to
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pay all matured installments of interest upon all the Debentures and the
principal of and premium, if any, on the Debentures which shall have become
due otherwise than by acceleration (with interest upon such principal and
premium, if any, and Additional Interest) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and all
other amounts due to the Trustee pursuant to Section 6.6, and if any and all
Events of Default under this Indenture, other than the non-payment of the
principal of or premium, if any, on Debentures which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
herein -- then and in every such case the holders of a majority in aggregate
principal amount of the Debentures then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults and rescind and annul such
declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Debentures shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the
Debentures shall continue as though no such proceeding had been taken.
Section 5.2. Payment of Debentures on Default, Suit Therefor. The
Company covenants that upon the occurrence of an Event of Default pursuant to
Section 5.1(a) or Section 5.1(b) then, upon demand of the Trustee, the Company
will pay to the Trustee, for the benefit of the holders of the Debentures the
whole amount that then shall have become due and payable on all Debentures for
principal and premium, if any, or interest, or both, as the case may be, with
Additional Interest accrued on the Debentures (to the extent that payment of
such interest is enforceable under applicable law and, if the Debentures are
held by the Trust or a trustee of such Trust, without duplication of any other
amounts paid by the Trust or a trustee in respect thereof); and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including a reasonable compensation to the Trustee,
its agents, attorneys and counsel, and any other amounts due to the Trustee
under Section 6.6. In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company
or any other obligor on such Debentures and collect in the manner provided by
law out of the property of the Company or any other obligor on such Debentures
wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Bankruptcy Law, or in case a receiver or trustee shall have been appointed for
the property of the Company or such other obligor, or in the case of any other
similar judicial proceedings relative to the Company or other obligor upon the
Debentures, or to the creditors or property of the Company or such other
obligor, the Trustee, irrespective of whether the principal of the Debentures
29
shall then be due and payable as therein expressed or by declaration of
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 5.2, shall be
entitled and empowered, by intervention in such proceedings or otherwise,
(i) to file and prove a claim or claims for the
whole amount of principal and interest owing and unpaid in
respect of the Debentures and, in case of any judicial
proceedings,
(ii) to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all other amounts due to the
Trustee under Section 6.6), and of the Securityholders
allowed in such judicial proceedings relative to the Company
or any other obligor on the Debentures, or to the creditors
or property of the Company or such other obligor, and unless
prohibited by applicable law and regulations, to vote on
behalf of the holders of the Debentures in any election of a
trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or
Person performing similar functions in comparable
proceedings,
(iii) to collect and receive any moneys or other
property payable or deliverable on any such claims, and
(iv) to distribute the same after the deduction of
its charges and expenses.
Any receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the Securityholders to make such payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to the Securityholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the
Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other amounts due to the Trustee under Section 6.6.
Nothing herein contained shall be construed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Debentures or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable benefit of the
holders of the Debentures.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
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Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Debentures, and it shall not be necessary to make any holders
of the Debentures parties to any such proceedings.
Section 5.3. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to this Article V shall be applied in the
following order, at the date or dates fixed by the Trustee for the
distribution of such moneys, upon presentation of the several Debentures in
respect of which moneys have been collected, and stamping thereon the payment,
if only partially paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses incurred by, and
reasonable fees of, the Trustee, its agents, attorneys and counsel, and of all
other amounts due to the Trustee under Section 6.6;
Second: To the payment of all Senior Indebtedness of the Company if
and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Debentures for principal (and premium, if any), and interest on the
Debentures, in respect of which or for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according to
the amounts due on such Debentures for principal (and premium, if any) and
interest, respectively; and
Fourth: The balance, if any, to the Company.
Section 5.4. Proceedings by Securityholders. No holder of any
Debenture shall have any right to institute any suit, action or proceeding for
any remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default with respect to the Debentures
and unless the holders of not less than 25% in aggregate principal amount of
the Debentures then Outstanding shall have given the Trustee a written request
to institute such action, suit or proceeding and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred thereby, and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding.
Notwithstanding any other provisions in this Indenture, however, the
right of any holder of any Debenture to receive payment of the principal of,
premium, if any, and interest, on such Debenture when due, or to institute
suit for the enforcement of any such payment, shall not be impaired or
affected without the consent of such holder and by accepting a Debenture
hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Debenture with every other such taker and holder and the
Trustee, that no one or more holders of Debentures shall have any right in any
manner whatsoever by virtue or by availing itself of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any
other Debentures, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Debentures. For the protection and enforcement of the
31
provisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 5.5. Proceedings by Trustee. In case of an Event of Default
hereunder the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant
or agreement contained in this Indenture or in aid of the exercise of any
power granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
Section 5.6. Remedies Cumulative and Continuing; Delay or Omission
Not a Waiver. Except as otherwise provided in Section 2.6, all powers and
remedies given by this Article V to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed cumulative and not exclusive
of any other powers and remedies available to the Trustee or the holders of
the Debentures, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Debentures, and no
delay or omission of the Trustee or of any holder of any of the Debentures to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.4, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee
or by the Securityholders.
No delay or omission of the Trustee or any Securityholder 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 any Securityholder may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee (in accordance with
its duties under Section 6.1 hereof) or by such holder, as the case may be.
Section 5.7. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders. The holders of a majority in aggregate principal
amount of the Debentures affected (voting as one class) at the time
outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such
Debentures; provided, however, that (subject to the provisions of Section 6.1)
the Trustee shall have the right to decline to follow any such direction if
the Trustee shall determine that the action so directed would be unjustly
prejudicial to the holders not taking part in such direction or if the Trustee
being advised by counsel determines that the action or proceeding so directed
may not lawfully be taken or if a Responsible Officer of the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability.
The holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may on behalf of the holders of all of the
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Debentures waive (or modify any previously granted waiver of) any past default
or Event of Default, and its consequences, except a default (a) in the payment
of principal of, premium, if any, or interest on any of the Debentures, (b) in
respect of covenants or provisions hereof which cannot be modified or amended
without the consent of the holder of each Debenture affected, or (c) in
respect of the covenants contained in Section 3.9; provided, however, that if
the Debentures are held by the Trust or a trustee of such trust, such waiver
or modification to such waiver shall not be effective until the holders of a
majority in Liquidation Amount of Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver, provided, further,
that if the consent of the holder of each outstanding Debenture is required,
such waiver shall not be effective until each holder of the Trust Securities
of the Trust shall have consented to such waiver. Upon any such waiver, the
default covered thereby shall be deemed to be cured for all purposes of this
Indenture and the Company, the Trustee and the holders of the Debentures shall
be restored to their former positions and rights hereunder, respectively; but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event
of Default hereunder shall have been waived as permitted by this Section, said
default or Event of Default shall for all purposes of the Debentures and this
Indenture be deemed to have been cured and to be not continuing.
Section 5.8. Notice of Defaults. The Trustee shall, within 90 days
after the actual knowledge by a Responsible Officer of the Trustee of the
occurrence of a default with respect to the Debentures, mail to all
Securityholders, as the names and addresses of such holders appear upon the
Debenture Register, notice of all defaults with respect to the Debentures
known to the Trustee, unless such defaults shall have been cured before the
giving of such notice (the term "defaults" for the purpose of this Section 5.8
being hereby defined to be the events specified in clauses (a), (b), (c), (d),
(e) and (f) of Section 5.1, not including periods of grace, if any, provided
for therein); provided, however, that, except in the case of default in the
payment of the principal of, premium, if any, or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the Trustee in good faith determines that
the withholding of such notice is in the interests of the Securityholders.
