AMENDED AND RESTATED DECLARATION
OF TRUST
by and among
WILMINGTON TRUST COMPANY,
as Delaware Trustee,
WILMINGTON TRUST COMPANY,
as Institutional Trustee,
MFB CORP.,
as Sponsor,
and
CHARLES J. VIATER and TERRY CLARK,
as Administrators,
Dated as of July 29, 2005
ii
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TABLE OF CONTENTS
ARTICLE I INTERPRETATION AND DEFINITIONS..........................................................................1
Section 1.1. Definitions............................................................................1
ARTICLE II ORGANIZATION...........................................................................................8
Section 2.1. Name...................................................................................8
Section 2.2. Office.................................................................................8
Section 2.3. Purpose................................................................................8
Section 2.4. Authority..............................................................................8
Section 2.5. Title to Property of the Trust.........................................................8
Section 2.6. Powers and Duties of the Trustees and the Administrators...............................8
Section 2.7. Prohibition of Actions by the Trust and the Institutional Trustee.....................12
Section 2.8. Powers and Duties of the Institutional Trustee........................................12
Section 2.9. Certain Duties and Responsibilities of the Trustees and Administrators................14
Section 2.10. Certain Rights of Institutional Trustee...............................................15
Section 2.11. Delaware Trustee......................................................................17
Section 2.12. Execution of Documents................................................................17
Section 2.13. Not Responsible for Recitals or Issuance of Securities................................17
Section 2.14. Duration of Trust.....................................................................17
Section 2.15. Mergers...............................................................................17
ARTICLE III SPONSOR..............................................................................................19
Section 3.1. Sponsor's Purchase of Common Securities...............................................19
Section 3.2. Responsibilities of the Sponsor.......................................................19
Section 3.3. Expenses..............................................................................19
Section 3.4. Right to Proceed......................................................................20
ARTICLE IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS..............................................................20
Section 4.1. Number of Trustees....................................................................20
Section 4.2. Delaware Trustee; Eligibility.........................................................20
Section 4.3. Institutional Trustee; Eligibility....................................................20
Section 4.4. Administrators........................................................................21
Section 4.5. Appointment, Removal and Resignation of Trustees and Administrators...................21
Section 4.6. Vacancies Among Trustees..............................................................23
Section 4.7. Effect of Vacancies...................................................................23
Section 4.8. Meetings of the Trustees and the Administrators.......................................23
Section 4.9. Delegation of Power...................................................................23
Section 4.10. Conversion, Consolidation or Succession to Business...................................23
ARTICLE V DISTRIBUTIONS..........................................................................................24
Section 5.1. Distributions.........................................................................24
ARTICLE VI ISSUANCE OF SECURITIES................................................................................24
Section 6.1. General Provisions Regarding Securities...............................................24
Section 6.2. Paying Agent, Transfer Agent and Registrar............................................25
Section 6.3. Form and Dating.......................................................................25
Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates.....................................25
Section 6.5. Temporary Securities..................................................................26
Section 6.6. Cancellation..........................................................................26
Section 6.7. Rights of Holders; Waivers of Past Defaults...........................................26
ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST.................................................................28
Section 7.1. Dissolution and Termination of Trust..................................................28
ARTICLE VIII TRANSFER OF INTERESTS...............................................................................28
Section 8.1. General...............................................................................28
Section 8.2. Transfer Procedures and Restrictions..................................................29
Section 8.3. Deemed Security Holders...............................................................31
ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS.....................31
Section 9.1. Liability.............................................................................31
Section 9.2. Exculpation...........................................................................32
Section 9.3. Fiduciary Duty........................................................................32
Section 9.4. Indemnification.......................................................................33
Section 9.5. Outside Businesses....................................................................35
Section 9.6. Compensation; Fee.....................................................................35
ARTICLE X ACCOUNTING.............................................................................................35
Section 10.1. Fiscal Year...........................................................................35
Section 10.2. Certain Accounting Matters............................................................35
Section 10.3. Banking...............................................................................36
Section 10.4. Withholding...........................................................................36
ARTICLE XI AMENDMENTS AND MEETINGS...............................................................................36
Section 11.1. Amendments............................................................................36
Section 11.2. Meetings of the Holders of Securities; Action by Written Consent......................38
ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE....................................39
Section 12.1. Representations and Warranties of Institutional Trustee...............................39
Section 12.2. Representations of the Delaware Trustee...............................................39
ARTICLE XIII MISCELLANEOUS.......................................................................................40
Section 13.1. Notices...............................................................................40
Section 13.2. Governing Law.........................................................................41
Section 13.3. Intention of the Parties..............................................................41
Section 13.4. Headings..............................................................................41
Section 13.5. Successors and Assigns................................................................42
Section 13.6. Partial Enforceability................................................................42
Section 13.7. Counterparts..........................................................................42
Annex I....................Terms of Securities
Exhibit A-1................Form of Capital Security Certificate
Exhibit A-2................Form of Common Security Certificate
Exhibit B..................Specimen of Initial Debenture
Exhibit C..................Placement Agreement
43
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MFBC STATUTORY TRUST I
July 29, 2005
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of July 29, 2005, by the Trustees (as defined herein), the
Administrators (as defined herein), the Sponsor (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the Trust (as
defined herein) to be issued pursuant to this Declaration;
WHEREAS, the Trustees, the Administrators and the Sponsor established
MFBC Statutory Trust I (the "Trust"), a statutory trust under the Statutory
Trust Act (as defined herein) pursuant to a Declaration of Trust dated as of
July 13, 2005 (the "Original Declaration"), and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on July 13, 2005, for the
sole purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain debentures of the Debenture Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued; and
WHEREAS, the Trustees, the Administrators and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act and that
this Declaration constitutes the governing instrument of such statutory trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration. The parties hereto
hereby agree as follows:
ARTICLE I.........
INTERPRETATION AND DEFINITIONS
Section 1.1.......Definitions.
Unless the context otherwise requires:
(a)...... Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b)a term defined anywhere in this Declaration has the same meaning throughout;
(c)...... all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d).. all references in this Declaration to Articles and Sections and Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified; and
(e)...... a reference to the singular includes the plural and vice versa.
"Acceleration Event of Default" has the meaning set forth in the
Indenture.
"Additional Interest" has the meaning set forth in the Indenture.
"Administrative Action" has the meaning set forth in paragraph 4(a) of
Annex I.
"Administrators" means each of Charles J. Viater and Terry Clark,
solely in such Person's capacity as Administrator of the Trust created and
continued hereunder and not in such Person's individual capacity, or such
Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a)......a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person 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
(b)......such Person shall commence a voluntary case under any
applicable bankruptcy, insolvency 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 such Person 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.
"Business Day" means any day other than Saturday, Sunday or any other
day on which banking institutions in New York City or Wilmington, Delaware are
permitted or required by any applicable law or executive order to close.
"Capital Securities" has the meaning set forth in paragraph 1(a) of
Annex I.
"Capital Security Certificate" means a definitive Certificate in fully
registered form representing a Capital Security substantially in the form of
Exhibit A-1.
"Capital Treatment Event" has the meaning set forth in paragraph 4(a)
of Annex I.
"Certificate" means any certificate evidencing Securities.
"Closing Date" has the meaning set forth in the Placement Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Common Securities" has the meaning set forth in paragraph 1(b) of
Annex I.
"Common Security Certificate" means a definitive Certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Administrator; (b) any
Affiliate of any Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in paragraph 4(a)
of Annex I.
"Comparable Treasury Price" has the meaning set forth in paragraph 4(a)
of Annex I.
"Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-1600, Attn: Corporate Trust
Administration.
"Coupon Rate" has the meaning set forth in paragraph 2(a) of Annex I.
"Covered Person" means: (a) any Administrator, officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) any of the Trust's Affiliates; and (b) any Holder of Securities.
"Creditor" has the meaning set forth in Section 3.3.
"Debenture Issuer" means MFB Corp., an Indiana corporation, in its
capacity as issuer of the Debentures under the Indenture.
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"Debenture Trustee" means Wilmington Trust Company, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Debentures" means the Fixed/Floating Rate Junior Subordinated
Deferrable Interest Debentures due 2035 to be issued by the Debenture Issuer
under the Indenture.
"Defaulted Interest" has the meaning set forth in the Indenture.
"Delaware Trustee" has the meaning set forth in Section 4.2.
"Determination Date" has the meaning set forth in paragraph 4(a) of
Annex I.
"Direct Action" has the meaning set forth in Section 2.8(d).
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 5.1.
"Distribution Payment Date" has the meaning set forth in paragraph 2(b)
of Annex I.
"Distribution Period" means (i) with respect to the Distribution paid
on the first Distribution Payment Date, the period beginning on (and including)
the date of original issuance and ending on (but excluding) the Distribution
Payment Date in September 2005 and (ii) thereafter, with respect to a
Distribution paid on each successive Distribution Payment Date, the period
beginning on (and including) the preceding Distribution Payment Date and ending
on (but excluding) such current Distribution Payment Date.
"Distribution Rate" means, for the Distribution Period beginning on
(and including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in September 2010, the rate per annum of 6.22%, and
for each Distribution Period beginning on or after the Distribution Payment Date
in September 2010, the Coupon Rate for such Distribution Period.
"Event of Default" means any one of the following events (whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a)......the occurrence of an Indenture Event of Default; or
(b)......default by the Trust in the payment of any Redemption Price
or Special Redemption Price of any Security when it
becomes due and payable; or
(c)......default in the performance, or breach, in any material
respect, of any covenant or warranty of the Institutional Trustee in this
Declaration (other than those specified in clause (a) or (b) above) and
continuation of such default or breach for a period of 60 days after there has
been given, by registered or certified mail to the Institutional Trustee and to
the Sponsor by the Holders of at least 25% in aggregate liquidation amount of
the outstanding Capital Securities, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(d)......the occurrence of a Bankruptcy Event with respect to the
Institutional Trustee if a successor Institutional Trustee has not been
appointed within 90 days thereof.
"Extension Period" has the meaning set forth in paragraph 2(b) of Annex
I.
"Federal Reserve" has the meaning set forth in paragraph 3 of Annex I.
"Fiduciary Indemnified Person" shall mean each of the Institutional
Trustee (including in its individual capacity), the Delaware Trustee (including
in its individual capacity), any Affiliate of the Institutional Trustee or
Delaware Trustee and any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the Institutional
Trustee or Delaware Trustee.
"Fiscal Year" has the meaning set forth in Section 10.1.
"Fixed Rate Period Remaining Life" has the meaning set forth in
paragraph 4(a) of Annex I.
"Guarantee" means the guarantee agreement to be dated as of the Closing
Date, of the Sponsor in respect of the Capital Securities.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Statutory Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Indenture dated as of the Closing Date, between
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued, as such Indenture and
any supplemental indenture may be amended, supplemented or otherwise modified
from time to time.
"Indenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 4.3.
"Interest" means any interest due on the Debentures including any
Additional Interest and Defaulted Interest. "Investment Company" means
an investment company as defined in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in paragraph 4(a)
of Annex I.
"Liquidation" has the meaning set forth in paragraph 3 of Annex I.
"Liquidation Distribution" has the meaning set forth in paragraph 3 of
Annex I.
"Majority in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Maturity Date" has the meaning set forth in paragraph 4(a) of Annex I.
"Officers' Certificates" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
providing for it in this Declaration shall include:
(a)......a statement that each officer signing the Certificate has read
the covenant or condition and the definitions relating thereto;
(b)......a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Certificate;
(c)......a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d)......a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"OTS" has the meaning set forth in paragraph 3 of Annex I.
"Paying Agent" has the meaning specified in Section 6.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Placement Agreement" means the Placement Agreement relating to the
offering and sale of Capital Securities in the form of Exhibit C.
"Primary Treasury Dealer" has the meaning set forth in paragraph 4(a)
of Annex I.
"Property Account" has the meaning set forth in Section 2.8(c).
"Pro Rata" has the meaning set forth in paragraph 8 of Annex I.
"Quorum" means a majority of the Administrators or, if there are only
two Administrators, both of them.
"Quotation Agent" has the meaning set forth in paragraph 4(a) of Annex
I.
"Redemption Date" has the meaning set forth in paragraph 4(a) of Annex
I.
"Redemption/Distribution Notice" has the meaning set forth in paragraph
4(e) of Annex I.
"Redemption Price" has the meaning set forth in paragraph 4(a) of Annex
I.
"Reference Treasury Dealer" has the meaning set forth in paragraph 4(a)
of Annex I.
"Reference Treasury Dealer Quotations" has the meaning set forth in
paragraph 4(a) of Annex I.
"Registrar" has the meaning set forth in Section 6.2.
"Relevant Trustee" has the meaning set forth in Section 4.5(a).
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or other
officer of the Corporate Trust Office of the Institutional 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.
"Restricted Securities Legend" has the meaning set forth in Section
8.2(b).
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
---------
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
---------
"Securities" means the Common Securities and the Capital Securities.
----------
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Special Event" has the meaning set forth in paragraph 4(a) of Annex I.
"Special Redemption Date" has the meaning set forth in paragraph 4(a)
of Annex I.
"Special Redemption Price" has the meaning set forth in paragraph 4(a)
of Annex I.
"Sponsor" means MFB Corp., an Indiana corporation, or any successor
entity in a merger, consolidation or amalgamation, in its capacity as sponsor of
the Trust.
"Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ss.ss. 3801, et seq. as may be amended from
--------------------
time to time.
"Successor Entity" has the meaning set forth in Section 2.15(b).
"Successor Delaware Trustee" has the meaning set forth in Section
4.5(e).
"Successor Institutional Trustee" has the meaning set forth in Section
4.5(b).
"Successor Securities" has the meaning set forth in Section 2.15(b).
"Super Majority" has the meaning set forth in paragraph 5(b) of Annex
I.
"Tax Event" has the meaning set forth in paragraph 4(a) of Annex I.
"10% in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of 10%
or more of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"3-Month LIBOR" has the meaning set forth in paragraph 4(a) of Annex I.
"Transfer Agent" has the meaning set forth in Section 6.2.
"Treasury Rate" has the meaning set forth in paragraph 4(a) of Annex I.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Institutional Trustee pursuant to the trusts of this
Declaration.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"U.S. Person" means a United States Person as defined in Section
7701(a)(30) of the Code.
