Exhibit 2.5
__________________________________________
SOVEREIGN BANCORP, INC.
To
BNY MIDWEST TRUST COMPANY
(as successor to Harris Trust and Savings Bank)
as Trustee
_________________
SECOND SUPPLEMENTAL INDENTURE
Dated as of December 13, 2001
_________________
8.75% Junior Subordinated Deferrable Interest Debentures due
December 31, 2031
__________________________________________
SECOND SUPPLEMENTAL INDENTURE, dated as of
December 13, 2001 (this "Second Supplemental Indenture"),
between SOVEREIGN BANCORP, INC., a Pennsylvania corporation (the
"Company"), having its principal place of business at
1130 Berkshire Boulevard, Wyomissing, Pennsylvania 19610 and BNY
MIDWEST TRUST COMPANY (as successor to Harris Trust And Savings
Bank), an Illinois corporation, as trustee (the "Trustee"),
having its corporate trust office at 311 West Monroe Street,
12th Floor, Chicago, Illinois 60606, under the Indenture, dated
as of September 1, 1999, between the Company and the Trustee
(the "Base Indenture", together with this Second Supplemental
Indenture, the "Indenture").
WHEREAS, the Company executed and delivered the Base
Indenture to the Trustee to provide for the issuance from time
to time of the Company's unsecured debentures, notes or other
evidences of indebtedness (collectively the "Debt Securities,"
and individually, a "Debt Security") to be issued in one or more
series as might be determined by the Company under the Base
Indenture, in an unlimited aggregate principal amount which may
be authenticated and delivered as provided in the Base
Indenture;
WHEREAS, the Company and the Trustee entered into a
First Supplemental Indenture dated as of November 15, 1999,
pursuant to which the Company issued its 7.50% Junior
Subordinated Deferrable Interest Debentures due 2030;
WHEREAS, pursuant to the terms of this Second
Supplemental Indenture, the Company desires to provide for the
establishment of a new series of Debt Securities to be known as
the 8.75% Junior Subordinated Deferrable Interest Debentures due
December 31, 2031 (the "Debentures"), the form and substance of
such Debentures and the terms, provisions and conditions thereof
to be as set forth in the Indenture;
WHEREAS, Sovereign Capital Trust III, a Delaware
statutory business trust (the "Trust"), has offered to the
public $100,000,000 in aggregate stated liquidation amount of
its 8.75% Preferred Capital Securities (the "Preferred
Securities") and, in connection therewith, the Company has
agreed to purchase $3,092,800 in aggregate stated liquidation
amount of the Trust's common securities (the "Common Securities"
and, together with the Preferred Securities, the "Trust
Securities"), each representing an undivided beneficial
ownership interest in the assets of the Trust, and proposes to
invest the proceeds from such offerings in $103,092,800
aggregate principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee
execute and deliver this Second Supplemental Indenture, all
requirements necessary to make this Second Supplemental
Indenture a valid instrument in accordance with its terms (and
to make the Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid
obligations of the Company) have been performed, and the
execution and delivery of this Second Supplemental Indenture has
been duly authorized in all respects.
NOW, THEREFORE, in consideration of the purchase and
acceptance of the Debentures by the Holders (as defined below)
thereof, and for the purpose of setting forth, as provided in
the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants
and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms.
Unless the context otherwise requires:
(a) a term not defined herein that is defined in the
Base Indenture has the same meaning when used in this Second
Supplemental Indenture;
(b) a term defined anywhere in this Second
Supplemental Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a
Section or Article of this First Supplemental Indenture;
(e) headings are for convenience of reference only
and do not affect interpretation;
(f) the following terms have the following meanings:
"Administrative Trustees" has the meaning set
forth in the Declaration.
"Base Indenture" has the meaning set forth in the
Recitals.
"Business Day" has the meaning set forth in the
Declaration.
"Common Securities" has the meaning set forth in
the Recitals.
"Company" has the meaning set forth in the
Recitals.
"Compounded Interest" has the meaning set forth
in Section 2.5(a).
"Coupon Rate" has the meaning set forth in
Section 2.4(a).
"Debenture Distribution Notice" has the meaning
set forth in Section 6.2(b) of the Declaration.
"Debenture Issuer" has the meaning set forth in
the Declaration.
"Debentures" has the meaning set forth in the
Recitals.
"Debt Securities" or "Debt Security" has the
meaning set forth in the Recitals.
"Declaration" means the Amended and Restated
Declaration of Trust of the Trust, dated as of December 13,
2001, among the Debenture Issuer, in its capacity as
Sponsor, the initial Administrative Trustees, The Bank of
New York, as Property Trustee, and The Bank of New York
(Delaware), as Delaware Trustee, as amended and restated
from time to time.
"Delaware Trustee" has the meaning set forth in
the Declaration.
"Direct Action" has the meaning set forth in
Section 7.2.
"Distribution Date" has the meaning set forth in
the Declaration.
"Distributions" have the meaning set forth in the
Declaration.
"Event of Default" has the meaning set forth in
Section 2.10.
"Exchange Agent" has the meaning set forth in the
Declaration.
"Extension Period" has the meaning set forth in
Section 2.5(a).
"Global Debenture" has the meaning set forth in
Section 2.3(a).
"Holder" means a Person in whose name a Debenture
is registered.
"Indenture" has the meaning set forth in the
Recitals.
"Like Amount" has the meaning set forth in the
Declaration.
"90 Day Period" has the meaning set forth in the
Declaration.
"Non Book-Entry Preferred Securities" has the
meaning set forth in Section 2.3(b).
"No Recognition Opinion" has the meaning set
forth in Section 6.2(b) of the Declaration.
"Officers' Certificate" has the meaning set forth
in the Declaration.
"Opinion of Counsel" means the written opinion of
counsel rendered by an independent law firm which shall be
acceptable to the Trustee.
"Payment Blockage Notice" has the meaning set
forth in Section 6.1(d).
"Preferred Securities" has the meaning set forth
in the Recitals.
"Capital Securities Guaranty" has the meaning set
forth in the Declaration.
"Preferred Security Certificate" means a
certificate in fully registered form representing Preferred
Securities, substantially in the form of Exhibit A-1 to the
Declaration.
"Property Trustee" has the meaning set forth in
the Declaration.
"Pro Rata" has the meaning set forth in the
Declaration.
"Second Supplemental Indenture" has the meaning
set forth in the Recitals.
"Senior Indebtedness" means the principal of,
premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on
and all fees, costs, expenses and other amounts accrued or
due on or in connection with:
(1) all indebtedness, obligations and other
liabilities (contingent or otherwise) of the Company
for borrowed money (including obligations of the
Company in respect of overdrafts and any loans or
advances from banks, whether or not evidenced by notes
or similar instruments) or evidenced by bonds,
debentures, notes or other instruments for the payment
of money, or incurred in connection with the
acquisition of any properties or assets (whether or
not the recourse of the lender is to the whole of the
assets of the Company or to only a portion thereof),
other than any account payable or other accrued
current liability or obligation to trade creditors
incurred in the ordinary course of business in
connection with the obtaining of materials or
services;
(2) all obligations and liabilities
(contingent or otherwise) in respect of leases of the
Company required or permitted, in conformity with
generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the
balance sheet of the Company;
(3) all obligations for the reimbursement
of any letter of credit, bankers acceptance, security
purchase facility or similar credit transaction;
(4) all direct or indirect guaranties or
similar agreements by the Company in respect of, and
obligations or liabilities (contingent or otherwise)
of the Company to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect
of, indebtedness, obligations or liabilities of
another Person of the kind described in clauses (1)
and (2);
(5) all obligations and liabilities of the
type referred to above of other persons secured by a
lien on any property of Sovereign;
(6) all obligations with respect to
securities contracts, foreign currency exchange
contracts, derivative instruments such as swap
agreements (including interest rate and foreign
exchange rate swap agreements), cap agreements, floor
agreements, collar agreements, interest rate
agreements, foreign exchange rate agreements, options,
commodity futures contracts, and commodity option
contracts;
(7) any and all amendments, renewals,
extensions and refundings of any indebtedness,
obligation or liability of the kind described in
clauses (1) through (6),
unless in the case of any particular indebtedness the instrument
creating or evidencing the same or the assumption or guarantee
thereof expressly provides that such indebtedness shall not be
senior in right of payment to the Debentures or expressly
provides that such Indebtedness is pari passu or junior to the
Debentures. "Senior Indebtedness" shall not include any
indebtedness between and among the Company or its affiliates,
including all other debt securities and guarantees in respect of
those debt securities, issued to any Company capital trust or
other trust or entity affiliated with the Company that is a
financing vehicle of the Company in connection with the issuance
of preferred securities or other securities that rank on a
parity with or junior to the Debentures.