Section 5.9. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and expenses, against
any party litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; provided,
however, that the provisions of this Section 5.9 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than 10% in principal
amount of the Debentures outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture against the Company on or after
the same shall have become due and payable.
33
ARTICLE VI.
CONCERNING THE TRUSTEE
Section 6.1. Duties and Responsibilities of Trustee. With respect to
the holders of Debentures issued hereunder, the Trustee, prior to the
occurrence of an Event of Default with respect to the Debentures and after the
curing or waiving of all Events of Default which may have occurred, with
respect to the Debentures, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants shall be read into this Indenture against the Trustee. In case an
Event of Default with respect to the Debentures has occurred (which has not
been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default with respect to
Debentures and after the curing or waiving of all Events of Default which may
have occurred;
(1) the duties and obligations of the Trustee with respect
to Debentures shall be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for the performance of
such duties and obligations with respect to the Debentures as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith, in accordance with the direction
of the Securityholders pursuant to Section 5.7, relating to the time, method
and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
34
its rights or powers, if there is ground for believing that the repayment of
such funds or liability is not assured to it under the terms of this Indenture
or indemnity satisfactory to the Trustee against such risk is not reasonably
assured to it.
The Trustee shall provide the Company with written notice of the
Interest Rate for each Distribution Period no later than the thirtieth (30th)
Business Day of the relevant Distribution Period.
Section 6.2. Reliance on Documents, Opinions, etc. Except as otherwise
provided in Section 6.1:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, note,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed), and any
Board Resolution may be evidenced to the Trustee by a copy thereof certified
by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture; nothing contained herein
shall, however, relieve the Trustee of the obligation, upon the occurrence of
an Event of Default with respect to the Debentures (that has not been cured or
waived) to exercise with respect to Debentures such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs;
(f) the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, debenture, coupon or
other paper or document, unless requested in writing to do so by the holders
of not less than a majority in aggregate principal amount of the outstanding
Debentures affected thereby, provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of
35
the Trustee, not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expense or liability as a condition to so proceeding;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
(including any Authenticating Agent) or attorneys, and the Trustee shall not
be responsible for any misconduct or negligence on the part of any such agent
or attorney appointed by it with due care; and
(h) with the exceptions of defaults under Sections 5.1(a) or 5.1(b),
the Trustee shall not be charged with knowledge of any Default or Event of
Default with respect to the Debentures unless a written notice of such Default
or Event of Default shall have been given to the Trustee by the Company or any
other obligor on the Debentures or by any holder of the Debentures.
Section 6.3. No Responsibility for Recitals, etc. The recitals
contained herein and in the Debentures (except in the certificate of
authentication of the Trustee or the Authenticating Agent) shall be taken as
the statements of the Company, and the Trustee and the Authenticating Agent
assume no responsibility for the correctness of the same. The Trustee and the
Authenticating Agent make no representations as to the validity or sufficiency
of this Indenture or of the Debentures. The Trustee and the Authenticating
Agent shall not be accountable for the use or application by the Company of
any Debentures or the proceeds of any Debentures authenticated and delivered
by the Trustee or the Authenticating Agent in conformity with the provisions
of this Indenture.
Section 6.4. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debentures. The Trustee or any Authenticating
Agent or any paying agent or any transfer agent or any Debenture registrar, in
its individual or any other capacity, may become the owner or pledgee of
Debentures with the same rights it would have if it were not Trustee,
Authenticating Agent, paying agent, transfer agent or Debenture registrar.
Section 6.5. Moneys to be Held in Trust. Subject to the provisions of
Section 12.4, all moneys received by the Trustee or any paying agent shall,
until used or applied as herein provided, be held in trust for the purpose for
which they were received, but need not be segregated from other funds except
to the extent required by law. The Trustee and any paying agent shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company. So long as no Event of Default
shall have occurred and be continuing, all interest allowed on any such moneys
shall be paid from time to time upon the written order of the Company, signed
by the Chairman of the Board of Directors, the Chief Executive Officer, the
President, the Chief Financial Officer, a Managing Director, a Vice President,
the Treasurer or an Assistant Treasurer of the Company.
Section 6.6. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as shall be agreed to in writing
between the Company and the Trustee (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
36
Trustee in accordance with any of the provisions of this Indenture (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or willful
misconduct. The Company also covenants to indemnify each of the Trustee or any
predecessor Trustee (and its officers, agents, directors and employees) for,
and to hold it harmless against, any and all loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Trustee)
incurred without negligence or willful misconduct on the part of the Trustee
and arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against any
claim of liability. The obligations of the Company under this Section 6.6 to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall be secured by a lien prior to
that of the Debentures upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Debentures.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Sections 5.1(d), 5.1(e) or
5.1(f), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the resignation or
removal of the Trustee and the defeasance or other termination of this
Indenture.
Notwithstanding anything in this Indenture or any Debenture to the
contrary, the Trustee shall have no obligation whatsoever to advance funds to
pay any principal of or interest on or other amounts with respect to the
Debentures or otherwise advance funds to or on behalf of the Company.
Section 6.7. Officers' Certificate as Evidence. Except as otherwise
provided in Sections 6.1 and 6.2, whenever in the administration of the
provisions of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or willful
misconduct on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or willful misconduct on the part of
the Trustee, shall be full warrant to the Trustee for any action taken or
omitted by it under the provisions of this Indenture upon the faith thereof.
Section 6.8. Eligibility of Trustee. The Trustee hereunder shall at
all times be a corporation organized and doing business under the laws of the
United States of America or any state or territory thereof or of the District
of Columbia or a corporation or other Person authorized under such laws to
exercise corporate trust powers, having (or whose obligations under this
Indenture are guaranteed by an affiliate having) a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000.00) and subject to
supervision or examination by federal, state, territorial, or District of
37
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 6.8
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 records of
condition so published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.8, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.9. If the
Trustee has or shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the Trustee shall either eliminate
such interest or resign, to the extent and in the manner described by this
Indenture.
Section 6.9. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice of such resignation to the Company
and by mailing notice thereof, at the Company's expense, to the holders of the
Debentures at their addresses as they shall appear on the Debenture Register.
Upon receiving such notice of resignation, the Company shall promptly appoint
a successor trustee or trustees by written instrument, in duplicate, executed
by order of its Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor Trustee shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation to
the affected Securityholders, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee, or any
Securityholder who has been a bona fide holder of a Debenture or Debentures
for at least six months may, subject to the provisions of Section 5.9, on
behalf of himself and all others similarly situated, petition any such court
for the appointment of a successor Trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a successor
Trustee.
(b) In case at any time any of the following shall occur --
(1) the Trustee shall fail to comply with the provisions of
Section 6.8 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Debenture or Debentures
for at least 6 months, or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.8 and shall fail to resign after written
request therefor by the Company or by any such Securityholder, 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,
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-- then, in any such case, the Company may remove the Trustee and
appoint a successor Trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor Trustee, or,
subject to the provisions of Section 5.9, any Securityholder who has been a
bona fide holder of a Debenture or Debentures for at least 6 months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint successor
Trustee.