ARTICLE II........
ORGANIZATION
Section 2.1.......Name. The Trust is named "MFBC Statutory Trust I," as such
name may be modified from time to time by the Administrators following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrators.
Section 2.2.......Office. The address of the principal office of the Trust is
c/o Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-1600. On at least 10 Business Days written notice to
the Holders of the Securities, the Administrators may designate another
principal office, which shall be in a state of the United States or in the
District of Columbia.
Section 2.3.......Purpose. The exclusive purposes and functions of the Trust are
(a) to issue and sell the Securities representing undivided beneficial interests
in the assets of the Trust, (b) to invest the gross proceeds from such sale to
acquire the Debentures, (c) to facilitate direct investment in the assets of the
Trust through issuance of the Common Securities and the Capital Securities and
(d) except as otherwise limited herein, to engage in only those other activities
necessary or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
Section 2.4.......Authority. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
in accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and are not intended to be
trustees or fiduciaries with respect to the Trust or the Holders. The
Institutional Trustee shall have the right, but shall not be obligated except as
provided in Section 2.6, to perform those duties assigned to the Administrators.
Section 2.5.......Title to Property of the Trust. Except as provided in Section
2.8 with respect to the Debentures and the Property Account or as otherwise
provided in this Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the
assets of the Trust.
Section 2.6.......Powers and Duties of the Trustees and the Administrators.
---------------------------------------------------------
(a)...... The Trustees and the Administrators shall conduct the affairs of the
Trust in accordance with the terms of this Declaration. Subject to the
limitations set forth in paragraph (b) of this Section, and in accordance with
the following provisions (i) and (ii), the Trustees and the Administrators shall
have the authority to enter into all transactions and agreements determined by
the Institutional Trustee to be appropriate in exercising the authority, express
or implied, otherwise granted to the Trustees or the Administrators, as the case
may be, under this Declaration, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i)...... Each Administrator shall have the power and authority to act on behalf
of the Trust with respect to the following matters:
(A) the issuance and sale of the Securities;
(B) to cause the Trust to enter into, and to execute and deliver on behalf
of the Trust, such agreements as may be necessary or desirable in
connection with the purposes and function of the Trust, including
agreements with the Paying Agent;
(C) ensuring compliance with the Securities Act, applicable state
securities or blue sky laws;
(D) the sending of notices (other than notices of default), and other
information regarding the Securities and the Debentures to the Holders
in accordance with this Declaration;
(E) the consent to the appointment of a Paying Agent, Transfer Agent and
Registrar in accordance with this Declaration, which consent shall not
be unreasonably withheld or delayed;
(F) execution and delivery of the Securities in accordance with this
Declaration;
(G) execution and delivery of closing certificates pursuant to the
Placement Agreement and the application for a taxpayer identification
number;
(H) unless otherwise determined by the Holders of a Majority in liquidation
amount of the Securities or as otherwise required by the Statutory
Trust Act, to execute on behalf of the Trust (either acting alone or
together with any or all of the Administrators) any documents that the
Administrators have the power to execute pursuant to this Declaration;
(I) the taking of any action incidental to the foregoing as the
Institutional Trustee may from time to time determine is necessary or
advisable to give effect to the terms of this Declaration for the
benefit of the Holders (without consideration of the effect of any such
action on any particular Holder);
(J) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Capital Securities and Holders of
Common Securities as to such actions and applicable record dates; and
(K) to duly prepare and file all applicable tax returns and tax information
reports that are required to be filed with respect to the Trust on
behalf of the Trust.
(ii) As among the Trustees and the Administrators, the Institutional Trustee
shall have the power, duty and authority to act on behalf of the Trust
with respect to the following matters:
(A) the establishment of the Property Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments made in
respect of the Debentures in the Property Account;
(D) the distribution through the Paying Agent of amounts owed to the
Holders in respect of the Securities;
(E) the exercise of all of the rights, powers and privileges of a holder of
the Debentures;
(F) the sending of notices of default and other information regarding the
Securities and the Debentures to the Holders in accordance with this
Declaration;
(G) the distribution of the Trust Property in accordance with the terms of
this Declaration;
(H) to the extent provided in this Declaration, the winding up of the
affairs of and liquidation of the Trust and the preparation, execution
and filing of the certificate of cancellation with the Secretary of
State of the State of Delaware;
(I) after any Event of Default (provided that such Event of Default is not
by or with respect to the Institutional Trustee) the taking of any
action incidental to the foregoing as the Institutional Trustee may
from time to time determine is necessary or advisable to give effect to
the terms of this Declaration and protect and conserve the Trust
Property for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder); and
(J) to take all action that may be necessary for the preservation and the
continuation of the Trust's valid existence, rights, franchises and
privileges as a statutory trust under the laws of the State of
Delaware.
(iii) The Institutional Trustee shall have the power and authority to act on
behalf of the Trust with respect to any of the duties, liabilities,
powers or the authority of the Administrators set forth in Section
2.6(a)(i)(D), (E) and (F) herein but shall not have a duty to do any
such act unless specifically requested to do so in writing by the
Sponsor, and shall then be fully protected in acting pursuant to such
written request; and in the event of a conflict between the action of
the Administrators and the action of the Institutional Trustee, the
action of the Institutional Trustee shall prevail.
(b) So long as this Declaration remains in effect, the Trust (or the
Trustees or Administrators acting on behalf of the Trust) shall not
undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, neither the
Trustees nor the Administrators may cause the Trust to (i) acquire any
investments or engage in any activities not authorized by this
Declaration, (ii) sell, assign, transfer, exchange, mortgage, pledge,
set-off or otherwise dispose of any of the Trust Property or interests
therein, including to Holders, except as expressly provided herein,
(iii) take any action that would reasonably be expected (x) to cause
the Trust to fail or cease to qualify as a "grantor trust" for United
States federal income tax purposes or (y) to require the trust to
register as an Investment Company under the Investment Company Act,
(iv) incur any indebtedness for borrowed money or issue any other debt
or (v) take or consent to any action that would result in the placement
of a lien on any of the Trust Property. The Institutional Trustee
shall, at the sole cost and expense of the Trust, defend all claims and
demands of all Persons at any time claiming any lien on any of the
Trust Property adverse to the interest of the Trust or the Holders in
their capacity as Holders.
(c) In connection with the issuance and sale of the Capital Securities, the
Sponsor shall have the right and responsibility to assist the Trust
with respect to, or effect on behalf of the Trust, the following (and
any actions taken by the Sponsor in furtherance of the following prior
to the date of this Declaration are hereby ratified and confirmed in
all respects):
(i) the taking of any action necessary to obtain an exemption from the
Securities Act;
(ii) the determination of the States in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and
the determination of any and all such acts, other than actions which
must be taken by or on behalf of the Trust, and the advice to the
Administrators of actions they must take on behalf of the Trust, and
the preparation for execution and filing of any documents to be
executed and filed by the Trust or on behalf of the Trust, as the
Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States in connection with the sale of the
Capital Securities;
(iii) the negotiation of the terms of, and the execution and delivery of, the
Placement Agreement providing for the sale of the Capital Securities;
and
(iv) the taking of any other actions necessary or desirable to carry out any
of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrators and
the Holders of a Majority in liquidation amount of the Common
Securities are authorized and directed to conduct the affairs of the
Trust and to operate the Trust so that the Trust will not (i) be deemed
to be an Investment Company required to be registered under the
Investment Company Act, and (ii) fail to be classified as a "grantor
trust" for United States federal income tax purposes. The
Administrators and the Holders of a Majority in liquidation amount of
the Common Securities shall not take any action inconsistent with the
treatment of the Debentures as indebtedness of the Debenture Issuer for
United States federal income tax purposes. In this connection, the
Administrators and the Holders of a Majority in liquidation amount of
the Common Securities are authorized to take any action, not
inconsistent with applicable laws, the Certificate of Trust or this
Declaration, as amended from time to time, that each of the
Administrators and the Holders of a Majority in liquidation amount of
the Common Securities determines in their discretion to be necessary or
desirable for such purposes.
(e) All expenses incurred by the Administrators or the Trustees pursuant to
this Section 2.6 shall be reimbursed by the Sponsor, and the Trustees
and the Administrators shall have no obligations with respect to such
expenses (for purposes of clarification, this Section 2.6(e) does not
contemplate the payment by the Sponsor of acceptance or annual
administration fees owing to the Trustees under this Declaration or the
fees and expenses of the Trustees' counsel in connection with the
closing of the transactions contemplated by this Declaration).
(f) The assets of the Trust shall consist of the Trust Property.
(g) Legal title to all Trust Property shall be vested at all times in the
Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee and the Administrators for
the benefit of the Trust in accordance with this Declaration.
(h) If the Institutional Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Declaration and
such proceeding has been discontinued or abandoned for any reason, or
has been determined adversely to the Institutional Trustee or to such
Holder, then and in every such case the Sponsor, the Institutional
Trustee and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the
Institutional Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 2.7 Prohibition of Actions by the Trust and the Institutional Trustee.
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(a) The Trust shall not, and the Institutional Trustee shall cause the
Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and
the Institutional Trustee shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the Debentures,
but shall distribute all such proceeds to Holders of the Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust Property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans represented
by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever other than
as expressly provided herein;
(vi) issue any securities or other evidences of beneficial ownership of, or
beneficial interest in, the Trust other than the Securities;
(vii) carry on any "trade or business" as that phrase is used in the Code; or
(viii) other than as provided in this Declaration (including Annex I), (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures,
(B) waive any past default that is waivable under the Indenture, (C)
exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required unless the Trust
shall have received a written opinion of counsel to the effect that
such modification will not cause the Trust to cease to be classified as
a "grantor trust" for United States federal income tax purposes.
Section 2.8.......Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of
the Trust and the Holders of the Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 4.5. Such vesting and
cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Administrators or to the Delaware
Trustee.
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust account
(the "Property Account") in the name of and under the exclusive control
of the Institutional Trustee, and maintained in the Institutional
Trustee's trust department, on behalf of the Holders of the Securities
and, upon the receipt of payments of funds made in respect of the
Debentures held by the Institutional Trustee, deposit such funds into
the Property Account and make payments, or cause the Paying Agent to
make payments, to the Holders of the Capital Securities and Holders of
the Common Securities from the Property Account in accordance with
Section 5.1. Funds in the Property Account shall be held uninvested
until disbursed in accordance with this Declaration;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Capital Securities and the
Common Securities to the extent the Debentures are redeemed or mature;
and
(iii) upon written notice of distribution issued by the Administrators in
accordance with the terms of the Securities, engage in such ministerial
activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the
occurrence of certain circumstances pursuant to the terms of the
Securities.
(d) The Institutional Trustee may bring or defend, pay, collect,
compromise, arbitrate, resort to legal action with respect to, or
otherwise adjust claims or demands of or against, the Trust which
arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge
or arises out of the Institutional Trustee's duties and obligations
under this Declaration; provided, however, that if an Event of Default
has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the
Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder
of the Capital Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or interest
on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Capital Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities will be subrogated to the rights of
such Holder of the Capital Securities to the extent of any payment made
by the Debenture Issuer to such Holder of the Capital Securities in
such Direct Action; provided, however, that no Holder of the Common
Securities may exercise such right of subrogation so long as an Event
of Default with respect to the Capital Securities has occurred and is
continuing.
(e) The Institutional Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of the Securities pursuant to
the terms of the Securities and this Declaration; or
(ii) a Successor Institutional Trustee has been appointed and has accepted
that appointment in accordance with Section 4.5.
(f) The Institutional Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a Holder of the Debentures under
the Indenture and, if an Event of Default occurs and is continuing, the
Institutional Trustee may, for the benefit of Holders of the
Securities, enforce its rights as holder of the Debentures subject to
the rights of the Holders pursuant to this Declaration (including Annex
I) and the terms of the Securities.
The Institutional Trustee must exercise the powers set forth in this
Section 2.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 2.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 2.3.
Section 2.9.Certain Duties and Responsibilities of the Trustees and
Administrators.
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(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all such Events of Default
that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Declaration and no implied covenants
shall be read into this Declaration against the Institutional Trustee.
In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 6.7), the Institutional Trustee shall
exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) The duties and responsibilities of the Trustees and the Administrators
shall be as provided by this Declaration. Notwithstanding the
foregoing, no provision of this Declaration shall require any Trustee
or Administrator to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties
hereunder, or in the exercise of any of their rights or powers if it
shall have reasonable grounds to believe that repayment of such funds
or adequate protection against such risk of liability is not reasonably
assured to it. Whether or not therein expressly so provided, every
provision of this Declaration relating to the conduct or affecting the
liability of or affording protection to the Trustees or Administrators
shall be subject to the provisions of this Article. Nothing in this
Declaration shall be construed to relieve an Administrator or a Trustee
from liability for its own negligent act, its own negligent failure to
act, or its own willful misconduct. To the extent that, at law or in
equity, a Trustee or an Administrator has duties and liabilities
relating to the Trust or to the Holders, such Trustee or such
Administrator shall not be liable to the Trust or to any Holder for
such Trustee's or such Administrator's good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to
the extent that they restrict the duties and liabilities of the
Administrators or the Trustee otherwise existing at law or in equity,
are agreed by the Sponsor and the Holders to replace such other duties
and liabilities of the Administrators or the Trustees.
(c) All payments made by the Institutional Trustee or a Paying Agent in
respect of the Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there
shall be sufficient revenue or proceeds from the Trust Property to
enable the Institutional Trustee or a Paying Agent to make payments in
accordance with the terms hereof. Each Holder, by its acceptance of a
Security, agrees that it will look solely to the revenue and proceeds
from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees and the
Administrators are not personally liable to it for any amount
distributable in respect of any Security or for any other liability in
respect of any Security. This Section 2.9(c) does not limit the
liability of the Trustees expressly set forth elsewhere in this
Declaration.