"Special Event" has the meaning set forth in the
Declaration.
"Trust" has the meaning set forth in the
Recitals.
"Trust Securities" has the meaning set forth in
the Recitals.
"Trustee" has the meaning set forth in the
Recitals.
"Underwriters" means the entities acting as
underwriters of the Preferred Securities.
"Underwriting Agreement" has the meaning set
forth in the Declaration.
ARTICLE II
TERMS AND CONDITIONS OF THE DEBENTURES
Section 2.1 Designation and Principal Amount.
There is hereby authorized a series of Debt Securities
designated the "8.75% Junior Subordinated Deferrable Interest
Debentures due December 31, 2031," limited in aggregate
principal amount to $103,092,800.
Section 2.2 Maturity.
The stated maturity shall be December 31, 2031 (the
"Stated Maturity").
Section 2.3 Global Debentures.
If distributed to holders of Trust Securities in
connection with the involuntary or voluntary dissolution of the
Trust:
(a) The Debentures in definitive form may be
presented to the Trustee by the Property Trustee in exchange for
a global security in an aggregate principal amount equal to all
Outstanding Debentures (a "Global Debenture"). The Company upon
any such presentation shall execute a Global Debenture in such
aggregate principal amount and deliver the same to the Trustee
for authentication and delivery in accordance with the Base
Indenture and this Second Supplemental Indenture. The
Depositary for the Debentures will be The Depository Trust
Company. The Global Debentures will be registered in the name
of the Depositary or its nominee, Cede & Co., and delivered by
the Trustee to the Depositary or a custodian appointed by the
Depositary for crediting to the accounts of its participants
pursuant to the instructions of the Administrative Trustees.
Payments on the Debentures issued as a Global Debenture will be
made to the Depositary or its nominee.
(b) If any Preferred Securities are held in
definitive form, the Debentures in definitive form may be
presented to the Trustee by the Property Trustee, and any
Preferred Security Certificate which represents Preferred
Securities other than Preferred Securities held by the
depositary for the Preferred Securities or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent
beneficial ownership interests in Debentures presented to the
Trustee by the Property Trustee having an aggregate principal
amount equal to the aggregate stated liquidation amount of the
Non Book-Entry Preferred Securities until such Preferred
Security Certificates are presented to the Security Registrar
for transfer or reissuance, at which time such Preferred
Security Certificates will be canceled and a Debenture
registered in the name of the holder of the Preferred Security
Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate stated liquidation
amount of the Preferred Security Certificate canceled will be
executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with the Base
Indenture and this Second Supplemental Indenture. On issue of
such Debentures, Debentures with an equivalent aggregate
principal amount that were presented by the Property Trustee to
the Trustee will be deemed to have been canceled.
Section 2.4 Interest.
(a) Each Debenture will bear interest at a rate per
annum of 8.75% (the "Coupon Rate") of the principal amount of
$25 per Debenture from and including December 13, 2001 to, but
excluding, the Stated Maturity payable quarterly in arrears on
March 31, June 30, September 30, and December 31 of each year
(each, an "Interest Payment Date"), commencing on March 31,
2002.
(b) Interest not paid on the scheduled Interest
Payment Date will accrue and compound quarterly at the Coupon
Rate of the principal amount of the Debentures or the
liquidation value of the Debentures, as the case may be.
(c) The regular record dates for the Debentures (the
"Regular Record Dates") shall be:
(i) as long as the Debentures are represented by
a Global Debenture, the Business Day preceding the
corresponding Interest Payment Date; or
(ii) if the Debentures are issued in
definitive form, the fifteenth day of the month in which
the Interest Payment Date falls.
(d) The amount of interest payable on the
Debentures for any period will be computed:
(i) for any full 90-day quarterly period,
on the basis of a 360-day year of twelve 30-day
months;
(ii) for any period shorter than a full 90-
day quarterly period, on the basis of a 30-day month;
and
(iii) for any period shorter than a 30-day
month, on the basis of the actual number of days
elapsed in the 30-day month.
In the event that any date on which interest is
payable on the Debentures is not a Business Day, payment of the
interest payable on such date will be made on the next day that
is a Business Day (and without any additional interest or other
payment in respect of any such delay), except that, if such
Business Day is in the next calendar year, such payment will be
made on the preceding Business Day with the same force and
effect as if made on the date such payment was originally
payable.
Section 2.5 Optional Deferral of Interest.
(a) As long as no Event of Default has occurred and
is continuing, the Company has the right, at any time and from
time to time, to defer payments of interest on the Debentures by
extending the interest payment period on the Debentures for a
period (each, an "Extension Period") not exceeding
20 consecutive quarters, during which Extension Period no
interest shall be due and payable on the Debentures, provided
that no Extension Period shall end on a date other than an
Interest Payment Date for the Debentures or extend beyond the
Stated Maturity. Despite such deferral, interest shall continue
to accrue with additional interest thereon (to the extent
permitted by applicable law) at the Coupon Rate of the principal
amount of the Debentures, compounded quarterly during any such
Extension Period ("Compounded Interest"). Prior to the
termination of any such Extension Period, the Company may
further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together
with all such previous and further extensions of such Extension
Period, may not exceed 20 consecutive quarters or extend beyond
the Stated Maturity. At the termination of any Extension Period,
the Company shall pay all interest then accrued and unpaid, plus
Compounded Interest. Upon the termination of any Extension
Period and the payment of all amounts then due, the Company may
commence a new Extension Period, subject to the above
requirements.
(b) The procedure the Company must follow to exercise
its option to defer payments of interest on the Debentures for
an Extension Period shall be as follows:
(i) If the Property Trustee shall be the only
holder of the Debentures, the Company shall give notice of
its election of such extension period to the Property
Trustee, the Administrative Trustees and the Trustee at
least one Business Day prior to the earlier of:
(A) the next date on which Distributions on
the Preferred Securities are payable; or
(B) the date the Administrative Trustees
are required to give notice of the record date or the date
such Distributions are payable for the first quarter of
such Extension Period to (x) any national stock exchange or
other organization on which the Preferred Securities are
listed or quoted, if any, or (y) the holders of the
Preferred Securities; or
(ii) If the Property Trustee shall not be the
holder of the Debentures, the Company shall give notice of its
election of such extension period to the Holders at least ten
Business Days prior to the earlier of:
(A) the Interest Payment Date for the
first quarter of such Extension Period; or
(B) the date on which the Company is
required to give notice of the record date or the
payment date of such related interest payment for the
first quarter of such Extension Period to (x) any
national stock exchange or other organization on which
the Debentures are listed or quoted, if any, or
(y) the Holders.
Section 2.6 Redemption.
(a) The Company may redeem the Debentures, in whole
or in part, at any time and from time to time on or after
January 1, 2007, by giving written notice to the Holders not
less than 30 days and not more than 60 days prior to the date of
redemption.
(b) The Company may redeem the Debentures, in whole
but not in part, at any time after the occurrence and during the
continuance of a Special Event, by giving written notice thereof
to the Holders not less than 30 days and not more than 60 days
prior to the date of redemption.
(c) The Debentures shall not be subject to a sinking
fund provision.