(c) Upon prior written notice to the Company and the Trustee, the holders of a
majority in aggregate principal amount of the Debentures at the time
outstanding may at any time remove the Trustee and nominate a successor
Trustee, which shall be deemed appointed as successor Trustee unless within
ten (10) Business Days after such nomination the Company objects thereto, in
which case, or in the case of a failure by such holders to nominate a
successor Trustee, the Trustee so removed or any Securityholder, upon the
terms and conditions and otherwise as in subsection (a) of this Section 6.9
provided, may petition any court of competent jurisdiction for an appointment
of a successor.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor Trustee as
provided in Section 6.10.
Section 6.10. Acceptance by Successor Trustee. Any successor Trustee
appointed as provided in Section 6.9 shall execute, acknowledge and deliver to
the Company and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations with respect to the Debentures of its
predecessor hereunder, with like effect as if originally named as Trustee
herein; but, nevertheless, on the written request of the Company or of the
successor Trustee, the Trustee ceasing to act shall, upon payment of any
amounts then due it pursuant to the provisions of Section 6.6, execute and
deliver an instrument transferring to such successor Trustee all the rights
and powers of the Trustee so ceasing to act and shall duly assign, transfer
and deliver to such successor Trustee all property and money held by such
retiring Trustee thereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor Trustee all such rights
and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such Trustee to secure any amounts
then due it pursuant to the provisions of Section 6.6.
If a successor Trustee is appointed, the Company, the retiring
Trustee and the successor Trustee shall execute and deliver an indenture
supplemental hereto which 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 Debentures as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and 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 Trust hereunder by more than one Trustee, it being
39
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be Trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible under the provisions of Section 6.8.
In no event shall a retiring Trustee be liable for the acts or
omissions of any successor Trustee hereunder.
Upon acceptance of appointment by a successor Trustee as provided in
this Section 6.10, the Company shall mail notice of the succession of such
Trustee hereunder to the holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such
notice within 10 Business Days after the acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed
at the expense of the Company.
Section 6.11. Succession by Merger, etc. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto; provided
such corporation shall be otherwise eligible and qualified under this Article.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt
the certificate of authentication of any predecessor Trustee, and deliver such
Debentures so authenticated; and in case at that time any of the Debentures
shall not have been authenticated, any successor to the Trustee may
authenticate such Debentures either in the name of any predecessor hereunder
or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Debentures
or in this Indenture provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication
of any predecessor Trustee or authenticate Debentures in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
Section 6.12. Authenticating Agents. There may be one or more
Authenticating Agents appointed by the Trustee upon the request of the Company
with power to act on its behalf and subject to its direction in the
authentication and delivery of Debentures issued upon exchange or registration
of transfer thereof as fully to all intents and purposes as though any such
Authenticating Agent had been expressly authorized to authenticate and deliver
Debentures; provided, however, that the Trustee shall have no liability to the
Company for any acts or omissions of the Authenticating Agent with respect to
the authentication and delivery of Debentures. Any such Authenticating Agent
shall at all times be a corporation organized and doing business under the
laws of the United States or of any state or territory thereof or of the
40
District of Columbia authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of at least $50,000,000.00 and
being subject to supervision or examination by federal, state, territorial or
District of Columbia authority. If such corporation publishes reports of
condition at least annually pursuant to law or the requirements of such
authority, then for the purposes of this Section 6.12 the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder if such successor corporation
is otherwise eligible under this Section 6.12 without the execution or filing
of any paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time terminate the agency of any Authenticating Agent with respect to the
Debentures by giving written notice of termination to such Authenticating
Agent and to the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any Authenticating Agent shall
cease to be eligible under this Section 6.12, the Trustee may, and upon the
request of the Company shall, promptly appoint a successor Authenticating
Agent eligible under this Section 6.12, shall give written notice of such
appointment to the Company and shall mail notice of such appointment to all
holders of Debentures as the names and addresses of such holders appear on the
Debenture Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights, powers, duties and
responsibilities with respect to the Debentures of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent herein.
The Company agrees to pay to any Authenticating Agent from time to
time reasonable compensation for its services. Any Authenticating Agent shall
have no responsibility or liability for any action taken by it as such in
accordance with the directions of the Trustee.
ARTICLE VII.
CONCERNING THE SECURITYHOLDERS
Section 7.1. Action by Securityholders. Whenever in this Indenture it
is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the taking
of any other action) the fact that at the time of taking any such action the
holders of such specified percentage have joined therein may be evidenced (a)
by any instrument or any number of instruments of similar tenor executed by
such Securityholders in person or by agent or proxy appointed in writing, or
(b) by the record of such holders of Debentures voting in favor thereof at any
41
meeting of such Securityholders duly called and held in accordance with the
provisions of Article VIII, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of such Securityholders or
(d) by any other method the Trustee deems satisfactory.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action or
revocation of the same, the Company may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date for such Debentures for
the determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or
revocation of the same, but the Company shall have no obligation to do so. If
such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other action or revocation of the same may be given
before or after the record date, but only the Securityholders of record at the
close of business on the record date shall be deemed to be Securityholders for
the purposes of determining whether Securityholders of the requisite
proportion of outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or
other action or revocation of the same, and for that purpose the outstanding
Debentures shall be computed as of the record date; provided, however, that no
such authorization, agreement or consent by such Securityholders on the record
date shall be deemed effective unless it shall become effective pursuant to
the provisions of this Indenture not later than six (6) months after the
record date.
Section 7.2. Proof of Execution by Securityholders. Subject to the
provisions of Section 6.1, 6.2 and 8.5, proof of the execution of any
instrument by a Securityholder or his agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The ownership of Debentures shall be proved by the Debenture Register
or by a certificate of the Debenture registrar. The Trustee may require such
additional proof of any matter referred to in this Section as it shall deem
necessary.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.6.
Section 7.3. Who Are Deemed Absolute Owners. Prior to due presentment
for registration of transfer of any Debenture, the Company, the Trustee, any
Authenticating Agent, any paying agent, any transfer agent and any Debenture
registrar may deem the Person in whose name such Debenture shall be registered
upon the Debenture Register to be, and may treat him as, the absolute owner of
such Debenture (whether or not such Debenture shall be overdue) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest on such Debenture and for all other purposes; and neither
the Company nor the Trustee nor any Authenticating Agent nor any paying agent
nor any transfer agent nor any Debenture registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being or upon his order shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Debenture.
Section 7.4. Debentures Not Outstanding. In determining whether the
holders of the requisite aggregate principal amount of Debentures have
concurred in any direction, consent or waiver under this Indenture, Debentures
42
which are owned by the Company or any other obligor on the Debentures or by
any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be outstanding for the
purpose of any such determination; provided, however, that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures which a Responsible Officer of
the Trustee actually knows are so owned shall be so disregarded. Debentures so
owned which have been pledged in good faith may be regarded as outstanding for
the purposes of this Section 7.4 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Debentures and
that the pledgee is not the Company or any such other obligor or Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In the
case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
Section 7.5. Revocation of Consents; Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder (in cases where no record date has
been set pursuant to Section 7. 1) or any holder as of an applicable record
date (in cases where a record date has been set pursuant to Section 7.1) of a
Debenture (or any Debenture issued in whole or in part in exchange or
substitution therefor) the serial number of which is shown by the evidence to
be included in the Debentures the holders of which have consented to such
action may, by filing written notice with the Trustee at the Principal Office
of the Trustee and upon proof of holding as provided in Section 7.2, revoke
such action so far as concerns such Debenture (or so far as concerns the
principal amount represented by any exchanged or substituted Debenture).
Except as aforesaid any such action taken by the holder of any Debenture shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Debenture, and of any Debenture issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon such Debenture or
any Debenture issued in exchange or substitution therefor.