(d) The Institutional Trustee shall not be liable for its own acts or
omissions hereunder except as a result of its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that:
(i) the Institutional Trustee shall not be liable for any error of judgment
made in good faith by an Authorized Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Institutional Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Capital Securities or the Common Securities,
as applicable, relating to the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under this Declaration;
(iii) the Institutional Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar
manner as the Institutional Trustee deals with similar property for its
fiduciary accounts generally, subject to the protections and
limitations on liability afforded to the Institutional Trustee under
this Declaration;
(iv) the Institutional Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with
the Sponsor; and money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the
Property Account maintained by the Institutional Trustee pursuant to
Section 2.8(c)(i) and except to the extent otherwise required by law;
and
(v) the Institutional Trustee shall not be responsible for monitoring the
compliance by the Administrators or the Sponsor with their respective
duties under this Declaration, nor shall the Institutional Trustee be
liable for any default or misconduct of the Administrators or the
Sponsor.
Section 2.10......Certain Rights of Institutional Trustee.
Subject to the provisions of Section 2.9:
---------------------------------------
(a) the Institutional Trustee may conclusively rely and shall fully be protected
in acting or refraining from acting in good faith upon any resolution, opinion
of counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(b) if (i) in performing its duties under this Declaration, the Institutional
Trustee is required to decide between alternative courses of action, (ii) in
construing any of the provisions of this Declaration, the Institutional Trustee
finds the same ambiguous or inconsistent with any other provisions contained
herein, or (iii) the Institutional Trustee is unsure of the application of any
provision of this Declaration, then, except as to any matter as to which the
Holders of Capital Securities are entitled to vote under the terms of this
Declaration, the Institutional Trustee may deliver a notice to the Sponsor
requesting the Sponsor's written instructions as to the course of action to be
taken and the Institutional Trustee shall take such action, or refrain from
taking such action, as the Institutional Trustee shall be instructed in writing,
in which event the Institutional Trustee shall have no liability except for its
own negligence or willful misconduct;
(c) any direction or act of the Sponsor or the Administrators contemplated by
this Declaration shall be sufficiently evidenced by an Officers' Certificate;
(d) whenever in the administration of this Declaration, the Institutional
Trustee shall deem it desirable that a matter be proved or established before
undertaking, suffering or omitting any action hereunder, the Institutional
Trustee (unless other evidence is herein specifically prescribed) may request
and conclusively rely upon an Officers' Certificate as to factual matters which,
upon receipt of such request, shall be promptly delivered by the Sponsor or the
Administrators;
(e) the Institutional Trustee shall have no duty to see to any recording, filing
or registration of any instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any rerecording,
refiling or reregistration thereof;
(f) the Institutional Trustee may consult with counsel of its selection (which
counsel may be counsel to the Sponsor or any of its Affiliates) and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon and in accordance with such advice; the Institutional
Trustee shall have the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent jurisdiction;
(g) the Institutional Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Declaration at the request or
direction of any of the Holders pursuant to this Declaration, unless such
Holders shall have offered to the Institutional Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; provided,
that nothing contained in this Section 2.10(g) shall be taken to relieve the
Institutional Trustee, subject to Section 2.9(b), upon the occurrence of an
Event of Default (that has not been cured or waived pursuant to Section 6.7), to
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs;
(h) the Institutional Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but the
Institutional Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;
(i) the Institutional Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its agents or
attorneys and the Institutional Trustee shall not be responsible for any
misconduct or negligence on the part of or for the supervision of, any such
agent or attorney appointed with due care by it hereunder;
(j) whenever in the administration of this Declaration the Institutional Trustee
shall deem it desirable to receive instructions with respect to enforcing any
remedy or right or taking any other action hereunder the Institutional Trustee
(i) may request instructions from the Holders of the Capital Securities which
instructions may only be given by the Holders of the same proportion in
liquidation amount of the Capital Securities as would be entitled to direct the
Institutional Trustee under the terms of the Capital Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be fully protected in acting in accordance with such instructions;
(k) except as otherwise expressly provided in this Declaration, the
Institutional Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration;
(l) when the Institutional Trustee incurs expenses or renders services in
connection with a Bankruptcy Event, such expenses (including the fees and
expenses of its counsel) and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law or law relating
to creditors rights generally;
(m) the Institutional Trustee shall not be charged with knowledge of an Event of
Default unless a Responsible Officer of the Institutional Trustee obtains actual
knowledge of such event or the Institutional Trustee receives written notice of
such event from any Holder, the Sponsor or the Debenture Trustee;
(n) any action taken by the Institutional Trustee or its agents hereunder shall
bind the Trust and the Holders of the Securities, and the signature of the
Institutional Trustee or its agents alone shall be sufficient and effective to
perform any such action and no third party shall be required to inquire as to
the authority of the Institutional Trustee to so act or as to its compliance
with any of the terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's taking such
action; and
(o) no provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
Section 2.11......Delaware Trustee. Notwithstanding any other provision of this
Declaration other than Section 4.1, the Delaware Trustee shall not be entitled
to exercise any powers, nor shall the Delaware Trustee have any of the duties
and responsibilities of any of the Trustees or the Administrators described in
this Declaration (except as may be required under the Statutory Trust Act).
Except as set forth in Section 4.1, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Statutory Trust Act.
Section 2.12......Execution of Documents. Unless otherwise determined in writing
by the Institutional Trustee, and except as otherwise required by the Statutory
Trust Act, the Institutional Trustee, or any one or more of the Administrators,
as the case may be, is authorized to execute on behalf of the Trust any
documents that the Trustees or the Administrators, as the case may be, have the
power and authority to execute pursuant to Section 2.6.
Section 2.13......Not Responsible for Recitals or Issuance of Securities. The
recitals contained in this Declaration and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration, the
Debentures or the Securities.
Section 2.14......Duration of Trust. The Trust, unless earlier dissolved
pursuant to the provisions of Article VII hereof, shall be in existence for 35
years from the Closing Date.
Section 2.15......Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except
as described in Section 2.15(b) and (c) and except in connection with
the liquidation of the Trust and the distribution of the Debentures to
Holders of Securities pursuant to Section 7.1(a)(iv) of the Declaration
or Section 4 of Annex I.
(b) The Trust may, with the consent of the Institutional Trustee and
without the consent of the Holders of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any state; provided that:
(i) if the Trust is not the surviving entity, such successor entity (the
"Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities; or
(B) substitutes for the Securities other securities having substantially
the same terms as the Securities (the "Successor Securities") so that
the Successor Securities rank the same as the Securities rank with
respect to Distributions and payments upon Liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity that
possesses substantially the same powers and duties as the Institutional
Trustee as the Holder of the Debentures;
(iii) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect;
(iv) the Institutional Trustee receives written confirmation from Moody's
Investor Services, Inc. and any other nationally recognized statistical
rating organization that rates securities issued by the initial
purchaser of the Capital Securities that it will not reduce or withdraw
the rating of any such securities because of such merger, conversion,
consolidation, amalgamation or replacement;
(v) such Successor Entity has a purpose substantially identical to that of
the Trust;
(vi) prior to such merger, consolidation, amalgamation or replacement, the
Trust has received an opinion of a nationally recognized independent
counsel to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material
respect;
(B) following such merger, consolidation, amalgamation or replacement,
neither the Trust nor the Successor Entity will be required to register
as an Investment Company; and
(C) following such merger, consolidation, amalgamation or replacement, the
Trust (or the Successor Entity) will continue to be classified as a
"grantor trust" for United States federal income tax purposes;
(vii) the Sponsor guarantees the obligations of such Successor Entity under
the Successor Securities at least to the extent provided by the
Guarantee;
(viii) the Sponsor owns 100% of the common securities of any Successor Entity;
and
(ix) prior to such merger, consolidation, amalgamation or replacement, the
Institutional Trustee shall have received an Officers' Certificate of
the Administrators and an opinion of counsel, each to the effect that
all conditions precedent under this Section 2.15(b) to such transaction
have been satisfied.
(c) Notwithstanding Section 2.15(b), the Trust shall not, except with the
consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced
by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or Successor
Entity to be classified as other than a grantor trust for United States
federal income tax purposes.
ARTICLE III.......
SPONSOR
Section 3.1.......Sponsor's Purchase of Common Securities. On the Closing Date,
the Sponsor will purchase all of the Common Securities issued by the Trust in an
amount at least equal to 3% of the capital of the Trust, at the same time as the
Capital Securities are sold.
Section 3.2.......Responsibilities of the Sponsor. In connection with the issue
and sale of the Capital Securities, the Sponsor shall have the exclusive right
and responsibility to engage in, or direct the Administrators to engage in, the
following activities:
(a) to determine the States in which to take appropriate action to qualify the
Trust or to qualify or register for sale all or part of the Capital Securities
and to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States, to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which it was
created; and
(b) to negotiate the terms of and/or execute on behalf of the Trust, the
Placement Agreement and other related agreements providing for the sale of the
Capital Securities.
Section 3.3.......Expenses. In connection with the offering, sale and issuance
of the Debentures to the Trust and in connection with the sale of the Securities
by the Trust, the Sponsor, in its capacity as Debenture Issuer, shall:
(a) pay all reasonable costs and expenses owing to the Debenture Trustee
pursuant to Section 6.6 of the Indenture;
(b) be responsible for and shall pay all debts and obligations (other than with
respect to the Securities) and all costs and expenses of the Trust, the
offering, sale and issuance of the Securities (including fees to the placement
agents in connection therewith), the costs and expenses (including reasonable
counsel fees and expenses) of the Institutional Trustee and the Administrators,
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 Agents, Registrars, Transfer Agents, duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and disposition
of Trust assets and the enforcement by the Institutional Trustee of the rights
of the Holders (for purposes of clarification, this Section 3.3(b) does not
contemplate the payment by the Sponsor of acceptance or annual administration
fees owing to the Trustees pursuant to the services to be provided by the
Trustees under this Declaration or the fees and expenses of the Trustees'
counsel in connection with the closing of the transactions contemplated by this
Declaration); and
(c) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 3.3 shall be for the
benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 3.3 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 3.3.
Section 3.4.......Right to Proceed. The Sponsor acknowledges the rights of
Holders to institute a Direct Action as set forth in Section 2.8(d) hereto.
ARTICLE IV........
INSTITUTIONAL TRUSTEE AND ADMINISTRATORS
Section 4.1.Number of Trustees. The number of Trustees shall initially be two,
and;
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(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holder of a Majority in liquidation amount
of the Common Securities voting as a class at a meeting of the Holder of the
Common Securities; provided, however, that there shall be a Delaware Trustee if
required by Section 4.2; and there shall always be one Trustee who shall be the
Institutional Trustee, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements, in which case Section 2.11 shall have no
application to such entity in its capacity as Institutional Trustee.
Section 4.2.......Delaware Trustee; Eligibility.
(a) If required by the Statutory Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(i) a natural person at least 21 years of age who is a resident of the
State of Delaware; or
(ii) if not a natural person, an entity which is organized under the laws of
the United States or any state thereof or the District of Columbia, has
its principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law, including ss. 3807 of the
Statutory Trust Act.
(b) the initial Delaware Trustee shall be Wilmington Trust Company.
Section 4.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) not offer or provide credit or credit enhancement to the Trust; and
(iii) be a banking corporation or trust company organized and doing business
under the laws of the United States of America or any state thereof or
the District of Columbia, authorized under such laws to exercise
corporate trust powers, 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, or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 4.3(a)(iii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 4.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in
Section 4.5.
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act of 1939, as amended, the Institutional Trustee shall either
eliminate such interest or resign, to the extent and in the manner
provided by, and subject to this Declaration.
(d) The initial Institutional Trustee shall be Wilmington Trust Company.
Section 4.4. Administrators. Each Administrator shall be a U.S. Person, 21 years
of age or older and authorized to bind the Sponsor. The initial Administrators
shall be Charles J. Viater and Terry Clark. There shall at all times be at least
one Administrator. Except where a requirement for action by a specific number of
Administrators is expressly set forth in this Declaration and except with
respect to any action the taking of which is the subject of a meeting of the
Administrators, any action required or permitted to be taken by the
Administrators may be taken by, and any power of the Administrators may be
exercised by, or with the consent of, any one such Administrator.
Section 4.5.Appointment, Removal and Resignation of Trustees and Administrators
(a) No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of this Section 4.5.
(b) Subject to Section 4.5(a), a Relevant Trustee may resign at any time by
giving written notice thereof to the Holders of the Securities and by appointing
a successor Relevant Trustee. Upon the resignation of the Institutional Trustee,
the Institutional Trustee shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements their expenses and charges to
serve as the successor Institutional Trustee on a form provided by the
Administrators, and selecting the Person who agrees to the lowest expense and
charges (the "Successor Institutional Trustee"). If the instrument of acceptance
by the successor Relevant Trustee required by this Section 4.5 shall not have
been delivered to the Relevant Trustee within 60 days after the giving of such
notice of resignation or delivery of the instrument of removal, the Relevant
Trustee may petition, at the expense of the Trust, any federal, state or
District of Columbia court of competent jurisdiction for the appointment of a
successor Relevant Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Relevant Trustee. The
Institutional Trustee shall have no liability for the selection of such
successor pursuant to this Section 4.5.
(c) Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by an act of the Holders of a Majority in
liquidation amount of the Common Securities. If any Trustee shall be so removed,
the Holders of the Common Securities, by act of the Holders of a Majority in
liquidation amount of the Common Securities delivered to the Relevant Trustee,
shall promptly appoint a successor Relevant Trustee, and such successor Trustee
shall comply with the applicable requirements of this Section 4.5. If an Event
of Default shall have occurred and be continuing, the Institutional Trustee or
the Delaware Trustee, or both of them, may be removed by the act of the Holders
of a Majority in liquidation amount of the Capital Securities, delivered to the
Relevant Trustee (in its individual capacity and on behalf of the Trust). If any
Trustee shall be so removed, the Holders of Capital Securities, by act of the
Holders of a Majority in liquidation amount of the Capital Securities then
outstanding delivered to the Relevant Trustee, shall promptly appoint a
successor Relevant Trustee or Trustees, and such successor Trustee shall comply
with the applicable requirements of this Section 4.5. If no successor Relevant
Trustee shall have been so appointed by the Holders of a Majority in liquidation
amount of the Capital Securities and accepted appointment in the manner required
by this Section 4.5 within 30 days after delivery of an instrument of removal,
the Relevant Trustee or any Holder who has been a Holder of the Securities for
at least six months may, on behalf of himself and all others similarly situated,
petition any federal, state or District of Columbia court of competent
jurisdiction for the appointment of a successor Relevant Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a successor Relevant Trustee or Trustees.