Section 2.7 Limited Right to Require Exchange of Preferred
Securities and Repurchase of Debentures.
[Intentionally Omitted]
Section 2.8 Change of Control Right to Require Exchange of
Preferred Securities and Repurchase of Debentures.
[Intentionally Omitted]
Section 2.9 Distribution of Debentures in Exchange for Trust
Securities Upon the Occurrence of a Special Event.
(a) If at any time a Special Event occurs and certain
conditions set forth in Section 2.9(b) are satisfied, the
Administrative Trustees may dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust as
provided by applicable law, cause the Debentures held by the
Property Trustee to be distributed to the holders of Trust
Securities in liquidation of such holders' interests in the
Trust on a Pro Rata basis, upon not less than 30 nor more than
60 days' notice, within the 90 Day Period, and, simultaneous
with such distribution, to cause a Like Amount of the Trust
Securities to be exchanged by the Trust on a Pro Rata basis.
(b) The dissolution of the Trust and distribution of
the Debentures pursuant to Section 2.9(a) shall be permitted
only upon satisfaction of the following three conditions:
(i) the receipt by the Administrative Trustees
of a No Recognition Opinion;
(ii) neither the Trust nor the Company being
able to eliminate such Special Event by taking some
ministerial action (such as filing a form, making an
election or pursuing some other reasonable measure) that:
(A) has no material adverse effect on the
Trust, the Company or the holders of the Trust
Securities; or
(B) does not subject any of them to more
than de minimis regulatory requirements; and
(iii) the receipt by the Administrative Trustees
of the prior written consent of the Company.
(c) A Debenture Distribution Notice, which notice
shall be irrevocable, shall be given by the Trust by mail to
each holder of Trust Securities not fewer than 30 nor more than
60 days before the date of distribution of the Debentures. A
Debenture Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage
prepaid, to holders of Trust Securities. No defect in the
Debenture Distribution Notice or in the mailing of the Debenture
Distribution Notice with respect to any holder of Trust
Securities shall affect the validity of the exchange proceedings
with respect to any other holder of Trust Securities.
(d) On and from the date fixed by the Property
Trustee for any distribution of Debentures and liquidation of
the Trust:
(i) the Trust Securities no longer shall be
deemed to be outstanding;
(ii) the Depositary or its nominee (or any
successor Depositary or its nominee), as the holder of the
Preferred Securities, will receive a registered global
certificate or certificates representing the Debentures to
be delivered upon such distribution; and
(iii) any certificates representing Trust
Securities not held by the Depositary or its nominee (or
any successor Depositary or its nominee) shall be deemed to
represent Debentures having an aggregate principal amount
equal to the aggregate liquidation amount of such Trust
Securities and bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on
such Trust Securities, until such certificates are
presented for cancellation, at which time the Company shall
issue, and the Trustee shall authenticate, a certificate
representing such Debentures.
Section 2.10 Events of Default.
In addition to the events of default set forth in
Section 501 of the Base Indenture, it shall be an event of
default with respect to the Debentures if the following occurs
and shall be continuing (collectively, "Events of Default"):
(a) the Company defaults in the payment of the
principal of any of the Debentures when it becomes due and
payable at Stated Maturity, whether or not such payment is
prohibited by the subordination provisions of Article 6 of this
Second Supplemental Indenture;
(b) the Company defaults in the payment of interest
on any of the Debentures when it becomes due and payable and
such default continues for a period of 30 days after written
notice thereof is given 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,
whether or not such payment is prohibited by the subordination
provisions of Article 6 of this Second Supplemental Indenture;
provided, however, that a valid extension of the interest
payment period does not constitute a default in the payment of
interest;
(c) the Company fails to perform or observe any other
term, covenant or agreement contained in the Debentures or the
Indenture (other than a term, covenant or agreement included in
the Indenture solely for the benefit of any series of Debt
Securities other than the Debentures) and such default continues
for a period of 90 days after written notice of such failure
shall have been given 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; or
(d) the Trust shall have voluntarily or involuntarily
dissolved, wound up its business or otherwise terminated its
existence, except in connection with:
(i) the distribution of the Debentures held by
the Trust to the holders of the Trust Securities in
liquidation of their interests in the Trust;
(ii) the redemption of all of the outstanding
Trust Securities; or
(iii) a merger, consolidation, conversion,
amalgamation, replacement or other transaction involving
the Trust that is permitted under Section 3.15 of the
Declaration.
Section 2.11 Amendment; Supplement; Waiver.
(a) Amendment Without Consent of Holders.
Section 901 of the Base Indenture shall be superseded
by this Section 2.11(a).
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may amend the Indenture and the
Debentures to:
(i) add to the covenants of the Company for the
benefit of the Holders;
(ii) add to the Events of Default under the
Indenture;
(iii) surrender any right or power herein
conferred upon the Company;
(iv) provide for the assumption of the Company's
obligations to the Holders in the case of a merger,
consolidation, conveyance, transfer or lease pursuant to
Article 8 of the Base Indenture;
(v) comply with the requirements of the
Securities Exchange Commission in order to maintain the
qualification of the Indenture under the Trust Indenture
Act; or
(vi) cure any ambiguity, to correct or
supplement any provision herein which may be inconsistent
with any other provision herein or which is otherwise
defective, or to make any other provisions with respect to
matters or questions arising under the Indenture which the
Company and the Trustee may deem necessary or desirable and
which shall not be inconsistent with the provisions of the
Indenture, provided, that such action pursuant to this
clause (vi) does not adversely affect the interests of the
Holders in any material respect.
(b) Amendment With Consent of Holders.
Section 902 of the Base Indenture shall be
supplemented and amended by this Section 2.11(b).
With the consent of the Holders of not less than a
majority in aggregate principal amount of the Debentures and all
other series of Debt Securities affected at the time
Outstanding, voting as one class, the Company and the Trustee,
at any time and from time to time, may amend the Indenture and
the Debentures; provided, however, no such modification or
amendment shall be effective until the Holder of each Debenture
affected at the time Outstanding shall have consented to such
modification or amendment, if such modification or amendment
shall:
(i) change the Stated Maturity of the principal
of, or the time of payment of any installment of interest
on, any Debenture;
(ii) reduce the principal amount of, or the rate
of interest on, any Debenture;
(iii) change the place of payment where the
Debentures or any interest thereon is payable;
(iv) impair the right to institute suit for the
enforcement of any such payment on or with respect to the
Debentures;
(v) reduce the above-stated percentage of
principal amount of Debentures, the Holders of which are
required to modify or amend the Indenture, to consent to
any waiver thereunder or to approve any supplemental
indenture;
(vi) change any obligation of the Company to
maintain an office or agency in the place and for the
purposes required by the Indenture; or
(vii) modify any of the above provisions;
and provided, further, that no such modification or amendment
shall be effective until the holders of not less than 66-2/3% of
the aggregate stated liquidation amount of the Trust Securities
shall have consented to such modification or amendment; and
provided, further, that where the consent of the Holders of not
less than 66-2/3% of the aggregate principal amount of the
Debentures is required pursuant to Section 902 of the Base
Indenture, no such modification or amendment shall be effective
until the holders of at least the same proportion in aggregate
stated liquidation amount of the Trust Securities shall have
consented to such modification or amendment.
(c) Waiver of Past Defaults.
Section 513 of the Base Indenture shall be
supplemented by this Section 2.11(c).
The Holders of a majority in aggregate principal
amount of the Debentures then Outstanding may waive any past
default with respect to the Debentures, except for (i) a default
in the payment of principal of or interest on the Debentures and
(ii) a default in respect of a covenant or provision of the
Indenture which cannot be modified or amended without the
consent of the Holder of each Debenture then Outstanding,
provided, however, that no such waiver shall be effective until
the holders of a majority in aggregate stated liquidation amount
of Trust Securities shall have consented to such waiver; and
provided, further, that where a consent would require the
Holders of more than a majority in principal amount of
Debentures, no such waiver shall be effective until the holders
of at least the same proportion in aggregate stated liquidation
amount of Trust Securities shall have consented to such waiver.