ARTICLE VIII.
SECURITYHOLDERS' MEETINGS
Section 8.1. Purposes of Meetings. A meeting of Securityholders may
be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant
to the provisions of Article VI;
43
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.2; or
(d) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount of such Debentures
under any other provision of this Indenture or under applicable law.
Section 8.2. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Securityholders to take any action specified in Section 8.1,
to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Securityholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be mailed to holders of Debentures affected at their
addresses as they shall appear on the Debentures Register and, if the Company
is not a holder of Debentures, to the Company. Such notice shall be mailed not
less than 20 nor more than 180 days prior to the date fixed for the meeting.
Section 8.3. Call of Meetings by Company or Securityholders. In case
at any time the Company pursuant to a Board Resolution, or the holders of at
least 10% in aggregate principal amount of the Debentures, as the case may be,
then outstanding, shall have requested the Trustee to call a meeting of
Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such
request, then the Company or such Securityholders may determine the time and
the place for such meeting and may call such meeting to take any action
authorized in Section 8.1, by mailing notice thereof as provided in Section
8.2.
Section 8.4. Qualifications for Voting. To be entitled to vote at any
meeting of Securityholders a Person shall (a) be a holder of one or more
Debentures with respect to which the meeting is being held or (b) a Person
appointed by an instrument in writing as proxy by a holder of one or more such
Debentures. The only Persons who shall be entitled to be present or to speak
at any meeting of Securityholders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
Section 8.5. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may
deem advisable for any meeting of Securityholders, in regard to proof of the
holding of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to vote, and such
other matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.3, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by majority vote of the
meeting.
44
Subject to the provisions of Section 7.4, at any meeting each holder
of Debentures with respect to which such meeting is being held or proxy
therefor shall be entitled to one vote for each $1,000.00 principal amount of
Debentures held or represented by him; provided, however, that no vote shall
be cast or counted at any meeting in respect of any Debenture challenged as
not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other
than by virtue of Debentures held by him or instruments in writing as
aforesaid duly designating him as the Person to vote on behalf of other
Securityholders. Any meeting of Securityholders duly called pursuant to the
provisions of Section 8.2 or 8.3 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
Section 8.6. Voting. The vote upon any resolution submitted to any
meeting of holders of Debentures with respect to which such meeting is being
held shall be by written ballots on which shall be subscribed the signatures
of such holders or of their representatives by proxy and the serial number or
numbers of the Debentures held or represented by them. The permanent chairman
of the meeting shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall make and file
with the secretary of the meeting their verified written reports in triplicate
of all votes cast at the meeting. A record in duplicate of the proceedings of
each meeting of Securityholders shall be prepared by the secretary of the
meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one
or more Persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 8.2. The record shall show the serial numbers of the Debentures voting
in favor of or against any resolution. The record shall be signed and verified
by the affidavits of the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Company and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 8.7. Quorum; Actions. The Persons entitled to vote a majority
in principal amount of the Debentures then outstanding shall constitute a
quorum for a meeting of Securityholders; provided, however, that if any action
is to be taken at such meeting with respect to a consent, waiver, request,
demand, notice, authorization, direction or other action which may be given by
the holders of not less than a specified percentage in principal amount of the
Debentures then outstanding, the Persons holding or representing such
specified percentage in principal amount of the Debentures then outstanding
will 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 Securityholders, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the permanent
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 permanent 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 8.2, except that such notice need be given only
45
once not less than 5 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 Debentures then outstanding which shall constitute a quorum.
Except as limited by the provisos in the first paragraph of Section
9.2, any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the holders of a majority in principal amount of the
Debentures then outstanding; provided, however, that, except as limited by the
provisos in the first paragraph of Section 9.2, any resolution with respect to
any consent, waiver, request, demand, notice, authorization, direction or
other action which this Indenture expressly provides may be given by the
holders of not less than a specified percentage in principal amount of the
Debentures then outstanding may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid only by
the affirmative vote of the holders of a not less than such specified
percentage in principal amount of the Debentures then outstanding.
Any resolution passed or decision taken at any meeting of holders of
Debentures duly held in accordance with this Section shall be binding on all
the Securityholders, whether or not present or represented at the meeting.
ARTICLE IX.
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures without Consent of
Securityholders. The Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto, without the consent of the Securityholders,
for one or more of the following purposes:
(a) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company, pursuant to Article XI
hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of Debentures as
the Board of Directors shall consider to be for the protection of the holders
of such Debentures, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants, restrictions or
conditions a default or an Event of Default permitting the enforcement of all
or any of the remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant restriction
or condition such supplemental indenture may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the
Trustee upon such default;
(c) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
46
arising under this Indenture; provided that any such action shall not
materially adversely affect the interests of the holders of the Debentures;
(d) to add to, delete from, or revise the terms of Debentures,
including, without limitation, any terms relating to the issuance, exchange,
registration or transfer of Debentures, including to provide for transfer
procedures and restrictions substantially similar to those applicable to the
Capital Securities as required by Section 2.5 (for purposes of assuring that
no registration of Debentures is required under the Securities Act); provided
however, that any such action shall not adversely affect the interests of the
holders of the Debentures then outstanding (it being understood, for purposes
of this proviso, that transfer restrictions on Debentures substantially
similar to those that were applicable to Capital Securities shall not be
deemed to materially adversely affect the holders of the Debentures);
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures and to add to
or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee;
(f) to make any change (other than as elsewhere provided in this
paragraph) that does not adversely affect the rights of any Securityholder in
any material respect; or
(g) to provide for the issuance of and establish the form and terms
and conditions of the Debentures, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or the
Debentures, or to add to the rights of the holders of Debentures.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the
Trustee shall not be obligated to, but may in its discretion, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 9.1 may be executed by the Company and the Trustee without the consent
of the holders of any of the Debentures at the time outstanding,
notwithstanding any of the provisions of Section 9.2.
Section 9.2. Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Section 7.1) of the holders of not
less than a majority in aggregate principal amount of the Debentures at the
time outstanding affected by such supplemental indenture (voting as a class),
the Company, when authorized by a Board Resolution, and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debentures; provided, however, that no such supplemental indenture
shall without the consent of the holders of each Debenture then outstanding
and affected thereby (i) change the fixed maturity of any Debenture, or reduce
47
the principal amount thereof or any premium thereon, or reduce the rate or
extend the time of payment of interest thereon, or reduce any amount payable
on redemption thereof or make the principal thereof or any interest or premium
thereon payable in any coin or currency other than that provided in the
Debentures, or impair or affect the right of any Securityholder to institute
suit for payment thereof or impair the right of repayment, if any, at the
option of the holder, or (ii) reduce the aforesaid percentage of Debentures
the holders of which are required to consent to any such supplemental
indenture; provided further, however, that if the Debentures are held by a
trust or a trustee of such trust, such supplemental indenture shall not be
effective until the holders of a majority in Liquidation Amount of Trust
Securities shall have consented to such supplemental indenture; provided
further, however, that if the consent of the Securityholder of each
outstanding Debenture is required, such supplemental indenture shall not be
effective until each holder of the Trust Securities shall have consented to
such supplemental indenture.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion, but shall not be obligated
to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Debenture Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section 9.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Section 9.3. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Company and the
holders of Debentures shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 9.4. Notation on Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article IX may bear a notation as to any matter provided
for in such supplemental indenture. If the Company or the Trustee shall so
determine, new Debentures so modified as to conform, in the opinion of the
Board of Directors of the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by
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the Company, authenticated by the Trustee or the Authenticating Agent and
delivered in exchange for the Debentures then outstanding.