(d) The Institutional Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all Holders
and to the Sponsor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Institutional
Trustee.
(e) Notwithstanding the foregoing or any other provision of this Declaration, in
the event a Delaware Trustee who is a natural person dies or is adjudged by a
court to have become incompetent or incapacitated, the vacancy created by such
death, incompetence or incapacity may be filled by the Institutional Trustee
following the procedures in this Section 4.5 (with the successor being a Person
who satisfies the eligibility requirement for a Delaware Trustee set forth in
this Declaration) (the "Successor Delaware Trustee").
(f) In case of the appointment hereunder of a successor Relevant Trustee, the
retiring Relevant Trustee and each successor Relevant Trustee with respect to
the Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Securities and the Trust and (b) shall add to or change any of the provisions of
this Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee, such retiring
Relevant Trustee shall duly assign, transfer and deliver to such successor
Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Securities and the Trust
subject to the payment of all unpaid fees, expenses and indemnities of such
retiring Relevant Trustee.
(g) No Institutional Trustee or Delaware Trustee shall be liable for the acts or
omissions to act of any Successor Institutional Trustee or Successor Delaware
Trustee, as the case may be.
(h) The Holders of the Capital Securities will have no right to vote to appoint,
remove or replace the Administrators, which voting rights are vested exclusively
in the Holders of the Common Securities.
(i) Any successor Delaware Trustee shall file an amendment to the Certificate of
Trust with the Secretary of State of the State of Delaware identifying the name
and principal place of business of such Delaware Trustee in the State of
Delaware.
Section 4.6. Vacancies Among Trustees. If a Trustee ceases to hold office for
any reason and the number of Trustees is not reduced pursuant to Section 4.1, a
vacancy shall occur. A resolution certifying the existence of such vacancy by
the Trustees or, if there are more than two, a majority of the Trustees, shall
be conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 4.5.
Section 4.7. Effect of Vacancies. The death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence or incapacity to perform the
duties of a Trustee shall not operate to dissolve, terminate or annul the Trust
or terminate this Declaration. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled by the appointment of a Trustee in
accordance with Section 4.5, the Institutional Trustee shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by this Declaration.
Section 4.8. Meetings of the Trustees and the Administrators. Meetings of the
Administrators shall be held from time to time upon the call of an
Administrator. Regular meetings of the Administrators may be held in person in
the United States or by telephone, at a place (if applicable) and time fixed by
resolution of the Administrators. Notice of any in-person meetings of the
Trustees with the Administrators or meetings of the Administrators shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Trustees with the Administrators or meetings of
the Administrators or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting. The
presence (whether in person or by telephone) of a Trustee or an Administrator,
as the case may be, at a meeting shall constitute a waiver of notice of such
meeting except where the Trustee or an Administrator, as the case may be,
attends a meeting for the express purpose of objecting to the transaction of any
activity on the grounds that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Trustees or the Administrators, as the case may be, may be taken at a meeting by
vote of a majority of the Trustees or the Administrators present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Trustees or the Administrators. Meetings of the Trustees and the
Administrators together shall be held from time to time upon the call of any
Trustee or an Administrator.
Section 4.9. Delegation of Power.
(a) Any Administrator may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 that is a U.S. Person
his or her power for the purpose of executing any documents contemplated in
Section 2.6; and
(b) the Administrators shall have power to delegate from time to time to such of
their number the doing of such things and the execution of such instruments
either in the name of the Trust or the names of the Administrators or otherwise
as the Administrators may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
Section 4.10. Conversion, Consolidation or Succession to Business. Any Person
into which the Institutional Trustee or the Delaware Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Institutional Trustee or the
Delaware Trustee shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee shall be the successor of the Institutional Trustee or the
Delaware Trustee hereunder, provided such Person shall be otherwise qualified
and eligible under this Article and, provided, further, that such Person shall
file an amendment to the Certificate of Trust with the Secretary of State of the
State of Delaware as contemplated in Section 4.5(i).
ARTICLE V
DISTRIBUTIONS
Section 5.1. Distributions. Holders shall receive Distributions in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Capital Securities and the Common Securities in accordance
with the preferences set forth in their respective terms. If and to the extent
that the Debenture Issuer makes a payment of Interest or any principal on the
Debentures held by the Institutional Trustee, the Institutional Trustee shall
and is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of such amounts to Holders.
ARTICLE VI
ISSUANCE OF SECURITIES
Section 6.1. General Provisions Regarding Securities.
(a) The Administrators shall, on behalf of the Trust, issue one series of
capital securities substantially in the form of Exhibit A-1 representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I and one series of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I. The Trust shall issue no securities or other interests
in the assets of the Trust other than the Capital Securities and the Common
Securities. The Capital Securities rank pari passu to, and payment thereon shall
be made Pro Rata with, the Common Securities except that, where an Event of
Default has occurred and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Capital Securities as set forth in Annex I.
(b) The Certificates shall be signed on behalf of the Trust by one or more
Administrators. Such signature shall be the facsimile or manual signature of any
Administrator. In case any Administrator of the Trust who shall have signed any
of the Securities shall cease to be such Administrator before the Certificates
so signed shall be delivered by the Trust, such Certificates nevertheless may be
delivered as though the person who signed such Certificates had not ceased to be
such Administrator, and any Certificate may be signed on behalf of the Trust by
such persons who, at the actual date of execution of such Security, shall be an
Administrator of the Trust, although at the date of the execution and delivery
of the Declaration any such person was not such an Administrator. A Capital
Security shall not be valid until authenticated by the facsimile or manual
signature of an Authorized Officer of the Institutional Trustee. Such signature
shall be conclusive evidence that the Capital Security has been authenticated
under this Declaration. Upon written order of the Trust signed by one
Administrator, the Institutional Trustee shall authenticate the Capital
Securities for original issue. The Institutional Trustee may appoint an
authenticating agent that is a U.S. Person acceptable to the Trust to
authenticate the Capital Securities. A Common Security need not be so
authenticated.
(c) The consideration received by the Trust for the issuance of the Securities
shall constitute a contribution to the capital of the Trust and shall not
constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and,
except as provided in Section 9.1(b) with respect to the Common Securities,
non-assessable.
(e) Every Person, by virtue of having become a Holder in accordance with the
terms of this Declaration, shall be deemed to have expressly assented and agreed
to the terms of, and shall be bound by, this Declaration and the Guarantee.
Section 6.2. Paying Agent, Transfer Agent and Registrar. The Trust shall
maintain in Wilmington, Delaware, an office or agency where the Capital
Securities may be presented for payment ("Paying Agent"), and an office or
agency where Securities may be presented for registration of transfer or
exchange (the "Transfer Agent"). The Trust shall keep or cause to be kept at
such office or agency a register for the purpose of registering Securities,
transfers and exchanges of Securities, such register to be held by a registrar
(the "Registrar"). The Administrators may appoint the Paying Agent, the
Registrar and the Transfer Agent and may appoint one or more additional Paying
Agents or one or more co-Registrars, or one or more co-Transfer Agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent, the term "Registrar" includes any additional registrar
or co-Registrar and the term "Transfer Agent" includes any additional transfer
agent. The Administrators may change any Paying Agent, Transfer Agent or
Registrar at any time without prior notice to any Holder. The Administrators
shall notify the Institutional Trustee of the name and address of any Paying
Agent, Transfer Agent and Registrar not a party to this Declaration. The
Administrators hereby initially appoint the Institutional Trustee to act as
Paying Agent, Transfer Agent and Registrar for the Capital Securities and the
Common Securities. The Institutional Trustee or any of its Affiliates in the
United States may act as Paying Agent, Transfer Agent or Registrar.
Section 6.3. Form and Dating. The Capital Securities and the Institutional
Trustee's certificate of authentication thereon shall be substantially in the
form of Exhibit A-1, and the Common Securities shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be typed, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrators, as conclusively evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Sponsor). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
Each Capital Security shall be dated on or before the date of its
authentication. The terms and provisions of the Securities set forth in Annex I
and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the
terms of this Declaration and to the extent applicable, the Institutional
Trustee, the Delaware Trustee, the Administrators and the Sponsor, by their
execution and delivery of this Declaration, expressly agree to such terms and
provisions and to be bound thereby. Capital Securities will be issued only in
blocks having a stated liquidation amount of not less than $100,000.00 and any
multiple of $1,000.00 in excess thereof.
The Capital Securities are being offered and sold by the Trust pursuant
to the Placement Agreement in definitive, registered form without coupons and
with the Restricted Securities Legend.
Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Registrar, or if the
Registrar shall receive evidence to its satisfaction of the destruction, loss or
theft of any Certificate; and
(b) there shall be delivered to the Registrar, the Administrators and the
Institutional Trustee such security or indemnity as may be required by them to
keep each of them harmless;
then, in the absence of notice that such Certificate shall have been acquired by
a protected purchaser, an Administrator on behalf of the Trust shall execute
(and in the case of a Capital Security Certificate, the Institutional Trustee
shall authenticate) and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 6.4, the Registrar or the Administrators may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 6.5. Temporary Securities. Until definitive Securities are ready for
delivery, the Administrators may prepare and, in the case of the Capital
Securities, the Institutional Trustee shall authenticate, temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Administrators consider appropriate for
temporary Securities. Without unreasonable delay, the Administrators shall
prepare and, in the case of the Capital Securities, the Institutional Trustee
shall authenticate, definitive Securities in exchange for temporary Securities.
Section 6.6. Cancellation. The Administrators at any time may deliver Securities
to the Institutional Trustee for cancellation. The Registrar shall forward to
the Institutional Trustee any Securities surrendered to it for registration of
transfer, redemption or payment. The Institutional Trustee shall promptly cancel
all Securities surrendered for registration of transfer, payment, replacement or
cancellation and shall dispose of such canceled Securities as the Administrators
direct. The Administrators may not issue new Securities to replace Securities
that have been paid or that have been delivered to the Institutional Trustee for
cancellation.
Section 6.7. Rights of Holders; Waivers of Past Defaults.
(a) The legal title to the Trust Property is vested exclusively in the
Institutional Trustee (in its capacity as such) in accordance with Section 2.5,
and the Holders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Trust except as described below. The
Securities shall be personal property giving only the rights specifically set
forth therein and in this Declaration. The Securities shall have no preemptive
or similar rights.
(b) For so long as any Capital Securities remain outstanding, if upon an
Indenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of a Majority in liquidation amount of the Capital Securities then
outstanding shall have the right to make such declaration by a notice in writing
to the Institutional Trustee, the Sponsor and the Debenture Trustee.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Institutional Trustee, subject to the provisions hereof, fails
to annul any such declaration and waive such default, the Holders of a Majority
in liquidation amount of the Capital Securities, by written notice to the
Institutional Trustee, the Sponsor and the Debenture Trustee, may rescind and
annul such declaration and its consequences if:
(i) the Debenture Issuer has paid or deposited with the Debenture Trustee a
sum sufficient to pay
(A) all overdue installments of interest on all of the Debentures,
(B) any accrued Additional Interest on all of the Debentures,
(C) the principal of (and premium, if any, on) any Debentures that have
become due otherwise than by such declaration of acceleration and
interest and Additional Interest thereon at the rate borne by the
Debentures, and
(D) all sums paid or advanced by the Debenture Trustee under the Indenture
and the reasonable compensation, expenses, disbursements and advances
of the Debenture Trustee and the Institutional Trustee, their agents
and counsel; and
(ii) all Events of Default with respect to the Debentures, other than the
non-payment of the principal of the Debentures that has become due
solely by such acceleration, have been cured or waived as provided in
Section 5.7 of the Indenture.
The Holders of at least a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture or any Indenture Event of Default, except a
default or Indenture Event of Default in the payment of principal or interest on
the Debentures (unless such default or Indenture Event of Default has been cured
and a sum sufficient to pay all matured installments of interest and principal
due otherwise than by acceleration has been deposited with the Debenture
Trustee) or a default under the Indenture or an Indenture Event of Default in
respect of a covenant or provision that under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Institutional Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of any
part of the Capital Securities, a record date shall be established for
determining Holders of outstanding Capital Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Institutional Trustee receives such notice. The Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such record
date; provided, that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 6.7.
(c) Except as otherwise provided in paragraphs (a) and (b) of this Section 6.7,
the Holders of at least a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default or Event of Default and its consequences. Upon such waiver, any
such default or Event of Default shall cease to exist, and any default or Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default or impair any right consequent thereon.
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
Section 7.1. Dissolution and Termination of Trust.
(a) The Trust shall dissolve on the first to occur of:
(i) unless earlier dissolved, on September 15, 2040, the expiration of the
term of the Trust;
(ii) upon a Bankruptcy Event with respect to the Sponsor, the Trust or the
Debenture Issuer;
(iii) upon the filing of a certificate of dissolution or its equivalent with
respect to the Sponsor (other than in connection with a merger,
consolidation or similar transaction not prohibited by the Indenture,
this Declaration or the Guarantee, as the case may be) or upon the
revocation of the charter of the Sponsor and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iv) upon the distribution of the Debentures to the Holders of the
Securities, upon exercise of the right of the Holder of all of the
outstanding Common Securities to dissolve the Trust as provided in
Annex I hereto;
(v) upon the entry of a decree of judicial dissolution of the Holder of the
Common Securities, the Sponsor, the Trust or the Debenture Issuer;
(vi) when all of the Securities shall have been called for redemption and
the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities; or
(vii) before the issuance of any Securities, with the consent of all of the
Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 7.1(a), and after satisfaction of liabilities to creditors
of the Trust as required by applicable law, including of the Statutory
Trust Act, and subject to the terms set forth in Annex I, the
Institutional Trustee shall terminate the Trust by filing a certificate
of cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 2.9 and Article IX shall survive the
termination of the Trust.
ARTICLE VIII
TRANSFER OF INTERESTS
Section 8.1. General.
(a) Subject to Section 8.1(c), where Capital Securities are presented to the
Registrar or a co-registrar with a request to register a transfer or to exchange
them for an equal number of Capital Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Trust shall issue and the Institutional Trustee
shall authenticate Capital Securities at the Registrar's request.