(d) Meetings and Voting.
Sections 1602 and 1604 of the Base Indenture shall be
superseded by this Section 2.11(d).
(i) The Trustee may at any time call a meeting
of Holders for any purpose specified in Section 1601 of the
Base Indenture, to be held at such time and at such place
in The City of New York. Notice of every meeting of
Holders, setting forth the time and the place of such
meeting and in general terms the action proposed to be
taken at such meeting, shall be given not less than 21 nor
more than 180 days prior to the date fixed for the meeting.
In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 20% in principal amount
of the Outstanding Debentures shall have requested the Trustee
to call a meeting of the Holders for any purpose specified in
Section 1601 of the Base Indenture, by written request setting
forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first
publication of the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, then the Company or
the Holders in the amount specified, as the case may be, may
determine the time and the place in The City of New York for
such meeting and may call such meeting for such purposes by
giving notice thereof.
(ii) Except as provided below, the Persons
entitled to vote a majority in principal amount of the
Outstanding Debentures shall constitute a quorum. In the
absence of a quorum within 30 minutes of the time appointed
for any such meeting, the meeting shall, if convened at the
request of Holders, be dissolved. In any other case, the
meeting may be adjourned for a period of not less than
10 days as determined by the chairman of the meeting prior
to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned
meeting may be further adjourned for a period of not less
than 10 days as determined by the chairman of the meeting
prior to the adjournment of such adjourned meeting. Notice
of the reconvening of any adjourned meeting shall be given
as provided herein, except that such notice need be given
only once and not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state
expressly the percentage of the principal amount of the
Outstanding Debentures which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any
meeting adjourned for a lack of a quorum, the Persons entitled
to vote 25% in principal amount of the Outstanding Debentures at
the time shall constitute a quorum for the taking of any action
set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened
and at which a quorum is present as aforesaid, any resolution
and all matters shall be effectively passed and decided if
passed or decided by the Persons entitled to vote the lesser of:
(i) a majority in principal amount of the
Debentures then Outstanding; or
(ii) 66 2/3% in principal amount of the
Debentures represented and voting at such meeting;
provided, however, that if any consent, waiver or other action
must be given, made or taken by the Holders of a specified
percentage in principal amount of Outstanding Debentures (which
is less than a majority of the principal amount of Debentures
then Outstanding) then such consent, waiver or other action may
be given, made or taken by the Persons entitled to vote the
lesser of:
(i) the specified percentage in principal amount
of the Debentures then Outstanding; or
(ii) a majority in principal amount of the
Debentures represented and voting at such meeting.
Any resolution passed or decisions taken at any
meeting of Holders of Debentures duly held in accordance with
this Section shall be binding on all the Holders of Debentures,
whether or not present or represented at the meeting.
Section 2.12 Defeasance.
Section 1701 of the Base Indenture shall be superseded
by this Section 2.12.
The Company shall be deemed to have been discharged
from their obligations with respect to all of the outstanding
Debentures on the date of the deposit referred to in
subparagraph (1) hereof, and the provisions of this Indenture,
as it relates to such outstanding Debentures, shall no longer be
in effect (and the Trustee, at the expense of the Company,
shall, upon the request of the Company, execute proper
instruments acknowledging the same), except as to:
(i) the rights of Holders to receive, solely
from the trust funds described in subparagraph (a) hereof,
payments of the principal of or interest on the Outstanding
Debentures on the date such payments are due; and
(ii) the rights, powers, trust and immunities of
the Trustee hereunder and the duties of the Trustee under
Section 402 of the Base Indenture and the duty of the
Trustee to authenticate Debentures issued on registration
of transfer of exchange;
provided that the following conditions shall have been
satisfied:
(1) the Company shall have deposited, or
caused to be deposited, irrevocably with the Trustee,
under the terms of an escrow trust agreement
satisfactory to the Trustee, as trust funds in trust
for the purpose of making the following payments,
specifically pledged as security for and dedicated
solely to the benefit of the Holders, cash in U.S.
dollars and/or Eligible Instruments (including U.S.
Government Obligations) which through the payment of
interest and principal in respect thereof, in
accordance with their terms, will provide (and without
reinvestment and assuming no tax liability will be
imposed on such Trustee), not later than one day
before the due date of any payment of money, an amount
in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants
expressed in a written certification thereof delivered
to the Trustee, to pay principal of and interest on
all the Debentures on the dates such payments of
principal or interest are due and payable;
(2) no Event of Default with respect to the
Debentures shall have occurred and be continuing on
the date of such deposit;
(3) such deposit and the related intended
consequences will not result in a breach or violation
of, or constitute a default or event of default under,
the Indenture or any other material indenture,
agreement or other instrument binding upon the Company
or its subsidiaries or any of their properties or
assets;
(4) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel to the effect that (A) the Company has
received from, or there has been published by, the
Internal Revenue Service a ruling (which ruling shall
be satisfactory to the Trustee), or (B) since the date
of execution of this Second Supplemental Indenture,
there has been a change in the applicable federal
income tax law, in either case to the effect that, and
based thereon such Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or
loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount and
in the same manner and at the same times as would have
been the case if such deposit, defeasance and
discharge had not occurred;
(5) the Company shall have delivered to the
Trustee an Officers' Certificate stating that the
deposit was not made by the Company with the intent of
preferring the Holders over any other creditors of the
Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the
Company;
(6) such deposit shall not result in the
trust arising from such deposit constituting an
"investment company" (as defined in the Investment
Company Act of 1940, as amended (the "Investment
Company Act")), or such trust shall be qualified under
such Act or exempt from regulation thereunder; and
(7) the Company shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent
relating to the defeasance contemplated by this
Section 2.12 have been complied with.
Section 2.13 Paying Agent; Security Registrar.
Initially, the Trustee shall act as Paying Agent and
Security Registrar. If the Debentures are issued in definitive
form, the Corporate Trust Office shall be the office or agency
of the Paying Agent and the Security Registrar for the
Debentures.
ARTICLE III
FORM OF DEBENTURE
Section 3.1 Form of Debenture.
The Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in
the forms of Exhibit A annexed hereto.
ARTICLE IV
EXPENSES
Section 4.1 Payment of Expenses.
In connection with the offering, sale and issuance of
the Debentures to the Trust in connection with the sale of the
Trust Securities by the Trust, the Company, as borrower, shall:
(a) pay for all costs and expenses relating to the
offering, sale and issuance of the Debentures, including
compensation to the Underwriters payable pursuant to the
Underwriting Agreement and compensation of the Trustee under the
Indenture in accordance with the provisions of Section 607 of
the Indenture;
(b) pay for all costs and expenses of the Trust,
including, but not limited to, costs and expenses relating to
the organization of the Trust, the offering, sale and issuance
of the Trust Securities (including compensation to the
Underwriters payable pursuant to the Underwriting Agreement in
connection therewith); the fees and expenses of the Property
Trustee (including, without limitation, those incurred in
connection with the enforcement by the Property Trustee of the
rights of the holders of the Preferred Securities), the Delaware
Trustee and the Administrative Trustees; the costs and expenses
relating to the operation of the Trust (including, without
limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses); and costs
and expenses incurred in connection with the acquisition,
financing and disposition of Trust assets;
(c) be primarily liable for any indemnification
obligations arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes), duties, assessments or governmental charges
of whatever nature imposed on the Trust by the United States or
any other taxing authority and all liabilities, costs and
expenses with respect to such taxes of the Trust.
ARTICLE V.
COVENANTS
Section 5.1 Covenants upon an Event of Default or of a Deferral
of Interest.