Section 9.5. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee. The Trustee, subject to the provisions of Sections 6.1
and 6.2, shall, in addition to the documents required by Section 14.6, receive
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
any supplemental indenture executed pursuant hereto complies with the
requirements of this Article IX. The Trustee shall receive an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed
pursuant to this Article IX is authorized or permitted by, and conforms to,
the terms of this Article IX and that it is proper for the Trustee under the
provisions of this Article IX to join in the execution thereof
ARTICLE X.
REDEMPTION OF SECURITIES
Section 10.1. Optional Redemption. The Company shall have the right
(subject to the receipt by the Company of prior approval (i) if the Company is
a bank holding company, from the Federal Reserve, if then required under
applicable capital guidelines or policies of the Federal Reserve or (ii) if
the Company is a savings and loan holding company, from the OTS if then
required under applicable capital guidelines or policies of the OTS), to
redeem the Debentures, in whole or in part, but in all cases in a principal
amount with integral multiples of $1,000.00, on any Interest Payment Date on
or after October 1, 2008, at the Redemption Price.
Section 10.2. Special Event Redemption. If a Special Event shall
occur and be continuing, the Company shall have the right (subject to the
receipt by the Company of prior approval (i) if the Company is a bank holding
company, from the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve or (ii) if the Company is a
savings and loan holding company, from the OTS if then required under
applicable capital guidelines or policies of the OTS) to redeem the Debentures
in whole, but not in part, at any Interest Payment Date, within 120 days
following the occurrence of such Special Event at the Redemption Price.
Section 10.3. Notice of Redemption; Selection of Debentures. In case
the Company shall desire to exercise the right to redeem all, or, as the case
may be, any part of the Debentures, it shall cause to be mailed a notice of
such redemption at least 30 and not more than 60 days prior to the Redemption
Date to the holders of Debentures so to be redeemed as a whole or in part at
their last addresses as the same appear on the Debenture Register. Such
mailing shall be by first class mail. The notice if mailed in the manner
herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the holder of any Debenture
designated for redemption as a whole or in part shall not affect the validity
of the proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the CUSIP number, if
any, of the Debentures to be redeemed, the Redemption Date, the Redemption
Price at which Debentures are to be redeemed, the place or places of payment,
49
that payment will be made upon presentation and surrender of such Debentures,
that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. In the event that
any date on which the Redemption Price is payable is not a Business Day, then
payment of the Redemption Price payable on such date shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on the date such payment was originally payable. If less than all the
Debentures are to be redeemed, the notice of redemption shall specify the
number of the Debentures to be redeemed. In case the Debentures are to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Debenture, a new Debenture
or Debentures in principal amount equal to the unredeemed portion thereof will
be issued.
Prior to 10:00 a.m. New York City time on the Redemption Date, the
Company will deposit with the Trustee or with one or more paying agents an
amount of money sufficient to redeem on the Redemption Date all the Debentures
so called for redemption at the appropriate Redemption Price, together with
accrued interest to the Redemption Date.
If all, or less than all, the Debentures are to be redeemed, the
Company will give the Trustee notice not less than 45 nor more than 60 days,
respectively, prior to the Redemption Date, as to the aggregate principal
amount of Debentures to be redeemed and the Trustee shall select, in such
manner as in its sole discretion it shall deem appropriate and fair, the
Debentures or portions thereof (in integral multiples of $1,000.00) to be
redeemed.
Section 10.4. Payment of Debentures Called for Redemption. If notice
of redemption has been given as provided in Section 10.3, the Debentures or
portions of Debentures with respect to which such notice has been given shall
become due and payable on the Redemption Date and at the place or places
stated in such notice at the applicable Redemption Price, together with
interest accrued to the Redemption Date, and on and after said date (unless
the Company shall default in the payment of such Debentures at the Redemption
Price, together with interest accrued to said date) interest on the Debentures
or portions of Debentures so called for redemption shall cease to accrue. On
presentation and surrender of such Debentures at a place of payment specified
in said notice, such Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable Redemption Price, together
with interest accrued thereon to the Redemption Date.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debenture
or Debentures of authorized denominations, in principal amount equal to the
unredeemed portion of the Debenture so presented.
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ARTICLE XI.
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 11.1. Company May Consolidate, etc., on Certain Terms. Nothing
contained in this Indenture or in the Debentures shall prevent any
consolidation or merger of the Company with or into any other Person (whether
or not affiliated with the Company) or successive consolidations or mergers in
which the Company or its successor or successors shall be a party or parties,
or shall prevent any sale, conveyance, transfer or other disposition of the
property or capital stock of the Company or its successor or successors as an
entirety, or substantially as an entirety, to any other Person (whether or not
affiliated with the Company, or its successor or successors) authorized to
acquire and operate the same; provided, however, that the Company hereby
covenants and agrees that, upon any such consolidation, merger (where the
Company is not the surviving corporation), sale, conveyance, transfer or other
disposition, the due and punctual payment of the principal of (and premium, if
any) and interest on all of the Debentures in accordance with their terms,
according to their tenor, and the due and punctual performance and observance
of all the covenants and conditions of this Indenture to be kept or performed
by the Company, shall be expressly assumed by supplemental indenture
satisfactory in form to the Trustee executed and delivered to the Trustee by
the entity formed by such consolidation, or into which the Company shall have
merged, or by the entity which shall have acquired such property.
Section 11.2. Successor Entity to be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or other disposition by the
successor entity, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium if any, and interest on all of the
Debentures and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed or observed by the
Company, such successor entity shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the Company,
and thereupon the predecessor entity shall be relieved of any further
liability or obligation hereunder or upon the Debentures. Such successor
entity thereupon may cause to be signed, and may issue in its own name, any or
all of the Debentures issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee or the Authenticating
Agent; and, upon the order of such successor entity instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee or the Authenticating Agent shall authenticate and
deliver any Debentures which previously shall have been signed and delivered
by the officers of the Company, to the Trustee or the Authenticating Agent for
authentication, and any Debentures which such successor entity thereafter
shall cause to be signed and delivered to the Trustee or the Authenticating
Agent for that purpose. All the Debentures so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Debentures
theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution hereof.
Section 11.3. Opinion of Counsel to be Given to Trustee. The Trustee,
subject to the provisions of Sections 6.1 and 6.2, shall receive, in addition
to the Opinion of Counsel required by Section 9.5, an Opinion of Counsel as
conclusive evidence that any consolidation, merger, sale, conveyance, transfer
or other disposition, and any assumption, permitted or required by the terms
of this Article XI complies with the provisions of this Article XI.
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ARTICLE XII.