(b) Upon issuance of the Common Securities, the Sponsor shall acquire and retain
beneficial and record ownership of the Common Securities and for so long as the
Securities remain outstanding, and to the fullest extent permitted by applicable
law, the Sponsor shall maintain 100% ownership of the Common Securities;
provided, however, that any permitted successor of the Sponsor, in its capacity
as Debenture Issuer, under the Indenture that is a U.S. Person may succeed to
the Sponsor's ownership of the Common Securities.
(c) Capital Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by applicable law,
any transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void and will be deemed to be of no legal
effect whatsoever and any such transferee shall be deemed not to be the holder
of such Capital Securities for any purpose, including but not limited to the
receipt of Distributions on such Capital Securities, and such transferee shall
be deemed to have no interest whatsoever in such Capital Securities.
(d) The Registrar shall provide for the registration of Securities and of
transfers of Securities, which will be effected without charge but only upon
payment (with such indemnity as the Registrar may require) in respect of any tax
or other governmental charges that may be imposed in relation to it. Upon
surrender for registration of transfer of any Securities, the Registrar shall
cause one or more new Securities of the same tenor to be issued in the name of
the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Institutional Trustee pursuant
to Section 6.6. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
(e) The Trust shall not be required (i) to issue, register the transfer of, or
exchange any Securities during a period beginning at the opening of business
fifteen days before the day of any selection of Securities for redemption and
ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all Holders of the
Securities to be redeemed, or (ii) to register the transfer or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
Section 8.2. Transfer Procedures and Restrictions.
(a) The Capital Securities shall bear the Restricted Securities Legend, which
shall not be removed unless there is delivered to the Trust such satisfactory
evidence, which may include an opinion of counsel satisfactory to the
Institutional Trustee, as may be reasonably required by the Trust, that neither
the legend nor the restrictions on transfer set forth therein are required to
ensure that transfers thereof comply with the provisions of the Securities Act.
Upon provision of such satisfactory evidence, the Institutional Trustee, at the
written direction of the Trust, shall authenticate and deliver Capital
Securities that do not bear the legend.
(b) Except as permitted by Section 8.2(a), each Capital Security shall bear a
legend (the "Restricted Securities Legend") in substantially the following form
and a Capital Security shall not be transferred except in compliance with such
legend, unless otherwise determined by the Sponsor, upon the advice of counsel
expert 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. THE HOLDER OF THIS SECURITY
BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS SECURITY ONLY (A) TO THE SPONSOR OR THE TRUST, (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 CAPITAL 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 SPONSOR'S AND THE TRUST'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 EACH
OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH
MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. HEDGING TRANSACTIONS
INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE SECURITIES ACT.
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 A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100
SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED
TRANSFER OF SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS
THAN $100,000.00 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.
(c) To permit registrations of transfers and exchanges, the Trust shall execute
and the Institutional Trustee shall authenticate Capital Securities at the
Registrar's request.
(d) Registrations of transfers or exchanges will be effected without charge, but
only upon payment (with such indemnity as the Registrar or the Sponsor may
require) in respect of any tax or other governmental charge that may be imposed
in relation to it.
(e) All Capital Securities issued upon any registration of transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Capital
Securities surrendered upon such registration of transfer or exchange.
Section 8.3. Deemed Security Holders. The Trust, the Administrators, the
Trustees, the Paying Agent, the Transfer Agent or the Registrar may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Administrators, the Trustees, the
Paying Agent, the Transfer Agent or the Registrar shall have actual or other
notice thereof.
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS
Section 9.1. Liability.
(a) Except as expressly set forth in this Declaration, the Guarantee and
the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of the Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to the Statutory Trust Act, the Holders of the Capital
Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
Section 9.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in damages
or otherwise to the Trust or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith upon
the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and, if selected by such Indemnified Person, has been selected by
such Indemnified Person with reasonable care by or on behalf of the Trust,
including information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses, or any other facts pertinent
to the existence and amount of assets from which Distributions to Holders of
Securities might properly be paid.
Section 9.3. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to
the Trust or to any other Covered Person, an Indemnified Person acting
under this Declaration shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that
they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties
hereto to replace such other duties and liabilities of the Indemnified
Person.
(b) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the Indemnified
Person shall act under such express standard and shall not be subject
to any other or different standard imposed by this Declaration or by
applicable law.
Section 9.4. Indemnification.
(a) The Sponsor shall indemnify, to the full extent permitted by law, any
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Trust) arising out of or in connection with the acceptance or
administration of this Declaration by reason of the fact that he is or was an
Indemnified Person against expenses (including reasonable attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Indemnified Person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) The Sponsor shall indemnify, to the full extent permitted by law, any
Indemnified Person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
Trust to procure a judgment in its favor arising out of or in connection with
the acceptance or administration of this Declaration by reason of the fact that
he is or was an Indemnified Person against expenses (including reasonable
attorneys' fees and expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust; provided, however, that no such indemnification
shall be made in respect of any claim, issue or matter as to which such
Indemnified Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(c) To the extent that an Indemnified Person shall be successful on the merits
or otherwise (including dismissal of an action without prejudice or the
settlement of an action without admission of liability) in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b) of this Section
9.4, or in defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification of an Administrator under paragraphs (a) and (b) of this
Section 9.4 (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of the
Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (i) by the Administrators by a majority vote of a
Quorum consisting of such Administrators who were not parties to such action,
suit or proceeding, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion, or (iii) by the Common Security
Holder of the Trust.
(e) To the fullest extent permitted by law, expenses (including reasonable
attorneys' fees and expenses) incurred by an Indemnified Person in defending a
civil, criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (a) and (b) of this Section 9.4 shall be paid by the
Sponsor in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Indemnified Person to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Sponsor as authorized in this Section 9.4.
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Administrators by a
majority vote of a Quorum of disinterested Administrators, (ii) if such a Quorum
is not obtainable, or, even if obtainable, if a quorum of disinterested
Administrators so directs, by independent legal counsel in a written opinion or
(iii) by the Common Security Holder of the Trust, that, based upon the facts
known to the Administrators, counsel or the Common Security Holder at the time
such determination is made, such Indemnified Person acted in bad faith or in a
manner that such Indemnified Person did not believe to be in the best interests
of the Trust, or, with respect to any criminal proceeding, that such Indemnified
Person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Administrators,
independent legal counsel or the Common Security Holder reasonably determine
that such Indemnified Person deliberately breached his duty to the Trust or its
Common or Capital Security Holders.
(f) The Trustees, at the sole cost and expense of the Sponsor, retain the right
to representation by counsel of their own choosing in any action, suit or any
other proceeding for which they are indemnified under paragraphs (a) and (b) of
this Section 9.4, without affecting their right to indemnification hereunder or
waiving any rights afforded to it under this Declaration or applicable law.
(g) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other paragraphs of this Section 9.4 shall not be deemed
exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Sponsor or Capital Security
Holders of the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 9.4 shall be deemed to be provided by a
contract between the Sponsor and each Indemnified Person who serves in such
capacity at any time while this Section 9.4 is in effect. Any repeal or
modification of this Section 9.4 shall not affect any rights or obligations then
existing.
(h) The Sponsor or the Trust may purchase and maintain insurance on behalf of
any Person who is or was an Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power to indemnify him
against such liability under the provisions of this Section 9.4.
(i) For purposes of this Section 9.4, references to "the Trust" shall include,
in addition to the resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a consolidation or
merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
9.4 with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Section 9.4 shall, unless otherwise provided when authorized
or ratified, (i) continue as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors and administrators
of such a Person; and (ii) survive the termination or expiration of this
Declaration or the earlier removal or resignation of an Indemnified Person.
Section 9.5. Outside Businesses. Any Covered Person, the Sponsor, the Delaware
Trustee and the Institutional Trustee may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders of Securities shall have no rights by virtue of this Declaration in
and to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. None of any Covered Person, the
Sponsor, the Delaware Trustee or the Institutional Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
Section 9.6. Compensation; Fee. The Sponsor agrees:
(a) to pay to the Trustees from time to time such compensation for all services
rendered by them hereunder as the parties shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse the Trustees
upon request for all reasonable expenses, disbursements and advances incurred or
made by the Trustees in accordance with any provision of this Declaration
(including the reasonable compensation and the expenses and disbursements of
their respective agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence, bad faith or willful
misconduct.
For purposes of clarification, this Section 9.6 does not contemplate
the payment by the Sponsor of acceptance or annual administration fees owing to
the Trustees under this Declaration or the fees and expenses of the Trustees'
counsel in connection with the closing of the transactions contemplated by this
Declaration.
The provisions of this Section 9.6 shall survive the dissolution of the
Trust and the termination of this Declaration and the removal or resignation of
any Trustee.
No Trustee may claim any lien or charge on any property of the Trust
as a result of any amount due pursuant to this Section 9.6.
ARTICLE X
ACCOUNTING
Section 10.1. Fiscal Year. The fiscal year ("Fiscal Year") of the Trust shall be
the calendar year, or such other year as is required by the Code.
Section 10.2. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Administrators shall
keep, or cause to be kept at the principal office of the Trust in the United
States, as defined for purposes of Treasury Regulations section 301.7701-7, full
books of account, records and supporting documents, which shall reflect in
reasonable detail each transaction of the Trust. The books of account shall be
maintained, at the Sponsor's expense, in accordance with generally accepted
accounting principles, consistently applied. The books of account and the
records of the Trust shall be examined by and reported upon (either separately
or as part of the Sponsor's regularly prepared consolidated financial report) as
of the end of each Fiscal Year of the Trust by a firm of independent certified
public accountants selected by the Administrators.
(b) The Administrators shall cause to be duly prepared and delivered to each of
the Holders of Securities Form 1099 or such other annual United States federal
income tax information statement required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrators shall endeavor
to deliver all such statements within 30 days after the end of each Fiscal Year
of the Trust.
(c) The Administrators, at the Sponsor's expense, shall cause to be duly
prepared at the principal office of the Sponsor in the United States, as `United
States' is defined in Section 7701(a)(9) of the Code (or at the principal office
of the Trust if the Sponsor has no such principal office in the United States),
and filed an annual United States federal income tax return on a Form 1041 or
such other form required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Administrators on behalf
of the Trust with any state or local taxing authority.
Section 10.3. Banking. The Trust shall maintain in the United States, as defined
for purposes of Treasury Regulations section 301.7701-7, one or more bank
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Institutional Trustee.
Section 10.4. Withholding. The Institutional Trustee or any Paying Agent and the
Administrators shall comply with all withholding requirements under United
States federal, state and local law. The Institutional Trustee or any Paying
Agent shall request, and each Holder shall provide to the Institutional Trustee
or any Paying Agent, such forms or certificates as are necessary to establish an
exemption from withholding with respect to the Holder, and any representations
and forms as shall reasonably be requested by the Institutional Trustee or any
Paying Agent to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Administrators shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Institutional Trustee or any
Paying Agent is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Institutional
Trustee or any Paying Agent may reduce subsequent Distributions by the amount of
such withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
Section 11.1. Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed (i) by the Institutional
Trustee, or (ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, by the Delaware
Trustee.
(b) Notwithstanding any other provision of this Article XI, an amendment
may be made, and any such purported amendment shall be valid and
effective only if:
(i) the Institutional Trustee shall have first received
(A) an Officers' Certificate from each of the Trust and the Sponsor that
such amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or the Trust)
that such amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities); and
(ii) the result of such amendment would not be to
(A) cause the Trust to cease to be classified for purposes of United States
federal income taxation as a grantor trust; or
(B) cause the Trust to be deemed to be an Investment Company required to be
registered under the Investment Company Act.
(c) Except as provided in Section 11.1(d), (e) or (h), no amendment shall
be made, and any such purported amendment shall be void and
ineffective, unless the Holders of a Majority in liquidation amount of
the Capital Securities shall have consented to such amendment.
(d) In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Holder, this
Declaration may not be amended to (i) change the amount or timing of
any Distribution on the Securities or otherwise adversely affect the
amount of any Distribution required to be made in respect of the
Securities as of a specified date or change any conversion or exchange
provisions or (ii) restrict the right of a Holder to institute suit for
the enforcement of any such payment on or after such date.
(e) Sections 9.1(b) and 9.1(c) and this Section 11.1 shall not be amended
without the consent of all of the Holders of the Securities.
(f) Article III shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities.
(g) The rights of the Holders of the Capital Securities under Article IV to
appoint and remove Trustees shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Capital
Securities.
(h) This Declaration may be amended by the Institutional Trustee and the
Holders of a Majority in liquidation amount of the Common Securities
without the consent of the Holders of the Capital Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may be
defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the Sponsor; or
(iv) modify, eliminate or add to any provision of this Declaration to such
extent as may be necessary to ensure that the Trust will be classified
for United States federal income tax purposes at all times as a grantor
trust and will not be required to register as an Investment Company
(including without limitation to conform to any change in Rule 3a-5,
Rule 3a-7 or any other applicable rule under the Investment Company Act
or written change in interpretation or application thereof by any
legislative body, court, government agency or regulatory authority)
which amendment does not have a material adverse effect on the rights,
preferences or privileges of the Holders of Securities;
provided, however, that no such modification, elimination or addition
referred to in clauses (i), (ii), (iii) or (iv) shall adversely affect in any
material respect the powers, preferences or special rights of Holders of Capital
Securities.
Section 11.2.Meetings of the Holders of Securities; Action by Written Consent.