If an Event of Default occurs and written notice of
such event has been given to the Company, or if the Company
exercises its right to defer payments of interest on the
Debentures pursuant to Section 2.5, the Company may not:
(a) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of its capital stock; or
(b) make any payment of principal or interest on or
repay, repurchase or redeem any debt securities of the Company
that rank on a parity with or junior in interest to the
Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any
subsidiary of the Company if such guarantee ranks on a parity
with or junior in interest to the Debentures;
in each case, other than:
(i) dividends or distributions in capital stock
(or rights to acquire capital stock) of the Company;
(ii) payments under the Capital Securities
Guarantee;
(iii) any declarations of a dividend in
connection with the implementation of a shareholders'
rights plan, or the issuances of stock under any such plan
in the future, or redemptions or repurchases of any rights
pursuant to a rights agreement;
(iv) purchases or acquisitions of capital stock
of the Company in connection with the satisfaction by the
Company of its obligations under any employee benefit
plans; and
(v) repurchases of capital stock of the Company
in connection with the satisfaction by the Company of its
obligations pursuant to any acquisitions of businesses made
by the Company (which repurchases are made in connection
with the satisfaction of indemnification obligations of the
sellers of such businesses).
Section 5.2 Additional Covenants Relating to the Trust.
For as long as the Preferred Securities remain
outstanding, the Company will:
(a) maintain, directly or indirectly, 100% ownership
of the Common Securities; provided, however, that any permitted
successor of the Company may succeed to the Company's ownership
of such Common Securities;
(b) cause the Trust to (i) remain a statutory
business trust, except in connection with the distribution of
the Debentures to the Holders, the redemption of all of the
Securities, or certain mergers, consolidations, conversions or
amalgamations, each as permitted by the Declaration, (ii) not
voluntarily dissolve, wind up, liquidate or be terminated,
except as permitted by this Declaration and (iii) otherwise
continue to be classified as a grantor trust for United States
federal income tax purposes;
(c) use its commercially reasonable efforts to ensure
that the Trust will not be an "investment company" required to
be registered under the Investment Company Act; and
(d) not take any action that would be reasonably
likely to cause the Trust to be classified as an association or
a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
Section 5.3 Covenant to List on Exchange.
If the Debentures are distributed to the holders of
the Preferred Securities upon dissolution of the Trust, the
Company shall use its best efforts to list such Debentures on
the New York Stock Exchange or on such other exchange as the
Preferred Securities are then listed, if listed.
Section 5.4 Additional Covenant Relating to the Capital
Guarantee.
If an event of default under the Capital Guarantee
occurs and written notice of such event has been given to the
Company, the Company shall be subject to the limitations and
restrictions set forth in Section 5.1 relating to an Event of
Default.
ARTICLE VI.
SUBORDINATION
Article 18 of the Base Indenture shall be superseded
by this Article VI.
Section 6.1 Debentures Subordinated to Senior Indebtedness.
The Company covenants and agrees, and each Holder, by
such Holder's acceptance thereof, likewise covenants and agrees,
that the indebtedness represented by the Debentures and the
payment of the principal of and interest on each and all of the
Debentures is hereby expressly subordinated and junior, to the
extent and in the manner set forth and as set forth in this
Section 6.1, in right of payment to the prior payment in full of
all Senior Indebtedness.
(a) In the event of any distribution of assets of the
Company upon any dissolution, winding up, liquidation or
reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon
an assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of the Company or
otherwise, the holders of all Senior Indebtedness shall be
entitled first to receive payment of the full amount due thereon
in respect of all such Senior Indebtedness and all other amounts
due or provision shall be made for such amount in cash, or other
payments satisfactory to the holders of Senior Indebtedness,
before the Holders are entitled to receive any payment or
distribution of any character, whether in cash, securities or
other property, on account of the principal of or interest on
the indebtedness evidenced by the Debentures.
(b) In the event of any acceleration of maturity of
the Debentures because of an Event of Default, unless the full
amount due in respect of all Senior Indebtedness is paid in cash
or other form of payment satisfactory to the holders of Senior
Indebtedness, no payment shall be made by the Company with
respect to the principal of or interest on the Debentures or to
acquire any of the Debentures, and the Company shall give prompt
written notice of such acceleration to such holders of Senior
Indebtedness.
(c) In the event of and during the continuance of any
default in payment of the principal of or interest on any Senior
Indebtedness, unless all such payments due in respect of such
Senior Indebtedness have been paid in full in cash or other
payments satisfactory to the holders of Senior Indebtedness, no
payment shall be made by the Company with respect to the
principal of or interest on the Debentures or to acquire any of
the Debentures. The Company shall give prompt written notice to
the Trustee of any default under any Senior Indebtedness or
under any agreement pursuant to which Senior Indebtedness may
have been issued.
(d) During the continuance of any event of default
with respect to any Senior Indebtedness, as such event of
default is defined under any such Senior Indebtedness or in any
agreement pursuant to which any Senior Indebtedness has been
issued (other than a default in payment of the principal of or
interest on any Senior Indebtedness), permitting the holder or
holders of such Senior Indebtedness to accelerate the maturity
thereof, no payment shall be made by the Company, directly or
indirectly, with respect to principal of or interest on the
Debentures for 179 days following notice in writing (a "Payment
Blockage Notice") to the Company, from any holder or holders of
such Senior Indebtedness or their representative or
representatives or the trustee or trustees under any indenture
or under which any instrument evidencing any such Senior
Indebtedness may have been issued, that such an event of default
has occurred and is continuing, unless such event of default has
been cured or waived or such Senior Indebtedness has been paid
in full; provided, however, if the maturity of such Senior
Indebtedness is accelerated, no payment may be made on the
Debentures until such Senior Indebtedness has been paid in full
in cash or other payment satisfactory to the holders of such
Senior Indebtedness or such acceleration (or termination, in the
case of a lease) has been cured or waived.
For purposes of this Section 6.1(d), such Payment
Blockage Notice shall be deemed to include notice of all other
events of default under such indenture or instrument which are
continuing at the time of the event of default specified in such
Payment Blockage Notice. The provisions of this Section 6.1(d)
shall apply only to one such Payment Blockage Notice given in
any period of 365 days with respect to any issue of Senior
Indebtedness, and no such continuing event of default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice shall be, or shall be made, the basis for a
subsequent Payment Blockage Notice.
(e) In the event that, notwithstanding the foregoing
provisions of Sections 6.1(a), 6.1(b), 6.1(c) and 6.1(d), any
payment on account of principal of or interest on the Debentures
shall be made by or on behalf of the Company and received by the
Trustee, by any Holder or by any Paying Agent (or, if the
Company is acting as its own Paying Agent, money for any such
payment shall be segregated and held in trust):
(i) after the occurrence of an event specified
in Section 6.1(a) or 6.1(b), then, unless all Senior
Indebtedness is paid in full in cash, or provision shall be
made therefor,
(ii) after the happening of an event of default
of the type specified in Section 6.1(c) above, then, unless
the amount of such Senior Indebtedness then due shall have
been paid in full, or provision made therefor or such event
of default shall have been cured or waived, or
(iii) after the happening of an event of default
of the type specified in Section 6.1(d) above and delivery
of a Payment Blockage Notice, then, unless such event of
default shall have been cured or waived or the 179-day
period specified in Section 6.1(d) shall have expired,
such payment (subject, in each case, to the provisions of
Section 6.7 hereof) shall be held in trust for the benefit of,
and shall be immediately paid over to, the holders of Senior
Indebtedness or their representative or representatives or the
trustee or trustees under any indenture under which any
instruments evidencing any of the Senior Indebtedness may have
been issued, as their interests may appear.
Section 6.2 Subrogation.
Subject to the payment in full of all Senior
Indebtedness to which the indebtedness evidenced by the
Debentures is in the circumstances subordinated as provided in
Section 6.1 hereof, the Holders 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 all amounts
owing on the Debentures shall be paid in full, and, as between
the Company, its creditors other than holders of such Senior
Indebtedness, and the Holders, no such payment or distribution
made to the holders of Senior Indebtedness by virtue of this
Article which otherwise would have been made to the holders of
the Debentures shall be deemed to be a payment by the Company on
account of such Senior Indebtedness, provided that the
provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders, on the
one hand, and the holders of Senior Indebtedness, on the other
hand.