SATISFACTION AND DISCHARGE OF INDENTURE
Section 12.1. Discharge of Indenture. When
(a) the Company shall deliver to the Trustee for cancellation all
Debentures theretofore authenticated (other than any Debentures which shall
have been destroyed, lost or stolen and which shall have been replaced or paid
as provided in Section 2.6) and not theretofore canceled, or
(b) all the Debentures not theretofore canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within 1 year or are to be called for
redemption within one (1) year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds, which shall be immediately due and payable,
sufficient to pay at maturity or upon redemption all of the Debentures (other
than any Debentures which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.6) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to such date of maturity or
redemption date, as the case may be, but excluding, however, the amount of any
moneys for the payment of principal of, and premium, if any, or interest on
the Debentures (1) theretofore repaid to the Company in accordance with the
provisions of Section 12.4, or (2) paid to any state or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in the
case of either clause (a) or clause (b) the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect except for the provisions of Sections 2.5,
2.6, 2.8, 3.1, 3.2, 3.4, 6.6, 6.8, 6.9 and 12.4 hereof shall survive until
such Debentures shall mature and be paid. Thereafter, Sections 6.6 and 12.4
shall and the Trustee, on demand of the Company accompanied by 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, and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture. The Company agrees to reimburse the Trustee for
any costs or expenses thereafter reasonably and properly incurred by the
Trustee in connection with this Indenture or the Debentures.
Section 12.2. Deposited Moneys to be Held in Trust by Trustee.
Subject to the provisions of Section 12.4, all moneys deposited with the
Trustee pursuant to Section 12.1 shall be held in trust in a non-interest
bearing account and applied by it to the payment, either directly or through
any paying agent (including the Company if acting as its own paying agent), to
the holders of the particular Debentures for the payment of which such moneys
have been deposited with the Trustee, of all sums due and to become due
thereon for principal, and premium, if any, and interest.
Section 12.3. Paying Agent to Repay Moneys Held. Upon the
satisfaction and discharge of this Indenture all moneys then held by any
paying agent of the Debentures (other than the Trustee) shall, upon demand of
the Company, be repaid to it or paid to the Trustee, and thereupon such paying
agent shall be released from all further liability with respect to such
moneys.
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Section 12.4. Return of Unclaimed Moneys. Any moneys deposited with
or paid to the Trustee or any paying agent for payment of the principal of,
and premium, if any, or interest on Debentures and not applied but remaining
unclaimed by the holders of Debentures for two (2) years after the date upon
which the principal of, and premium, if any, or interest on such Debentures,
as the case may be, shall have become due and payable, shall, subject to
applicable escheatment laws, be repaid to the Company by the Trustee or such
paying agent on written demand; and the holder of any of the Debentures shall
thereafter look only to the Company for any payment which such holder may be
entitled to collect, and all liability of the Trustee or such paying agent
with respect to such moneys shall thereupon cease.
ARTICLE XIII.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 13.1. Indenture and Debentures Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Debenture, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture,
or in any such Debenture, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, officer or director, as such, past, present or future, of the
Company or of any successor Person of the Company, either directly or through
the Company or any successor Person of the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise, it being expressly understood that all such liability
is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Debentures.
ARTICLE XIV.
MISCELLANEOUS PROVISIONS
Section 14.1. Successors. All the covenants, stipulations, promises
and agreements of the Company in this Indenture shall bind its successors and
assigns whether so expressed or not.
Section 14.2. Official Acts by Successor Entity. Any act or
proceeding by any provision of this Indenture authorized or required to be
done or performed by any board, committee or officer of the Company shall and
may be done and performed with like force and effect by the like board,
committee, officer or other authorized Person of any entity that shall at the
time be the lawful successor of the Company.
Section 14.3. Surrender of Company Powers. The Company by instrument
in writing executed by authority of at least 2/3 (two-thirds) of its Board of
Directors and delivered to the Trustee may surrender any of the powers
reserved to the Company and thereupon such power so surrendered shall
terminate both as to the Company, and as to any permitted successor.
53
Section 14.4. Addresses for Notices, etc. Any notice, consent,
direction, request, authorization, waiver or demand which by any provision of
this Indenture is required or permitted to be given, made, furnished or served
by the Trustee or by the Securityholders on or to the Company may be given or
served in writing by being deposited postage prepaid by registered or
certified mail in a post office letter box addressed (until another address is
filed by the Company, with the Trustee for the purpose) to the Company, 202 E.
Center Street, Warsaw, Indiana 46580 Attention: David M. Findlay. Any notice,
consent, direction, request, authorization, waiver or demand by any
Securityholder or the Company to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing
at the office of the Trustee, addressed to the Trustee, 225 Asylum Street,
Goodwin Square, Hartford, Connecticut, 06103 Attention: Vice President,
Corporate Trust Department, with a copy to U.S. Bank National Association,
P.O. Box 778, Boston, Massachusetts 02102-0778, Attention: Earl W. Dennison,
Jr., Corporate Trust Department. Any notice, consent, direction, request,
authorization, waiver or demand on or to any Securityholder shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in
writing at the address set forth in the Debenture Register.
Section 14.5. Governing Law. This Indenture and each Debenture shall
be deemed to be a contract made under the law of the State of New York, and
for all purposes shall be governed by and construed in accordance with the law
of said State, without regard to conflict of laws principles thereof.
Section 14.6. Evidence of Compliance with Conditions Precedent. Upon
any application or demand by the Company to the Trustee to take any action
under any of the provisions of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that in the opinion of the
signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (1) a statement that the
person making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (4) a statement as to whether or not
in the opinion of such person, such condition or covenant has been complied
with.
Section 14.7. Non-Business Days. In any case where the date of
payment of interest on or principal of the Debentures will be a day that is
not a Business Day, the payment of such interest on or principal of the
Debentures need not be made on such date but may be made on the next
succeeding Business Day with the same force and effect as if made on the
original date of payment, and no interest shall accrue for the period from and
after such date.
54
Section 14.8. Table of Contents, Headings, etc. The table of contents
and the titles and headings of the articles and sections of this Indenture
have been inserted for convenience of reference only, are not to be considered
a part hereof, and shall in no way modify or restrict any of the terms or
provisions hereof.
Section 14.9. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original,
but such counterparts shall together constitute but one and the same
instrument.
Section 14.10. Separability. In case any one or more of the
provisions contained in this Indenture or in the Debentures shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Indenture or of such Debentures, but this Indenture and
such Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
Section 14.11. Assignment. The Company will have the right at all
times to assign any of its rights or obligations under this Indenture to a
direct or indirect wholly owned Subsidiary of the Company, provided that, in
the event of any such assignment, the Company will remain liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and
inures to the benefit of the parties hereto and their respective successors
and assigns. This Indenture may not otherwise be assigned by the parties
hereto.
Section 14.12. Acknowledgment of Rights. The Company agrees that,
with respect to any Debentures held by the Trust or the Institutional Trustee
of the Trust, if the Institutional Trustee of the Trust fails to enforce its
rights under this Indenture as the holder of Debentures held as the assets of
such Trust after the holders of a majority in Liquidation Amount of the
Capital Securities of such Trust have so directed such Institutional Trustee,
a holder of record of such Capital Securities may, to the fullest extent
permitted by law, institute legal proceedings directly against the Company to
enforce such Institutional Trustee's rights under this Indenture without first
instituting any legal proceedings against such trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest (or premium, if any) or principal on the Debentures on the date such
interest (or premium, if any) or principal is otherwise payable (or in the
case of redemption, on the redemption date), the Company agrees that a holder
of record of Capital Securities of the Trust may directly institute a
proceeding against the Company for enforcement of payment to such holder
directly of the principal of (or premium, if any) or interest on the
Debentures having an aggregate principal amount equal to the aggregate
Liquidation Amount of the Capital Securities of such holder on or after the
respective due date specified in the Debentures.
ARTICLE XV.