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(a) Meetings of the Holders of any class of Securities may be called at any
time by the Administrators (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this
Declaration or the terms of the Securities. The Administrators shall
call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the
Administrators one or more calls in a writing stating that the signing
Holders of the Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any
Holders of the Securities calling a meeting shall specify in writing
the Certificates held by the Holders of the Securities exercising the
right to call a meeting and only those Securities represented by such
Certificates shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph
has been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders of the
Securities:
(i) notice of any such meeting shall be given to all the Holders of
the Securities having a right to vote thereat at least
7 days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of the
Securities is permitted or required under this Declaration, such vote,
consent or approval may be given at a meeting of the
Holders of the Securities. Any action that may be taken at a meeting
of the Holders of the Securities may be taken without
a meeting if a consent in writing setting forth the action so taken
is signed by the Holders of the Securities owning not
less than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at
a meeting at which all Holders of the Securities having a right to
vote thereon were present and voting. Prompt notice of
the taking of action without a meeting shall be given to the
Holders of the Securities entitled to vote who have not
consented in writing. The Administrators may specify that any written
ballot submitted to the Holders of the Securities for
the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Administrators;
(ii) each Holder of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of Securities
is entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Holder of the Securities executing
it. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder,
as if the Trust were a Delaware corporation and the
Holders of the Securities were stockholders of a Delaware corporation;
each meeting of the Holders of the Securities shall
be conducted by the Administrators or by such other Person that the
Administrators may designate; and
(iii) unless the Statutory Trust Act, this Declaration, or the terms of the
Securities otherwise provides, the Administrators, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Holders of the Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote; provided, however,
that each meeting shall be conducted in the United States (as that term
is defined in Treasury Regulations section 301.7701-7).
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE
Section 12.1. Representations and Warranties of Institutional Trustee. The
initial Institutional Trustee represents and warrants to the Trust and to the
Sponsor at the date of this Declaration, and each Successor Institutional
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Institutional Trustee's acceptance of its appointment as Institutional
Trustee, that:
(a) the Institutional Trustee is a Delaware banking corporation with trust
powers, duly organized and validly existing under the laws of the State of
Delaware with trust power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional Trustee of this
Declaration has been duly authorized by all necessary corporate action on the
part of the Institutional Trustee. This Declaration has been duly executed and
delivered by the Institutional Trustee, and it constitutes a legal, valid and
binding obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or at law);
(c) the execution, delivery and performance of this Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or notice to,
any state or federal banking authority is required for the execution, delivery
or performance by the Institutional Trustee of this Declaration.
Section 12.2. Representations of the Delaware Trustee. The Trustee that acts as
initial Delaware Trustee represents and warrants to the Trust and to the Sponsor
at the date of this Declaration, and each Successor Delaware Trustee represents
and warrants to the Trust and the Sponsor at the time of the Successor Delaware
Trustee's acceptance of its appointment as Delaware Trustee that:
(a) if it is not a natural person, the Delaware Trustee is duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) if it is not a natural person, the execution, delivery and performance by
the Delaware Trustee of this Declaration has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee. This Declaration
has been duly executed and delivered by the Delaware Trustee, and under Delaware
law (excluding any securities laws) constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether considered in a proceeding in equity or at law);
(c) if it is not a natural person, the execution, delivery and performance of
this Declaration by the Delaware Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Delaware Trustee;
(d) it has trust power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Declaration;
(e) no consent, approval or authorization of, or registration with or notice to,
any state or federal banking authority governing the trust powers of the
Delaware Trustee is required for the execution, delivery or performance by the
Delaware Trustee of this Declaration; and
(f) the Delaware Trustee is a natural person who is a resident of the State of
Delaware or, if not a natural person, it is an entity which has its principal
place of business in the State of Delaware and, in either case, a Person that
satisfies for the Trust the requirements of Section 3807 of the Statutory Trust
Act.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Notices. All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied (which telecopy shall be followed by notice delivered or mailed by
first class mail) or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrators at the Trust's mailing
address set forth below (or such other address as the Trust may give notice of
to the Holders of the Securities):
MFBC Statutory Trust I
c/o MFB Corp.
4100 Edison Lakes Parkway, Suite 300
Mishawaka, Indiana 46546-0528
Attention: Charles J. Viater
Telecopy: 574-273-7801
(b) if given to the Delaware Trustee, at the Delaware Trustee's mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-1600
Attention: Corporate Trust Administration
Telecopy: 302-636-4140
(c) if given to the Institutional Trustee, at the Institutional Trustee's
mailing address set forth below (or such other address as the Institutional
Trustee may give notice of to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-1600
Attention: Corporate Trust Administration
Telecopy: 302-636-4140
(d) if given to the Holder of the Common Securities, at the mailing address of
the Sponsor set forth below (or such other address as the Holder of the Common
Securities may give notice of to the Trust):
MFB Corp.
4100 Edison Lakes Parkway, Suite 300
Mishawaka, Indiana 46546-0528
Attention: Charles J. Viater
Telecopy: 574-273-7801
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 13.2. Governing Law. This Declaration and the rights of the parties
hereunder shall be governed by and interpreted in accordance with the law of the
State of Delaware and all rights and remedies shall be governed by such laws
without regard to the principles of conflict of laws of the State of Delaware or
any other jurisdiction that would call for the application of the law of any
jurisdiction other than the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Declaration any
provision of the laws (statutory or common) of the State of Delaware pertaining
to trusts that relate to or regulate, in a manner inconsistent with the terms
hereof (a) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (b) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (c) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (d) fees or
other sums payable to trustees, officers, agents or employees of a trust, (e)
the allocation of receipts and expenditures to income or principal, or (f)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding or investing trust assets.
Section 13.3. Intention of the Parties. It is the intention of the parties
hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
Section 13.4. Headings. Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
Section 13.5. Successors and Assigns. Whenever in this Declaration any of the
parties hereto is named or referred to, the successors and assigns of such party
shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether or not so expressed.
Section 13.6. Partial Enforceability. If any provision of this Declaration, or
the application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Declaration, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
Section 13.7. Counterparts. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees and Administrators to any of
such counterpart signature pages. All of such counterpart signature pages shall
be read as though one, and they shall have the same force and effect as though
all of the signers had signed a single signature page.
Signatures appear on the following page
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:__/s/_Christopher J Monigle
Name: Christopher J Monigle
Title: Assistant Vice President
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: /s/ Christopher J Monigle
--------------------------------------------------
Name: Christopher J Monigle
Title: Assistant Vice President
MFB CORP., as Sponsor
By: /s/ Charles J Viater
--------------------------------------------------
Name: Charles J Viater
Title: President/CEO
ADMINISTRATORS OF MFBC STATUTORY TRUST I
By: /s/ Charles J Viater
--------------------------------------------------
Administrator
By: /s/ Terry L Clark
--------------------------------------------------
Administrator
I-13
1218504.1
MFB Corp./Amended and Restated Declaration of Trust
ANNEX I
TERMS OF SECURITIES
Pursuant to Section 6.1 of the Amended and Restated
Declaration of Trust, dated as of July 29, 2005 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration):
1. Designation and Number.
(a) 5,000 Fixed/Floating Rate Capital Securities of MFBC Statutory Trust I (the
"Trust"), with an aggregate stated liquidation amount with respect to the assets
of the Trust of five million dollars ($5,000,000.00) and a stated liquidation
amount with respect to the assets of the Trust of $1,000.00 per Capital
Security, are hereby designated for the purposes of identification only as the
"Capital Securities". The Capital Security Certificates evidencing the Capital
Securities shall be substantially in the form of Exhibit A-1 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
(b) 155 Fixed/Floating Rate Common Securities of the Trust (the "Common
Securities") will be evidenced by Common Security Certificates substantially in
the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.
2. Distributions.
(a) Distributions will be payable on each Security for the Distribution Period
beginning on (and including) the date of original issuance and ending on (but
excluding) the Distribution Payment Date in September 2010 at a rate per annum
of 6.22% and shall bear interest for each successive Distribution Period
beginning on (and including) the Distribution Payment Date in September 2010,
and each succeeding Distribution Payment Date, and ending on (but excluding) the
next succeeding Distribution Payment Date at a rate per annum equal to the
3-Month LIBOR, determined as described below, plus 1.70% (the "Coupon Rate"),
applied to the stated liquidation amount thereof, such rate being the rate of
interest payable on the Debentures to be held by the Institutional Trustee.
Distributions in arrears will bear interest thereon compounded quarterly at the
applicable Distribution Rate (to the extent permitted by law). Distributions, as
used herein, include cash distributions and any such compounded distributions
unless otherwise noted. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional Trustee
and to the extent the Institutional Trustee has funds available therefor. The
amount of the Distribution payable (i) for any Distribution Period commencing on
or after the date of original issuance but before the Distribution Payment Date
in September 2010 will be computed on the basis of a 360-day year of twelve
30-day months, and (ii) for the Distribution Period commencing on the
Distribution Payment Date in September 2010 and each succeeding Distribution
Period will be calculated by applying the Distribution Rate to the stated
liquidation amount outstanding at the commencement of the Distribution Period on
the basis of the actual number of days in the Distribution Period concerned
divided by 360. All percentages resulting from any calculations on the Capital
Securities 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)).
(b) Distributions on the Securities will be cumulative, will accrue from the
date of original issuance, and will be payable, subject to extension of
distribution payment periods as described herein, quarterly in arrears on March
15, June 15, September 15 and December 15 of each year, or if such day is not a
Business Day, then the next succeeding Business Day (each a "Distribution
Payment Date"), commencing on the Distribution Payment Date in September 2005
when, as and if available for payment. The Debenture Issuer has the right under
the Indenture to defer payments of interest on the Debentures, so long as no
Acceleration Event of Default has occurred and is continuing, by deferring the
payment of interest on the Debentures for up to 20 consecutive quarterly periods
(each an "Extension Period") at any time and from time to time, subject to the
conditions described below, during which Extension Period no interest shall be
due and payable. During any Extension Period, interest will continue to accrue
on the Debentures, and interest on such accrued interest will accrue at an
annual rate equal to the Distribution Rate in effect for each such Extension
Period, compounded quarterly from the date such interest would have been payable
were it not for the Extension Period, to the extent permitted by law (such
interest referred to herein as "Additional Interest"). No Extension Period may
end on a date other than a Distribution Payment Date. At the end of any such
Extension Period, the Debenture Issuer 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 and
provided further, however, that during any such Extension Period, the Debenture
Issuer and its Affiliates shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Debenture Issuer's or its Affiliates' capital stock
(other than payments of dividends or distributions to the Debenture Issuer) 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 Debenture Issuer 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 Debenture Issuer 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 Debenture Issuer (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 Debenture Issuer's capital stock (or
any capital stock of a subsidiary of the Debenture Issuer) for any class or
series of the Debenture Issuer's capital stock or of any class or series of the
Debenture Issuer's indebtedness for any class or series of the Debenture
Issuer's capital stock, (c) the purchase of fractional interests in shares of
the Debenture Issuer'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 Debenture Issuer 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 Debenture Issuer 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. During any Extension Period, Distributions on the Securities shall be
deferred for a period equal to the Extension Period. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates to Holders of the Securities as they appear on the
books and records of the Trust on the record date immediately preceding such
date. Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust's funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.
(c) Distributions on the Securities will be payable to the Holders thereof as
they appear on the books and records of the Trust on the relevant record dates.
The relevant record dates shall be fifteen days before the relevant Distribution
Payment Date. Distributions payable on any Securities that are not punctually
paid on any Distribution Payment Date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, as the case may be, when
due (taking into account any Extension Period), will cease to be payable to the
Person in whose name such Securities are registered on the relevant record date,
and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture.
(d) In the event that there is any money or other property held by or for the
Trust that is not accounted for hereunder, such property shall be distributed
Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution. In the event of the voluntary or
involuntary liquidation, dissolution, winding-up or termination of the Trust
(each a "Liquidation") other than in connection with a redemption of the
Debentures, the Holders of the Securities will be entitled to receive out of the
assets of the Trust available for distribution to Holders of the Securities,
after satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Debenture Issuer), distributions equal to the aggregate of the
stated liquidation amount of $1,000.00 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless in connection with such Liquidation, the Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Distribution Rate
of, and bearing accrued and unpaid interest in an amount equal to the accrued
and unpaid Distributions on, and having the same record date as, such
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with the Statutory Trust Act, shall be
distributed on a Pro Rata basis to the Holders of the Securities in exchange for
such Securities.
The Sponsor, as the Holder of all of the Common Securities, has the
right at any time to dissolve the Trust (including, without limitation, upon the
occurrence of a Special Event), subject to the receipt by the Debenture Issuer
of prior approval from the Board of Governors of the Federal Reserve System, or
its designated district bank, as applicable, and any successor federal agency
that is primarily responsible for regulating the activities of the Sponsor (the
"Federal Reserve"), if the Sponsor is a bank holding company, or from the Office
of Thrift Supervision and any successor federal agency that is primarily
responsible for regulating the activities of Sponsor, (the "OTS") if the Sponsor
is a savings and loan holding company, in either case if then required under
applicable capital guidelines or policies of the Federal Reserve or OTS, as
applicable, and, after satisfaction of liabilities to creditors of the Trust,
cause the Debentures to be distributed to the Holders of the Securities on a Pro
Rata basis in accordance with the aggregate stated liquidation amount thereof.
If a Liquidation of the Trust occurs as described in clause (i), (ii),
(iii) or (v) in Section 7.1(a) of the Declaration, the Trust shall be liquidated
by the Institutional Trustee as expeditiously as it determines to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust, to
the Holders of the Securities, the Debentures on a Pro Rata basis to the extent
not satisfied by the Debenture Issuer, unless such distribution is determined by
the Institutional Trustee not to be practical, in which event such Holders will
be entitled to receive out of the assets of the Trust available for distribution
to the Holders, after satisfaction of liabilities of creditors of the Trust to
the extent not satisfied by the Debenture Issuer, an amount equal to the
Liquidation Distribution. An early Liquidation of the Trust pursuant to clause
(iv) of Section 7.1(a) of the Declaration shall occur if the Institutional
Trustee determines that such Liquidation is possible by distributing, after
satisfaction of liabilities to creditors of the Trust, to the Holders of the
Securities on a Pro Rata basis, the Debentures, and such distribution occurs.
If, upon any such Liquidation the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on such Capital Securities shall be paid to the Holders of the Trust
Securities on a Pro Rata basis, except that if an Event of Default has occurred
and is continuing, the Capital Securities shall have a preference over the
Common Securities with regard to such distributions.