Section 6.3 Obligation of the Company is Absolute and
Unconditional.
Nothing contained in this Article 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, the obligation of the
Company, which is absolute and unconditional, to pay to the
Holders the principal of 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 and creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything contained
herein or therein prevent the Trustee or the Holders from
exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if
any, under this Article of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Section 6.4 Maturity of or Default on Senior Indebtedness.
Upon the maturity of any Senior Indebtedness by lapse
of time, acceleration or otherwise, all principal of or premium,
if any, or interest on, rent or other payment obligations in
respect of all such matured Senior Indebtedness shall first be
paid in full, or such payment shall have been duly provided for,
before any payment on account of principal or interest is made
upon the Debentures.
Section 6.5 Payments on Debentures Permitted.
Except as expressly provided in this Article, nothing
contained in this Article shall affect the obligation of the
Company to make, or prevent the Company from making, payments of
the principal of or interest on the Debentures in accordance
with the provisions hereof and thereof, or shall prevent the
Trustee or any Paying Agent from applying any moneys deposited
with it hereunder to the payment of the principal of or interest
on the Debentures.
Section 6.6 Effectuation of Subordination by Trustee.
Each Holder, by such Holder's acceptance thereof,
authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
Upon any payment or distribution of assets of the
Company referred to in this Article, the Trustee and the Holders
shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which any such dissolution,
winding up, liquidation or reorganization proceeding affecting
the affairs of the Company is pending or upon a certificate of
the trustee in bankruptcy, receiver, assignee for the benefit of
creditors, liquidating trustee or agent or other Person making
any payment or distribution, delivered to the Trustee or to the
Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, and as to other
facts pertinent to the right of such Persons under this Article,
and if such evidence is not furnished, the Trustee may defer any
payment to such Persons pending judicial determination as to the
right of such Persons to receive such payment.
Section 6.7 Knowledge of Trustee.
Notwithstanding the provision of this Article or any
other provisions of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any Senior
Indebtedness, of any default in payment of principal of or
interest on, rent or other payment obligation in respect of any
Senior Indebtedness, or of any facts which would prohibit the
making of any payment of moneys to or by the Trustee, or the
taking of any other action by the Trustee, unless a Responsible
Officer of the Trustee having responsibility for the
administration of the trust established by this Indenture shall
have received written notice thereof from the Company, any
Holder, any Paying Agent of the Company or the holder or
representative of any class of Senior Indebtedness, and, prior
to the receipt of any such written notice, the Trustee shall be
entitled in all respects to assume that no such default or facts
exist; provided, however, that unless on the third Business Day
prior to the date upon which by the terms hereof any such moneys
may become payable for any purpose the Trustee shall have
received the notice provided for in this Section 6.7, then,
anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such
moneys and apply the same to the purpose for which they were
received, and shall not be affected by any notice to the
contrary which may be received by it on or after such date.
Section 6.8 Trustee's Relation to Senior Indebtedness.
The Trustee shall be entitled to all the rights set
forth in this Article with respect to any Senior Indebtedness at
the time held by it, to the same extent as any other holder of
Senior Indebtedness and nothing contained in this Indenture
shall deprive the Trustee of any of its rights as such holder.
Nothing contained in this Article shall apply to
claims of or payments to the Trustee under or pursuant to
Section 607 of the Base Indenture.
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, and no implied covenants or obligations with respect to
the holders of 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 Senior Indebtedness
and the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall pay over or deliver to Holders, the
Company or any other Person moneys or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
Section 6.9 Rights of Holders of Senior Indebtedness Not
Impaired.
No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any
time or in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Section 6.10 Modification of Terms of Senior Indebtedness.
Any renewal or extension of the time of payment of any
Senior Indebtedness or the exercise by the holders of Senior
Indebtedness of any of their rights under any instrument
creating or evidencing Senior Indebtedness, including without
limitation the waiver of default thereunder, may be made or done
all without notice to or assent from the Holders or the Trustee.
No compromise, alteration, amendment, modification,
extension, renewal or other change of, or waiver, consent or
other action in respect of, any liability or obligation under or
in respect of, or of any of the terms, covenants or conditions
of any indenture or other instrument under which any Senior
Indebtedness is outstanding or of such Senior Indebtedness,
whether or not such release is in accordance with the provisions
or any applicable document, shall in any way alter or affect any
of the provisions of this Article or of the Debentures relating
to the subordination thereof.
ARTICLE VII.
RIGHTS OF HOLDERS OF PREFERRED SECURITIES
Section 7.1 Preferred Security Holders' Rights.
Notwithstanding Section 507 of the Base Indenture, if
the Property Trustee fails to enforce its rights under the
Debentures after a holder of Preferred Securities has made a
written request, the holder of Preferred Securities may, to the
fullest extent permitted by law, institute a legal proceeding
directly against the Company to enforce the Property Trustee's
rights under the Indenture without first instituting any legal
proceeding against the Property Trustee or any other person or
entity.
Section 7.2 Direct Action.
Notwithstanding any other provision of the Indenture,
for as long as any Preferred Securities remain outstanding, to
the fullest extent permitted by law, if an Event of Default has
occurred and is continuing and such event is attributable to the
failure of the Company to pay principal of and interest on the
Debentures on the date such principal or interest is otherwise
payable, a holder of Preferred Securities may institute a
proceeding directly against the Company (a "Direct Action") to
enforce payment to such holder of the principal of or interest
on Debentures having an aggregate principal amount equal to the
aggregate stated liquidation amount of the Preferred Securities
of such holder.
Section 7.3 Payments Pursuant to Direct Actions.
The Company shall have the right to set off against
its obligations to the Trust, as Holder, any payment made to a
holder of Preferred Securities in connection with a Direct
Action.
ARTICLE VIII.
REMARKETING
Section 8.1 Effectiveness of this Article.
[Intentionally Omitted]
Section 8.2 Remarketing.
[Intentionally Omitted]
ARTICLE IX.
MISCELLANEOUS
Section 9.1 Ratification of Indenture.
The Indenture, as supplemented by this Second
Supplemental Indenture, is in all respects ratified and
confirmed, and this Second Supplemental Indenture shall be
deemed part of the Indenture in the manner and to the extent
herein and therein provided.
Section 9.2 Trustee Not Responsible for Recitals.
The recitals contained herein are made by the Company
and not by the Trustee, and the Trustee assumes no
responsibility for the correctness thereof. The Trustee makes
no representation as to the validity or sufficiency of this
Second Supplemental Indenture.
Section 9.3 Governing Law.
This Second Supplemental Indenture and each Debenture
shall be governed by, and construed in accordance with, the laws
of Commonwealth of Pennsylvania.
Section 9.4 Severability.
In case any one or more of the provisions contained in
this Second Supplemental 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 Second
Supplemental Indenture or of the Debentures, but this Second
Supplemental Indenture and the Debentures shall be construed as
if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
Section 9.5 Counterparts.
This Second Supplemental 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.
IN WITNESS WHEREOF, the parties hereto have caused
this Second Supplemental Indenture to be duly executed, and
their respective corporate seals to be hereunto affixed and
attested, on the date or dates indicated in the acknowledgments
and as of the day and year first above written.
[SIGNATURES ON FOLLOWING PAGE]
[SIGNATURES FROM PRECEDING PAGE]
/s/ SOVEREIGN BANCORP, INC.
/s/ BNY MIDWEST TRUST COMPANY (as
successor to HARRIS TRUST AND
SAVINGS BANK), as Trustee
EXHIBIT "A"
[FORM OF DEBENTURE]
[FACE OF DEBENTURE]
This Debenture is a Global Debenture within the
meaning of the Indenture hereinafter referred to and is
registered in the name of The Depository Trust Company, a New
York corporation (the "Depositary"), or a nominee of the
Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or
its nominee only in the limited circumstances described in the
Indenture (as defined below), and no transfer of this Debenture
(other than a transfer of this Debenture as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative of the Depositary to Sovereign Bancorp, Inc. or
its agent for registration of transfer, exchange or payment, and
any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of
the Depositary, and any payment hereon is made to Cede & Co., or
to such other entity as is requested by an authorized
representative of the Depositary, and, except as otherwise
provided in the Indenture, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest
herein.