SUBORDINATION OF DEBENTURES
Section 15.1. Agreement to Subordinate. The Company covenants and
agrees, and each holder of Debentures by such Securityholder's acceptance
thereof likewise covenants and agrees, that all Debentures shall be issued
55
subject to the provisions of this Article XV; and each holder of a Debenture
whether upon original issue or upon transfer or assignment thereof, accepts
and agrees to be bound by such provisions.
The payment by the Company of the principal of, and premium, if any,
and interest on all Debentures shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any
default or Event of Default hereunder.
Section 15.2. Default on Senior Indebtedness. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any other payment due on any Senior Indebtedness of the
Company following any grace period, or in the event that the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default,
then, in either case, no payment shall be made by the Company with respect to
the principal (including redemption) of, or premium, if any, or interest on
the Debentures.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.2, such payment shall, subject to Section 15.7,
be held in trust for the benefit of, and shall be paid over or delivered to,
the holders of Senior Indebtedness or their respective representatives, or to
the trustee or trustees under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that the holders of the Senior Indebtedness (or
their representative or representatives or a trustee) notify the Trustee in
writing within 90 days of such payment of the amounts then due and owing on
the Senior Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness.
Section 15.3 Liquidation, Dissolution, Bankruptcy. Upon any payment
by the Company or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution, winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in
accordance with its terms, before any payment is made by the Company, on
account of the principal (and premium, if any) or interest on the Debentures.
Upon any such dissolution or winding-up or liquidation or reorganization, any
payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, which the
Securityholders or the Trustee would be entitled to receive from the Company,
except for the provisions of this Article XV, shall be paid by the Company, or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the Securityholders or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, as calculated
by the Company) or their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing
such Senior Indebtedness may have been issued, as their respective interests
56
may appear, to the extent necessary to pay such Senior Indebtedness in full,
in money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee before all Senior Indebtedness is paid in full, or provision is
made for such payment in money in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued. as their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness, remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XV with respect to the Debentures to the payment of all Senior
Indebtedness, that may at the time be outstanding, provided that (i) such
Senior Indebtedness is assumed by the new corporation, if any, resulting from
any such reorganization or readjustment, and (ii) the rights of the holders of
such Senior Indebtedness are not, without the consent of such holders, altered
by such reorganization or readjustment. The consolidation of the Company with,
or the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XI of this
Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article XI of this Indenture. Nothing in Section
15.2 or in this Section shall apply to claims of, or payments to, the Trustee
under or pursuant to Section 6.6 of this Indenture.
Section 15.4. Subrogation. Subject to the payment in full of all
Senior Indebtedness, the Securityholders shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments or distributions
of cash, property or securities of the Company, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Debentures shall be paid in full. For the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Securityholders or the Trustee would
be entitled except for the provisions of this Article XV, and no payment over
pursuant to the provisions of this Article XV to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall,
as between the Company, its creditors other than holders of Senior
57
Indebtedness of the Company, and the holders of the Debentures be deemed to be
a payment or distribution by the Company to or on account of such Senior
Indebtedness. It is understood that the provisions of this Article XV are and
are intended solely for the purposes of defining the relative rights of the
holders of the Securities, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture
or in the Debentures is intended to or shall impair, as between the Company,
its creditors other than the holders of Senior Indebtedness, and the holders
of the Debentures, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the holders of the Debentures and
creditors of the Company, other than the holders of Senior Indebtedness, nor
shall anything herein or therein prevent the Trustee or the holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article XV of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee, subject to the provisions of Article VI of
this Indenture, and the Securityholders shall be entitled to conclusively 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 receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Securityholders, for the purposes of ascertaining the
Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XV.
Section 15.5. Trustee to Effectuate Subordination. Each
Securityholder by such Securityholder's acceptance thereof authorizes and
directs the Trustee on such Securityholder's behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided in this
Article XV and appoints the Trustee such Securityholder's attorney-in-fact for
any and all such purposes.
Section 15.6. Notice by the Company. The Company shall give prompt
written notice to a Responsible Officer of the Trustee at the Principal Office
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures
pursuant to the provisions of this Article XV. Notwithstanding the provisions
of this Article XV or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
58
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section at least two (2) Business Days prior to the
date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of (or
premium, if any) or interest on any Debenture), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary
that may be received by it within two (2) Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder), to
establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
such Senior Indebtedness to participate in any payment or distribution
pursuant to this Article XV, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
such Senior Indebtedness held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article XV, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 15.7. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article XV in respect of any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XV, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into this Indenture against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Article VI of this Indenture, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall pay over
or deliver to Securityholders, the Company or any other Person money or assets
to which any holder of such Senior Indebtedness shall be entitled by virtue of
this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.6.
Section 15.8. Subordination May Not Be Impaired. No right of any
present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company, or by any act or failure
59
to act, in good faith, by any such holder, or by any noncompliance by the
Company, with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing
or releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debentures to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
such Senior Indebtedness, or otherwise amend or supplement in any manner such
Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any
manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company, and any other Person.
Signatures appear on the following page
60
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed by their respective officers thereunto duly authorized, as of
the day and year first above written.
LAKELAND FINANCIAL CORPORATION
By: /s/ David M. Findlay
Name: David M. Findlay
Title: EVP /CFO
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Earl W. Dennison, Jr.
Name: Earl W. Dennison, Jr.
Title: Vice President
61
EXHIBIT A
FORM OF JUNIOR SUBORDINATED DEBENTURE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT
IN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE
COMPANY.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE- CODE OF 1986, AS AMENDED (THE "CODE")
(EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF
AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS
PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA
OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT
AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN
TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING AN AGGREGATE PRINCIPAL AMOUNT OF NOT LESS THAN $500,000.00 AND
MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS
SECURITY IN A BLOCK HAVING AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN
$500,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE
FOREGOING RESTRICTIONS.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
Floating Rate Junior Subordinated Deferrable Interest Debenture
of
LAKELAND FINANCIAL CORPORATION
October 1, 2003
Lakeland Financial Corporation, an Indiana corporation (the "Company"
which term includes any successor Person under the Indenture hereinafter
referred to), for value received promises to pay to U.S. Bank National
Association, not in its individual capacity but solely as Institutional
Trustee for Lakeland Statutory Trust II (the "Holder") or registered assigns,
the principal sum of THIRTY MILLION NINE HUNDRED TWENTY-EIGHT THOUSAND DOLLARS
($30,928,000) on October 1, 2033, and to pay interest on said principal sum
from the date of original issuance, or from the most recent interest payment
date (each such date, an "Interest Payment Date") to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth herein)
in arrears on March 31, June 30, September 30 and December 31 of each year
commencing December 31, 2003, at an annual rate equal to 4.21% beginning on
(and including) the date of original issuance and ending on (but excluding)
December 31, 2003 and at an annual rate for each successive period beginning
on (and including) December 31, 2003, and each succeeding Interest Payment
Date, and ending on (but excluding) the next succeeding Interest Payment Date
(each a "Distribution Period"), equal to 3-Month LIBOR, determined as
described below, plus 3.05% (the "Coupon Rate"), applied to the principal
amount hereof, until the principal hereof is paid or duly provided for or made
available for payment, and on any overdue principal and (without duplication)
on any overdue installment of interest at the same rate per annum, compounded
quarterly, from the dates such amounts are due until they are paid or made
available for payment. The amount of interest payable for any period will be
computed on the basis of the actual number of days in the Distribution Period
concerned divided by 360. In the event that any date on which interest is
payable on this Debenture is not a Business Day, then a payment of the
interest payable on such date will be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any
such delay), with the same force and effect as if made on the date the payment
was originally payable. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the Person in whose name this Debenture (or one or
more Predecessor Securities) is registered at the close of business on the
regular record date for such interest installment, which shall be fifteen days
prior to the day on which the relevant Interest Payment Date occurs. Any such
interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such regular record date and
may be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a special
record date.