After the date for any distribution of the Debentures upon dissolution
of the Trust (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) upon surrender of a Holder's Securities certificate, such
Holder of the Securities will receive a certificate representing the Debentures
to be delivered upon such distribution, (iii) any certificates representing the
Securities still outstanding will be deemed to represent undivided beneficial
interests in such of the Debentures as have an aggregate principal amount equal
to the aggregate stated liquidation amount with an interest rate identical to
the Distribution Rate of, and bearing accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissuance (and
until such certificates are so surrendered, no payments of interest or principal
shall be made to Holders of Securities in respect of any payments due and
payable under the Debentures; provided, however that such failure to pay shall
not be deemed to be an Event of Default and shall not entitle the Holder to the
benefits of the Guarantee), and (iv) all rights of Holders of Securities under
the Declaration shall cease, except the right of such Holders to receive
Debentures upon surrender of certificates representing such Securities.
4. Redemption and Distribution.
(a) The Debentures will mature on September 15, 2035. The Debentures may be
redeemed by the Debenture Issuer, in whole or in part, at any Distribution
Payment Date on or after the Distribution Payment Date in September 2010, at the
Redemption Price. In addition, the Debentures may be redeemed by the Debenture
Issuer at the Special Redemption Price, in whole but not in part, at any
Distribution Payment Date, upon the occurrence and continuation of a Special
Event within 120 days following the occurrence of such Special Event at the
Special Redemption Price, upon not less than 30 nor more than 60 days' notice to
holders of such Debentures so long as such Special Event is continuing. In each
case, the right of the Debenture Issuer to redeem the Debentures is subject to
the Debenture Issuer having received prior approval from the Federal Reserve (if
the Debenture Issuer is a bank holding company) or prior approval from the OTS
(if the Debenture Issuer is a savings and loan holding company), in each case if
then required under applicable capital guidelines or policies of the applicable
federal agency. The Sponsor shall appoint a Quotation Agent, which shall be a
designee of the Institutional Trustee, for the purpose of performing the
services contemplated in or by reference in, the definition of Special
Redemption Price. Any error in the calculation of the Special Redemption Price
by the Quotation Agent or the Debenture Trustee may be corrected at any time by
notice delivered to the Sponsor and the holders of the Capital Securities.
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 the Special Redemption Price on the Debentures
or the Capital Securities by the Debenture Trustee, the Quotation Agent or the
Institutional Trustee, as the case may be, shall (in the absence of willful
default, bad faith or manifest error) be final, conclusive and binding on the
holders of the Debentures and the Capital Securities, the Trust and the Sponsor,
and no liability shall attach (except as provided above) to the Debenture
Trustee, the Quotation Agent or the Institutional Trustee in connection with the
exercise or non-exercise by any of them of their respective powers, duties and
discretion.
"3-Month LIBOR" means the London interbank offered interest rate for
three-month, U.S. dollar deposits determined by the Debenture Trustee in the
following order of priority:
(1) the rate (expressed as a percentage per annum) for U.S.
dollar deposits having a three-month maturity that appears on Telerate
Page 3750 as of 11:00 a.m. (London time) on the related Determination
Date (as defined below). "Telerate Page 3750" means the display
designated as "Page 3750" on the Moneyline 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. dollar deposits;
(2) if such rate cannot be identified on the related
Determination Date, the Debenture 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 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;
(3) if fewer than two such quotations are provided as
requested in clause (2) above, the Debenture 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 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; and
(4) if fewer than two such quotations are provided as
requested in clause (3) above, 3-Month LIBOR will be a 3-Month LIBOR
determined with respect to the Distribution Period immediately
preceding such current Distribution Period. If the rate for U.S. dollar
deposits having a three-month maturity that initially appears on
Telerate Page 3750 as of
11:00 a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 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.
The Distribution 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.
"Capital Treatment Event" means the receipt by the Debenture Issuer 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 Sponsor 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 Capital Securities 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 Sponsor (or if the Sponsor is not a bank holding
company, such guidelines applied to the Sponsor as if the Sponsor were subject
to such guidelines); provided, however, that the inability of the Sponsor to
treat all or any portion of the liquidation amount of the Capital Securities as
Tier l Capital shall not constitute the basis for a Capital Treatment Event, if
such inability results from the Sponsor 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.
"Comparable Treasury Issue" means with respect to any Special
Redemption Date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Fixed Rate Period Remaining Life
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the Fixed Rate Period Remaining Life. If no United
States Treasury security has a maturity which is within a period from 3 months
before to 3 months after the Distribution Payment Date in September 2010, the
two most closely corresponding United States Treasury securities as selected by
the Quotation Agent shall be used as the Comparable Treasury Issue, and the
Treasury Rate shall be interpolated and extrapolated on a straight-line basis,
rounding to the nearest month using such securities.
"Comparable Treasury Price" means (a) the average of 5 Reference
Treasury Dealer Quotations for such Special Redemption Date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (b) if the
Quotation Agent obtains fewer than 5 such Reference Treasury Dealer Quotations,
the average of all such Quotations.
"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.
"Fixed Rate Period Remaining Life" means, with respect to any
Debenture, the period from the Special Redemption Date for such Debenture to the
Distribution Payment Date in September 2010.
"Investment Company Event" means the receipt by the Debenture Issuer
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, within 90 days of the date of such opinion, will be considered
an Investment Company that is required to be registered under the Investment
Company Act 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.
"Maturity Date" means September 15, 2035.
"Primary Treasury Dealer" shall mean either a primary United States
Government securities dealer or an entity of nationally recognized standing in
matters pertaining to the quotation of treasury securities that is reasonably
acceptable to the Sponsor and the Institutional Trustee.
"Quotation Agent" means a designee of the Institutional Trustee who
shall be a Primary Treasury Dealer.
"Redemption Date" shall mean the date fixed for the redemption of
Capital Securities, which shall be any Distribution Payment Date on or after the
Distribution Payment Date in September 2010.
"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.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Debenture Issuer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Special Redemption Date, the average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Debenture Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
"Special Event" means a Tax Event, an Investment Company Event or a
Capital Treatment Event.
"Special Redemption Date" means a date on which a Special Event
redemption occurs, which shall be a Distribution Payment Date.
"Special Redemption Price" means (a) if the Special Redemption Date
occurs before the Distribution Payment Date in September 2010, the greater of
(i) 107.5% of the principal amount of the Debentures, plus accrued and unpaid
Interest on the Debentures to the Special Redemption Date, or (ii) as determined
by the Quotation Agent, (A) the sum of the present values of the scheduled
payments of principal and Interest on the Debentures during the Fixed Rate
Period Remaining Life of the Debentures (assuming the Debentures matured on
September 15, 2010) discounted to the Special Redemption Date on a quarterly
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate, plus (B) accrued and unpaid Interest on the Debentures to such
Special Redemption Date, or (b) if the Special Redemption Date occurs on or
after the Distribution Payment Date in September 2010, 100% of the principal
amount of the Debentures being redeemed, plus accrued and unpaid Interest on
such Debentures to the Special Redemption Date.
"Tax Event" means the receipt by the Debenture Issuer 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 Debenture Issuer 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 Debenture Issuer on the Debentures is not, or within 90 days of the date
of such opinion, will not be, deductible by the Debenture Issuer, 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.
"Treasury Rate" means (i) the yield, under the heading which represents
the average for the week immediately prior to the date of calculation, appearing
in the most recently published statistical release designated H.15 (519) or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Fixed Rate Period Remaining Life (if no maturity
is within three months before or after the Fixed Rate Period Remaining Life,
yields for the two published maturities most closely corresponding to the Fixed
Rate Period Remaining Life shall be determined and the Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Special Redemption Date. The
Treasury Rate shall be calculated by the Quotation Agent on the third Business
Day preceding the Special Redemption Date.
(b) Upon the repayment in full at maturity or redemption in whole or in
part of the Debentures (other than following the distribution of the
Debentures to the Holders of the Securities), the proceeds from such
repayment or payment shall concurrently be applied to redeem Pro Rata
at the applicable Redemption Price or Special Redemption Price, as
applicable, Securities having an aggregate liquidation amount equal to
the aggregate principal amount of the Debentures so repaid or redeemed;
provided, however, that holders of such Securities shall be given not
less than 30 nor more than 60 days' notice of such redemption (other
than at the scheduled maturity of the Debentures).
(c) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Capital Securities will be redeemed Pro Rata
and the Capital Securities to be redeemed will be redeemed Pro Rata
from each Holder of Capital Securities.
(d) The Trust may not redeem fewer than all the outstanding Capital
Securities unless all accrued and unpaid Distributions have been paid
on all Capital Securities for all quarterly Distribution periods
terminating on or before the date of redemption.
(e) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution of
the Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail to
each Holder of Securities to be redeemed or exchanged
not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures.
For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are
given pursuant to this paragraph 4(e)(i), a
Redemption/Distribution Notice shall be deemed to be given on the da
such notice is first mailed by first-class mail,
postage prepaid, to Holders of such Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
such Securities at the address of each such Holder appearing
on the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing thereof with
respect to any Holder shall affect the validity of the
redemption or exchange proceedings with respect to any other Holder.
(ii) If the Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued
if the Debentures are redeemed as set out in this paragraph 4 (
which notice will be irrevocable), then, provided that the
Institutional Trustee has a sufficient amount of cash in connection
with the related redemption or maturity of the
Debentures, the Institutional Trustee will pay the relevant Redemption
Price or Special Redemption Price, as applicable, to
the Holders of such Securities by check mailed to the address of each
such Holder appearing on the books and records of the
Trust on the Redemption Date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required
then immediately prior to the close of business on the date of such
deposit Distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the applicable
Redemption Price or Special Redemption Price specified
in paragraph 4(a), but without interest on such Redemption Price or
Special Redemption Price. If payment of the Redemption
Price or Special Redemption Price in respect of any Securities is
improperly withheld or refused and not paid either by the
Trust or by the Debenture Issuer as guarantor pursuant to the
Guarantee, Distributions on such Securities will continue to
accrue at the Distribution Rate from the original Redemption Date to
the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price or Special
Redemption Price. In the event of any redemption of the Capital
Securities issued by the Trust in part, the Trust shall not
be required to (i) issue, register the transfer of or exchange any
Security during a period beginning at the opening of
business fifteen days before any selection for redemption of the
Capital Securities and ending at the close of business on
the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of the Capital
Securities to be so redeemed or (ii) register the transfer of or
exchange any Capital Securities so selected for redemption,
in whole or in part, except for the unredeemed portion of any Capital
Securities being redeemed in part.
(iii) Redemption/Distribution Notices shall be sent by the Administrators on
behalf of the Trust to (A) in respect of the Capital Securities, the
Holders thereof and (B) in respect of the Common Securities, the Holder
thereof.
(iv) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), and provided that
the acquiror is not the Holder of the Common Securities or the obligor
under the Indenture, the Sponsor or any of its subsidiaries may at any
time and from time to time purchase outstanding Capital Securities by
tender, in the open market or by private agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights. The Administrators are required
to call a meeting of the Holders of the Capital Securities if directed
to do so by Holders of at least 10% in liquidation amount of the
Capital Securities.
(b) Subject to the requirements of obtaining a tax opinion by the
Institutional Trustee in certain circumstances set forth in the last
sentence of this paragraph, the Holders of a Majority in liquidation
amount of the Capital Securities, voting separately as a class, have
the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or
exercising any trust or power conferred upon the Institutional Trustee
under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii)
waive any past default that is waivable under the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable or (iv) consent on
behalf of all the Holders of the Capital Securities to any amendment,
modification or termination of the Indenture or the Debentures where
such consent shall be required; provided, however, that, where a
consent or action under the Indenture would require the consent or act
of the holders of greater than a simple majority in aggregate principal
amount of Debentures (a "Super Majority") affected thereby, the
Institutional Trustee may only give such consent or take such action at
the written direction of the Holders of at least the proportion in
liquidation amount of the Capital Securities outstanding which the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding. If the Institutional Trustee fails to
enforce its rights under the Debentures after the Holders of a Majority
in liquidation amount of such Capital Securities have so directed the
Institutional Trustee, to the fullest extent permitted by law, a Holder
of the Capital Securities may institute a legal proceeding directly
against the Debenture Issuer to enforce the Institutional Trustee's
rights under the Debentures without first instituting any legal
proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the
Debentures on the date the interest or principal is payable (or in the
case of redemption, the Redemption Date or the Special Redemption Date,
as applicable), then a Holder of record of the Capital Securities may
directly institute a proceeding for enforcement of payment, on or after
the respective due dates specified in the Debentures, to such Holder
directly of the principal of or interest on the Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of
the Capital Securities of such Holder. The Institutional Trustee shall
notify all Holders of the Capital Securities of any default actually
known to the Institutional Trustee with respect to the Debentures
unless (x) such default has been cured prior to the giving of such
notice or (y) the Institutional Trustee determines in good faith that
the withholding of such notice is in the interest of the Holders of
such Capital Securities, except where the default relates to the
payment of principal of or interest on any of the Debentures. Such
notice shall state that such Indenture Event of Default also
constitutes an Event of Default hereunder. Except with respect to
directing the time, method and place of conducting a proceeding for a
remedy, the Institutional Trustee shall not take any of the actions
described in clauses (i), (ii) or (iii) above unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that, as a
result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of
the Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture, the Institutional Trustee shall
request the direction of the Holders of the Securities with respect to such
amendment, modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class; provided, however,
that where a consent under the Indenture would require the consent of a
Super-Majority, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of the
Securities outstanding which the relevant Super-Majority represents of the
aggregate principal amount of the Debentures outstanding. The Institutional
Trustee shall not take any such action in accordance with the directions of the
Holders of the Securities unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that, as a result of such action, the Trust
will not be classified as other than a grantor trust for United States federal
income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Event of Default hereunder. Any required approval or direction
of Holders of the Capital Securities may be given at a separate meeting of
Holders of the Capital Securities convened for such purpose, at a meeting of all
of the Holders of the Securities in the Trust or pursuant to written consent.
The Institutional Trustee will cause a notice of any meeting at which Holders of
the Capital Securities are entitled to vote, or of any matter upon which action
by written consent of such Holders is to be taken, to be mailed to each Holder
of record of the Capital Securities. Each such notice will include a statement
setting forth the following information (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the Holders of
the Capital Securities will be required for the Trust to redeem and cancel
Capital Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not entitle the Holder thereof to vote or consent and shall, for purposes
of such vote or consent, be treated as if such Capital Securities were not
outstanding.