SOVEREIGN BANCORP, INC.
8.75% Junior Subordinated Deferrable Interest Debenture due
December 31, 2031
Certificate No.: 1 $_________________
CUSIP No.:____________
This Debenture is one of a duly authorized series of
Debt Securities of Sovereign Bancorp, Inc. (the "Debentures"),
all issued under and pursuant to an Indenture dated as of
September 1, 1999, duly executed and delivered by Sovereign
Bancorp, Inc., a Pennsylvania corporation (the "Company", which
term includes any successor corporation under the Indenture
hereinafter referred to) and BNY Midwest Trust Company (as
successor to Harris Trust and Savings Bank), an Illinois
corporation, as Trustee (the "Trustee"), as supplemented by the
Second Supplemental Indenture thereto dated as of December 13,
2001, between the Company and the Trustee (such Indenture as so
supplemented, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the Holders of the Debentures. By the terms of the Indenture,
the Debt Securities are issuable in series that may vary as to
amount, date of maturity, rate of interest and in other respects
as provided in the Indenture. This series of Debt Securities is
limited in aggregate principal amount to $103,092,800.
The Company, for value received, hereby promises to
pay to Cede & Co., or its registered assigns, the principal sum
of __________________________ U.S. Dollars ($______________) on
December 31, 2031.
Interest Payment Dates: March 31, June 30,
September 30 and December 31, commencing on March 31, 2002.
Reference is hereby made to the further provisions of
this Debenture set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this
Debenture to be duly executed manually or by facsimile by its
duly authorized officers under its corporate seal.
[SIGNATURES ON FOLLOWING PAGE]
[SIGNATURES FROM PRECEDING PAGE]
SOVEREIGN BANCORP, INC.
By:_______________________________
Name:
Title:
By:_______________________________
Name:
Title:
Trustee's Certificate of
Authentication
This is one of the 8.75%
Subordinated Junior
Deferrable Interest
Debentures due December 31,
2031 referred to in the
within-mentioned Indenture.
BNY Midwest Trust Company
(as successor to HARRIS
TRUST AND SAVINGS BANK),
as Trustee
By:________________________
Authorized Officer
Dated: December ____, 2001
[REVERSE OF DEBENTURE]
SOVEREIGN BANCORP, INC.
8.75% Subordinated Junior Deferrable Interest Debentures
due December 31, 2001
Capitalized terms used herein but not defined shall
have the meanings assigned to them in the Indenture referred to
below unless otherwise indicated.
1. Principal and Interest.
Sovereign Bancorp, Inc., a Pennsylvania corporation
(the "Company"), promises to pay interest on the principal
amount of this Debenture at the Coupon Rate from and including
December 13, 2001, to, but excluding, December 31, 2031 (the
"Maturity Date"). The Company will pay interest on this
Debenture quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year (each an "Interest
Payment Date"), commencing on March 31, 2002. Interest not paid
on the scheduled Interest Payment Date will accrue and compound
quarterly at the Coupon Rate.
Interest on the Debentures shall be computed (i) for
any full quarterly 90-day period on the basis of a 360-day year
of twelve 30-day months, (ii) for any period shorter than a full
quarterly 90-day period, on the basis of a 30-day month and
(iii) for any period less than a 30-day month, on the basis of
the actual number of days elapsed in the 30-day month.
2. Optional Deferral of Interest.
As long as no Event of Default has occurred and is
continuing, the Company has the right, at any time and from time
to time to defer payments of interest on the Debentures by
extending the interest payment period on the Debentures for a
period (each, an "Extension Period") not exceeding 20
consecutive quarterly periods, during which Extension Period no
interest shall be due and payable on the Debentures, provided
that no Extension Period shall end on a date other than an
Interest Payment Date for the Debentures or extend beyond the
Maturity Date. Despite such deferral, interest shall continue
to accrue with additional interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period ("Compounded
Interest"). Prior to the termination of any such Extension
Period, the Company may further defer payments of interest by
further extending such Extension Period; provided that such
Extension Period, together with all such previous and further
extensions of such Extension Period, may not exceed 20
consecutive quarterly periods or extend beyond the Maturity
Date. At the termination of any Extension Period, the Company
shall pay all interest then accrued and unpaid, plus Compounded
Interest. Upon the termination of any Extension Period and the
payment of all amounts then due, the Company may commence a new
Extension Period, subject to the above requirements.
During an Extension Period, the Company may not, and
will not permit any subsidiary to:
(a) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with
respect to, any of its capital stock; or
(b) make any payment of principal or premium (if any)
of, or interest on, or repay, repurchase or redeem any debt
securities of the Company that rank on a parity with or junior
in interest to the Debentures or make any guarantee payments
with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee
ranks on a parity with or junior in interest to the Debentures;
in each case, other than:
(i) dividends or distributions in capital stock
(or rights to acquire capital stock) of the Company;
(ii) payments under the Guarantee;
(iii) any declaration of a dividend in
connection with the implementation of a shareholders'
rights plan, or the issuance of stock under any such plan
in the future, or any redemption or repurchase of any
rights pursuant to a rights agreement;
(iv) purchases or acquisitions of capital stock
of the Company in connection with the satisfaction by the
Company of its obligations under any employee benefit
plans; and
(v) repurchases of capital stock of the Company
in connection with the satisfaction by the Company of its
obligations pursuant to any acquisitions of businesses made
by the Company (which repurchases are made in connection
with the satisfaction of indemnification obligations of the
sellers of such businesses).
3. Method of Payment.
Interest on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the person in whose name that Security (or
one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest. As
long as the Debentures are represented by a Global Debenture,
the Regular Record Dates for the Debentures shall be the
Business Day preceding the corresponding Interest Payment Date.
If the Debentures are issued in definitive form, the Regular
Record Dates for the Debentures shall be the fifteenth day of
the month in which the corresponding Interest Payment Date
occurs.
4. Paying Agent and Security Registrar.
Initially, BNY Midwest Trust Company, the Trustee,
will act as Paying Agent and Security Registrar. The Company
may change the Paying Agent and Security Registrar without
notice to any Holder.
5. Indenture.
The Company issued this Debenture under an Indenture,
dated as of September 1, 1999 (the "Base Indenture"), between
the Company and BNY Midwest Trust Company (as successor to
Harris Trust and Savings Bank), as trustee (the "Trustee"), as
amended and supplemented by the Second Supplemental Indenture,
dated as of December 13, 2001 (the "Second Supplemental
Indenture", together with the Base Indenture, the "Indenture"),
between the Company and the Trustee. The provisions of this
Debenture are subject to the more detailed provisions of the
Indenture.
6. Redemption.
The Company may redeem the Debentures, in whole or in
part at any time and from time to time on or after January 1,
2007. The Company may also redeem the Debentures in whole, but
not in part, upon the occurrence and during the continuance of a
Special Event. In each case, the Company must give not less
than 30 day's and not more than 60 day's notice thereof to the
holders of the Debentures. The redemption price will be equal
to 100% of the principal amount to be redeemed, plus accrued
interest thereon to the date of redemption.
7. Sinking Fund.
The Debentures will not be subject to a sinking fund
provision.
8. Distribution of Debentures in Exchange
for Trust Securities.
At any time, provided certain conditions are
satisfied, the Administrative Trustees may dissolve the Trust
and, after satisfaction of liabilities to creditors of the Trust
as provided by applicable law, cause the Debentures held by the
Property Trustee to be distributed to the holders of Trust
Securities in liquidation of such holders' interests in the
Trust on a Pro Rata basis, upon not less than 30 nor more than
60 days notice, and, simultaneous with such distribution, to
cause a Like Amount of the Trust Securities to be exchanged by
the Trust on a Pro Rata basis.