"3-Month LIBOR" as used herein, means the London interbank offered
rate for three-month U.S. dollar deposits determined by the Trustee in the
following order of priority: (i) the rate (expressed as a percentage per
annum) for U.S. dollar deposits of an amount equal or comparable to the
aggregate liquidation amount of the Debentures having a three-month maturity
that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
particular Determination Date ("Telerate Page 3750" means the display
designated as "Page 3750" on the Dow Jones Telerate Service or such other page
as may replace Page 3750 on that service or such other service or services as
may be nominated by the British Bankers' Association as the information vendor
for the purpose of displaying London interbank offered rates for U.S. dollars
deposits); (ii) if such rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on the Determination Date, 3-Month LIBOR will be the
arithmetic mean of the rates (expressed as percentages per annum) for U.S.
dollar deposits of an amount equal or comparable to the aggregate liquidation
amount of the Debentures having a three-month maturity that appear on Reuters
Monitor Money Rates Page LIBOR ("Reuters Page LIBO") as of 11:00 a.m. (London
time) on such Determination Date; (iii) if such rate does not appear on
Reuters Page LIBO as of 11:00 a.m. (London time) on the related Determination
Date, the Trustee will request the principal London offices of four leading
banks in the London interbank market to provide such banks' offered quotations
(expressed as percentages per annum) to prime banks in the London interbank
market for U.S. dollar deposits of an amount equal or comparable to the
aggregate liquidation amount of the Debentures having a three-month maturity
as of 11:00 a.m. (London time) on such Determination Date, and if at least two
quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations; and (iv) if fewer than two such quotations are provided as
requested in clause (iii) above, the Trustee will request four major New York
City banks to provide such banks' offered quotations (expressed as percentages
per annum) to leading European banks for loans in U.S. dollars of an amount
equal or comparable to the aggregate liquidation amount of the Debentures as
of 11:00 a.m. (London time) on such Determination Date, and if at least two
such quotations are provided, 3-Month LIBOR will be the arithmetic mean of
such quotations. If the rate for U.S. dollar deposits of an amount equal or
comparable to the aggregate liquidation amount of the Debentures having a
three-month maturity that initially appears on Telerate Page 3750 or Reuters
Page LIBO, as the case may be, as of 11:00 a.m. (London time) on the related
Determination Date is superseded on the Telerate Page 3750 or Reuters Page
LIBO, as the case may be, by a corrected rate by 12:00 noon (London time) on
such Determination Date, then the corrected rate as so substituted on the
applicable page will be the applicable 3-Month LIBOR for such Determination
Date. As used herein, "Determination Date" means the date that is two London
Banking Days (i.e., a day in which dealings in deposits in U.S. dollars are
transacted in the London interbank market) preceding the commencement of the
relevant Distribution Period.
In the event that the 3-Month LIBOR is indeterminable by the methods
described above, the Coupon Rate shall equal the 3-Month LIBOR in effect on
the most recent Determination Date (whether or not 3-Month LIBOR for such
period was in fact determined on such Determination Date) plus 3.05%.
The Coupon Rate for any Distribution Period will at no time be higher
than the maximum rate then permitted by New York law as the same may be
modified by United States law.
All percentages resulting from any calculations on the Debentures will
be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% or .09876545 being rounded to 9.87655% or .0987655),
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward).
The principal of and interest on this Debenture shall be payable at
the office or agency of the Trustee (or other paying agent appointed by the
Company) maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made by check mailed to the registered holder at such address as shall appear
in the Debenture Register if a request for a wire transfer by such holder has
not been received by the Company or by wire transfer to an account
appropriately designated by the holder hereof. Notwithstanding the foregoing,
so long as the holder of this Debenture is the Institutional Trustee, the
payment of the principal of and interest on this Debenture will be made in
immediately available funds at such place and to such account as may be
designated by the Trustee.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, from time to time, and without causing an Event
of Default, to defer payments of interest on the Debentures by extending the
interest payment period on the Debentures at any time and from time to time
during the term of the Debentures, for up to 20 consecutive quarterly periods
(each such extended interest payment period, an "Extension Period"), during
which Extension Period no interest (including Additional Interest) shall be
due and payable. No Extension Period may end on a date other than an Interest
Payment Date. At the end of any such Extension Period the Company shall pay
all interest then accrued and unpaid on the Debentures (together with
Additional Interest thereon); provided, however, that no Extension Period may
extend beyond the Maturity Date; provided further, however, that during any
such Extension Period, the Company shall not and shall not permit any
Affiliate to (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's or such Affiliate's capital stock (other than payments of dividends
or distributions to the Company) or make any guarantee payments with respect
to the foregoing or (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company or any Affiliate that rank pari passu in all respects with or junior
in interest to the Debentures (other than, with respect to clauses (i) and
(ii) above, (a) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Company (or securities convertible into
or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of any exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of
the Company's indebtedness for any class or series of the Company's capital
stock, (c) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholders' rights plan, or
the issuance of rights, stock or other property under any stockholders' rights
plan, or the redemption or repurchase of rights pursuant thereto, (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options
or other rights is the same stock as that on which the dividend is being paid
or ranks pari passu with or junior to such stock and any cash payments in lieu
of fractional shares issued in connection therewith, or (f) payments under the
Capital Securities Guarantee). Prior to the termination of any Extension
Period, the Company may further extend such period, provided that such period
together with all such previous and further consecutive extensions thereof
shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and Additional Interest, the
Company may commence a new Extension Period, subject to the foregoing
requirements. No interest or Additional Interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension
Period shall bear Additional Interest. The Company must give the Trustee
notice of its election to begin or extend such Extension Period at least five
(5) Business Days prior to the regular record date (as such term is used in
Section 2.8 of the Indenture) immediately preceding the Interest Payment Date
with respect to which interest on the Debentures would have been payable
except for the election to begin or extend such Extension Period.
Subject to the Company having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of
the Federal Reserve, the Company may redeem this Debenture prior to the
Maturity Date in the manner and at the times set forth in the Indenture.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each holder
of this Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination so provided and (c) appoints the Trustee his or
her attorney-in-fact for any and all such purposes. Each holder hereof, by his
or her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder
of Senior Indebtedness, whether now outstanding or hereafter incurred, and
waives reliance by each such holder upon said provisions.
This Debenture shall be deemed to be a contract made under the law of
the State of New York, and for all purposes shall be governed by and construed
with the law of said State, without regard to conflict of laws principles
thereof.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been signed
by or on behalf of the Trustee.
Capitalized terms used and not defined in this Debenture shall have
the meanings assigned in the Indenture duly executed and dated as of the date
of original issuance of this Debenture between the Trustee and the Company.
The Indenture contains a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Debentures and of the terms upon which the Debentures are,
and are to be, authenticated and delivered.
(continued)
IN WITNESS WHEREOF, the Company has duly executed this certificate.
LAKELAND FINANCIAL CORPORATION
By: /s/ David M. Findlay
Name: David M. Findlay
Title: EVP/CFO
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures referred to in the within-mentioned
Indenture.
U.S. Bank National Association,
as Trustee
By: /s/ Earl W. Dennison, Jr.
Authorized Officer