A Debenture Distribution Notice, which notice shall be
irrevocable, shall be given by the Trust by mail to each holder
of Trust Securities as provided in the Indenture.
9. Subordination.
The payment of principal of and interest on this
Debenture is, to the extent and in the manner provided in the
Indenture, subordinated and subject in right of payment to the
prior payment in full of all amounts then due on all Senior
Indebtedness of the Company, and this Debenture is issued
subject to such subordination 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 such Holder's behalf
to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the
Trustee such Holder's attorney-in-fact for any and all such
purposes.
10. Defaults and Remedies.
The Indenture provides that an Event of Default with
respect to the Debentures occurs when any of the following
occurs:
(a) the Company defaults in the payment of the
principal of any of the Debentures when it becomes due and
payable at the Maturity Date or otherwise, whether or not such
payment is prohibited by the subordination provisions of Article
6 of the Second Supplemental Indenture;
(b) the Company defaults in the payment of interest
on any of the Debentures when it becomes due and payable and
such default continues for a period of 30 days after written
notice has been given as provided in the Indenture, whether or
not such payment is prohibited by the subordination provisions
of Article 6 of the Second Supplemental Indenture; provided,
however, that a valid extension of the interest payment period
does not constitute a default in the payment of interest;
(c) the Company fails to perform or observe any other
term, covenant or agreement contained in the Debentures or the
Indenture (other than a covenant included in the Indenture
solely for the benefit of any series of Debt Securities other
than the Debentures) and such default continues for a period of
90 days after written notice of such failure is given as
specified in the Indenture;
(d) there are certain events of bankruptcy,
insolvency or reorganization of the Company; or
(e) the voluntarily or involuntarily dissolution,
winding-up or termination of the Trust, except in connection
with:
(i) the distribution of the Debentures held by
the Trust to the holders of the 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,
conversions, amalgamations, replacements or other
transactions involving the Trust, each as permitted under
the Declaration.
If an Event of Default shall occur and be continuing,
the principal of all of the Debentures may be declared due and
payable, in the manner and with the effect provided in the
Indenture.
11. Amendment; Supplement; Waiver.
The Indenture contains provisions permitting the
Company and the Trustee, without the consent of any Holder, to
execute supplemental indentures modifying certain provisions of
the Indenture, provided that no such modification has a material
adverse effect on the interests of the Holders.
In addition, the Indenture contains provisions
permitting the Company and the Trustee, with the consent of the
Holders of not less than a majority in aggregate principal
amount of the Debentures and all other series of Debt Securities
affected at the time Outstanding, to execute supplemental
indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
the 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 may,
without the consent of the Holder of each outstanding Debenture,
among other things:
(i) change the Maturity Date of the principal
of, or the time of payment of any installment of interest
on, any Debenture;
(ii) reduce the principal amount of, or the rate
of interest on any Debenture;
(iii) change the place of payment where the
Debentures or any interest thereon is payable;
(iv) impair the right to institute suit for the
enforcement of any such payment on or with respect to the
Debentures;
(v) reduce the above-stated percentage of
principal amount of Debentures, the Holders of which are
required to modify or amend the Indenture, to consent to
any waiver thereunder or to approve any supplemental
indenture;
(vi) change any obligation of the Company to
maintain an office or agency in the place and for the
purposes required by the Indenture; or
(vii) modify any of the above provisions;
and provided, further, that no such supplemental indenture shall
be effective until the holders of not less than 66 2/3% of the
aggregate stated liquidation amount of the Trust Securities
shall have consented to such supplemental indenture; and
provided, further, that where the consent of the Holders of not
less than 66 2/3% of the aggregate principal amount of the
Debentures is required under the Indenture, no such supplemental
indenture shall be effective until the holders of at least the
same proportion in aggregate stated liquidation amount of the
Trust Securities shall have consented to such supplemental
indenture.
The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding affected thereby, on behalf
of all of the Holders of the Debentures, to waive any past
default in the performance of any of the covenants contained in
the Indenture, or established pursuant to the Indenture with
respect to the Debentures, and its consequences, except a
default in the payment of the principal of or interest on any of
the Debentures (unless cured as provided in the Indenture) or in
respect of a covenant or provision that cannot be modified or
amended without the consent of the Holders of each Debenture
then Outstanding. Any such consent or waiver by the registered
Holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Debenture and of any
Debenture issued in exchange herefor or in place hereof (whether
by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made
upon this Debenture.
12. Restrictive Covenants.
The Indenture requires the Company, for as long as the
Preferred Securities remain outstanding, to:
(a) maintain, directly or indirectly, 100% ownership
of the Common Securities; provided, however, that any permitted
successor of the Company may succeed to the Company's ownership
of such Common Securities;
(b) cause the Trust to (a) remain a statutory
business trust, except in connection with the distribution of
the Debentures to the Holders, the redemption of all of the
Securities, or certain mergers, consolidations, conversions or
amalgamations, each as permitted by the Declaration, (b) not
voluntarily dissolve, wind up, liquidate or be terminated,
except as permitted by this Declaration and (c) otherwise
continue to be classified as a grantor trust for United States
federal income tax purposes;
(c) use its commercially reasonable efforts to ensure
that the Trust will not be an "investment company" required to
be registered under the Investment Company Act of 1940, as
amended; and
(d) not take any action that would be reasonably
likely to cause the Trust to be classified as an association or
a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.
The Indenture also imposes certain limitations on the
ability of the Company to, among other things, merge,
consolidate or sell, assign, transfer or lease all or
substantially all of its properties or assets. Such covenants
and limitations are subject to a number of important
qualifications and exceptions. The Company must report
periodically to the Trustee on compliance with the covenants in
the Indenture.
13. Denomination; Transfer; Exchange.
The Debentures of this series are issuable only in
registered form without coupons in denominations of $25 and any
integral multiple thereof. As provided in the Indenture and
subject to certain limitations herein and therein set forth,
Debentures of this series so issued are exchangeable for a like
aggregate principal amount of Debentures of this series of a
different authorized denomination, as requested by the Holder
surrendering the same.
As provided in the Indenture and subject to certain
limitations therein set forth, this Debenture is transferable by
the registered Holder hereof on the Security Register of the
Company, upon surrender of this Debenture for registration of
transfer at the office or agency of the Company in the City and
State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or
the Trustee duly executed by the registered Holder hereof or his
attorney duly authorized in writing, and thereupon one or more
new Debentures of authorized denominations and for the same
aggregate principal amount will be issued to the designated
transferee or transferees. No service charge will be made for
any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in relation thereto.
14. Persons Deemed Owners.
The registered Holder of this Debenture shall be
treated as its owner for all purposes.
15. Defeasance.
Subject to certain conditions contained in the
Indenture, at any time some or all of the Debentures and the
Indenture may be terminated if the Company deposits with the
Trustee money and/or Eligible Instruments (including U.S.
Government Obligations) sufficient to pay the principal of and
interest on the Debentures to the Maturity Date.
16. No Recourse Against Others.
No recourse shall be had for the payment of the
principal of or the interest on this Debenture, or for any claim
based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture, against any incorporator, shareholder,
officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and
released.
17. Authentication.
This Debenture shall not be valid until the Trustee
(or authenticating agent) executes the certificate of
authentication on the other side of this Debenture.
18 Governing Law.
The Indenture and this Debenture shall be governed by,
and construed in accordance with, the laws of the Commonwealth
of Pennsylvania.
SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL DEBENTURE
The following increases or decreases in this Global
Debenture have been made:
<table>
<caption>
Principal Amount of
Amunt of decrease in Amount of increase Debentures
Principal Amount of in Principal Amount evidenced by this
Debentures evidenced of Debentures Global Debenture Signature of
by this Global evidenced by this following such authorized
Date Debenture Global Debenture decrease or increase officer of agent
<s> <c> <c> <c> <c>
</table>