In no event will Holders of the Capital Securities have the right to
vote to appoint, remove or replace the Administrators, which voting rights are
vested exclusively in the Sponsor as the Holder of all of the Common Securities
of the Trust. Under certain circumstances as more fully described in the
Declaration, Holders of Capital Securities have the right to vote to appoint,
remove or replace the Institutional Trustee and the Delaware Trustee.
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), 6(c) and 7 and as otherwise
required by law and the Declaration, the Common Securities will have no voting
rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article IV of the Declaration, to vote to appoint, remove or replace any
Administrators.
(c) Subject to Section 6.7 of the Declaration and only after each Event of
Default (if any) with respect to the Capital Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waiving any past default and its
consequences that is waivable under the Indenture, or (iii) exercising any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable; provided, however, that, where a consent or action under the
Indenture would require a Super Majority, the Institutional Trustee may only
give such consent or take such action at the written direction of the Holders of
at least the proportion in liquidation amount of the Common Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. Notwithstanding this paragraph 6(c), the Institutional
Trustee shall not revoke any action previously authorized or approved by a vote
or consent of the Holders of the Capital Securities. Other than with respect to
directing the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action described in (i),
(ii) or (iii) above, unless the Institutional Trustee has obtained an opinion of
tax counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights, to the
fullest extent permitted by law, under the Declaration, any Holder of the Common
Securities may institute a legal proceeding directly against any Person to
enforce the Institutional Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Institutional Trustee or any other
Person.
Any approval or direction of Holders of the Common Securities may be
given at a separate meeting of Holders of the Common Securities convened for
such purpose, at a meeting of all of the Holders of the Securities in the Trust
or pursuant to written consent. The Administrators will cause a notice of any
meeting at which Holders of the Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of the Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 11.1 of the Declaration, if
any proposed amendment to the Declaration provides for, or the Trustees, Sponsor
or Administrators otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
Liquidation of the Trust, other than as described in Section 7.1 of the
Declaration, then the Holders of outstanding Securities, voting together as a
single class, will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in liquidation amount of the Securities, affected
thereby; provided, however, if any amendment or proposal referred to in clause
(i) above would adversely affect only the Capital Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification, or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
a Super Majority, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
(c) Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Institutional Trustee or (iii) cause the Trust to be deemed an Investment
Company which is required to be registered under the Investment Company Act.
(d) Notwithstanding any provision of the Declaration, the right of any Holder of
the Capital Securities to receive payment of distributions and other payments
upon redemption or otherwise, on or after their respective due dates, or to
institute a suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder. For the protection and enforcement of the foregoing provision, each and
every Holder of the Capital Securities shall be entitled to such relief as can
be given either at law or equity.
8. Pro Rata. A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of the Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities then outstanding unless, in relation to a payment, an
Event of Default has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities Pro Rata according to the aggregate liquidation amount of the Capital
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of the
Common Securities Pro Rata according to the aggregate liquidation amount of the
Common Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Common Securities outstanding.
9. Ranking. The Capital Securities rank pari passu with and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event of
Default has occurred and is continuing, the rights of Holders of the Common
Securities to receive payment of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights of the Holders of the
Capital Securities with the result that no payment of any Distribution on, or
Redemption Price (or Special Redemption Price) of, any Common Security, and no
other payment on account of redemption, liquidation or other acquisition of
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all outstanding Capital Securities for
all distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price (or Special Redemption Price) the full amount of
such Redemption Price (or Special Redemption Price) on all outstanding Capital
Securities then called for redemption, shall have been made or provided for, and
all funds immediately available to the Institutional Trustee shall first be
applied to the payment in full in cash of all Distributions on, or the
Redemption Price (or Special Redemption Price) of, the Capital Securities then
due and payable.
10. Acceptance of Guarantee and Indenture. Each Holder of the Capital Securities
and the Common Securities, by the acceptance of such Securities, agrees to the
provisions of the Guarantee, including the subordination provisions therein and
to the provisions of the Indenture.
11. No Preemptive Rights. The Holders of the Securities shall have no preemptive
or similar rights to subscribe for any additional securities.
12. Miscellaneous. These terms constitute a part of the Declaration. The Sponsor
will provide a copy of the Declaration, the Guarantee, and the Indenture to a
Holder without charge on written request to the Sponsor at its principal place
of business.
A-1-7
1218504.1
MFB Corp./Amended and Restated Declaration of Trust
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
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 SPONSOR OR THE TRUST, (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 CAPITAL 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 SPONSOR'S AND
THE TRUST'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 EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY
OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. HEDGING TRANSACTIONS
INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
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 A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100 SECURITIES) AND
MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SECURITIES
IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00 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 DECLARATION TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
Certificate Number P-1..... 5,000 Capital Securities
[CUSIP NO.[_______] **To be inserted at the request of a subsequent transferee]
July 29, 2005
Certificate Evidencing Fixed/Floating Rate Capital Securities
of
MFBC Statutory Trust I
(liquidation amount $1,000.00 per Capital Security)
MFBC Statutory Trust I, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that First Tennessee Bank
National Association is the registered owner of capital securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
(liquidation amount $1,000.00 per capital security) (the "Capital Securities").
Subject to the Declaration (as defined below), the Capital Securities are
transferable on the books and records of the Trust in person or by a duly
authorized attorney, upon surrender of this Certificate duly endorsed and in
proper form for transfer. The Capital Securities represented hereby are issued
pursuant to, and the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Capital Securities shall in all respects
be subject to, the provisions of the Amended and Restated Declaration of Trust
of the Trust dated as of July 29, 2005, among Charles J. Viater and Terry Clark,
as Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington
Trust Company, as Institutional Trustee, MFB Corp., as Sponsor, and the holders
from time to time of undivided beneficial interests in the assets of the Trust,
including the designation of the terms of the Capital Securities as set forth in
Annex I to such amended and restated declaration as the same may be amended from
time to time (the "Declaration"). Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled to
the benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee, and the Indenture to the
Holder without charge upon written request to the Sponsor at its principal place
of business.
Upon receipt of this Security, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of beneficial ownership in the Debentures.
This Capital Security is governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to principles of conflict of
laws.
Signatures appear on following page
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
MFBC STATUTORY TRUST I
By:
-----------------------------------------------------------
Name:
Title: Administrator
CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
WILMINGTON TRUST COMPANY,
as the Institutional Trustee
By:
-----------------------------------------------------------
Authorized Officer
[FORM OF REVERSE OF CAPITAL SECURITY]
Distributions payable on each Capital Security will be payable at an
annual rate equal to 6.22% beginning on (and including) the date of original
issuance and ending on (but excluding) the Distribution Payment Date in
September 2010 and at an annual rate for each successive period beginning on
(and including) the Distribution Payment Date in September 2010, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each a "Distribution Period"), equal to
3-Month LIBOR, determined as described below, plus 1.70% (the "Coupon Rate"),
applied to the stated liquidation amount of $1,000.00 per Capital Security, such
rate being the rate of interest payable on the Debentures to be held by the
Institutional Trustee. Distributions in arrears will bear interest thereon
compounded quarterly at the Distribution Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes cash
distributions and any such compounded distributions unless otherwise noted. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. As used herein,
"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 commencement of the relevant Distribution
Period. The amount of the Distribution payable (i) for any Distribution Period
commencing on or after the date of original issuance but before the Distribution
Payment Date in September 2010 will be computed on the basis of a 360-day year
of twelve 30-day months, and (ii) for the Distribution Period commencing on the
Distribution Payment Date in September 2010 and each succeeding Distribution
Period will be calculated by applying the Distribution Rate to the stated
liquidation amount outstanding at the commencement of the Distribution Period on
the basis of the actual number of days in the Distribution Period concerned
divided by 360.
"3-Month LIBOR" as used herein, means the London interbank offered
interest rate for three-month U.S. dollar deposits determined by the Debenture
Trustee in the following order of priority: (i) the rate (expressed as a
percentage per annum) for U.S. dollar deposits having a three-month maturity
that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date ("Telerate Page 3750" means the display designated as "Page
3750" on the Moneyline 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. dollar deposits); (ii) if
such rate cannot be identified on the related Determination Date, the Debenture
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 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; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture 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 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; and (iv) if fewer than two such quotations
are provided as requested in clause (iii) above, 3-Month LIBOR will be a 3-Month
LIBOR determined with respect to the Distribution Period immediately preceding
such current Distribution Period. If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 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.
The Distribution 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 Capital
Securities 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)).
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year or if any such day is not a Business Day, then the next
succeeding Business Day (each such day, a "Distribution Payment Date"),
commencing on the Distribution Payment Date in September 2005. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures, so long as no Acceleration Event of Default has occurred and is
continuing, by extending the interest payment period for up to 20 consecutive
quarterly periods (each an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below, during which
Extension Period no interest shall be due and payable. During any Extension
Period, interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate in
effect for each such Extension Period, compounded quarterly from the date such
interest would have been payable were it not for the Extension Period, to the
extent permitted by law (such interest referred to herein as "Additional
Interest"). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
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. Prior to the termination of any Extension
Period, the Debenture Issuer 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 Debenture Issuer
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. During any Extension Period, Distributions on the Capital
Securities shall be deferred for a period equal to the Extension Period. If
Distributions are deferred, the Distributions due shall be paid on the date that
the related Extension Period terminates, to Holders of the Securities as they
appear on the books and records of the Trust on the record date immediately
preceding such date. Distributions on the Securities must be paid on the dates
payable (after giving effect to any Extension Period) to the extent that the
Trust has funds available for the payment of such distributions in the Property
Account of the Trust. The Trust's funds available for Distribution to the
Holders of the Securities will be limited to payments received from the
Debenture Issuer. The payment of Distributions out of moneys held by the Trust
is guaranteed by the Guarantor pursuant to the Guarantee.
The Capital Securities shall be redeemable as provided in the
Declaration.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security Certificate to:
(Insert assignee's social security or tax identification number)
-----------------------
(Insert address and zip code of assignee) and irrevocably appoints
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
---------------------------------------
Signature:
----------------------------------
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee:1
A-2-5
1218504.1
MFB Corp./Amended and Restated Declaration of Trust
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH SECTION 8.1 OF
THE DECLARATION.
Certificate Number C-1 155 Common Securities
July 29, 2005
Certificate Evidencing Fixed/Floating Rate Common Securities
of
MFBC Statutory Trust I
MFBC Statutory Trust I, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that MFB Corp. (the "Holder")
is the registered owner of common securities of the Trust representing undivided
beneficial interests in the assets of the Trust (the "Common Securities"). The
Common Securities represented hereby are issued pursuant to, and the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of July 29, 2005, among Charles J. Viater and Terry Clark, as Administrators,
Wilmington Trust Company, as Delaware Trustee, Wilmington Trust Company, as
Institutional Trustee, MFB Corp., as Sponsor, and the holders from time to time
of undivided beneficial interest in the assets of the Trust including the
designation of the terms of the Common Securities as set forth in Annex I to
such amended and restated declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to the Holder
without charge upon written request to the Sponsor at its principal place of
business.
As set forth in the Declaration, when an Event of Default has occurred
and is continuing, the rights of Holders of Common Securities to payment in
respect of Distributions and payments upon Liquidation, redemption or otherwise
are subordinated to the rights of payment of Holders of the Capital Securities.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
This Common Security is governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to principles of conflict of
laws.
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
MFBC STATUTORY TRUST I
By:
-----------------------------------------------------------
Name:
Title: Administrator
[FORM OF REVERSE OF COMMON SECURITY]
Distributions payable on each Common Security will be payable at an
annual rate equal to 6.22% beginning on (and including) the date of original
issuance and ending on (but excluding) the Distribution Payment Date in
September 2010 and at an annual rate for each successive period beginning on
(and including) the Distribution Payment Date in September 2010, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date (each a "Distribution Period"), equal to
3-Month LIBOR, determined as described below, plus 1.70% (the "Coupon Rate"),
applied to the stated liquidation amount of $1,000.00 per Common Security, such
rate being the rate of interest payable on the Debentures to be held by the
Institutional Trustee. Distributions in arrears will bear interest thereon
compounded quarterly at the Distribution Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes cash
distributions and any such compounded distributions unless otherwise noted. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. As used herein,
"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 commencement of the relevant Distribution
Period. The amount of the Distribution payable (i) for any Distribution Period
commencing on or after the date of original issuance but before the Distribution
Payment Date in September 2010 will be computed on the basis of a 360-day year
of twelve 30-day months, and (ii) for the Distribution Period commencing on the
Distribution Payment Date in September 2010 and each succeeding Distribution
Period will be calculated by applying the Distribution Rate to the stated
liquidation amount outstanding at the commencement of the Distribution Period on
the basis of the actual number of days in the Distribution Period concerned
divided by 360.
"3-Month LIBOR" as used herein, means the London interbank offered
interest rate for three-month U.S. dollar deposits determined by the Debenture
Trustee in the following order of priority: (i) the rate (expressed as a
percentage per annum) for U.S. dollar deposits having a three-month maturity
that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date ("Telerate Page 3750" means the display designated as "Page
3750" on the Moneyline 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. dollar deposits); (ii) if
such rate cannot be identified on the related Determination Date, the Debenture
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 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; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture 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 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; and (iv) if fewer than two such quotations
are provided as requested in clause (iii) above, 3-Month LIBOR will be a 3-Month
LIBOR determined with respect to the Distribution Period immediately preceding
such current Distribution Period. If the rate for U.S. dollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 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.
The Distribution 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 Common
Securities 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)).
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year or if any such day is not a Business Day, then the next
succeeding Business Day (each such day, a "Distribution Payment Date"),
commencing on the Distribution Payment Date in September 2005. The Debenture
Issuer has the right under the Indenture to defer payments of interest on the
Debentures, so long as no Acceleration Event of Default has occurred and is
continuing, by extending the interest payment period for up to 20 consecutive
quarterly periods (each an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below, during which
Extension Period no interest shall be due and payable. During any Extension
Period, interest will continue to accrue on the Debentures, and interest on such
accrued interest will accrue at an annual rate equal to the Distribution Rate in
effect for each such Extension Period, compounded quarterly from the date such
interest would have been payable were it not for the Extension Period, to the
extent permitted by law (such interest referred to herein as "Additional
Interest"). No Extension Period may end on a date other than a Distribution
Payment Date. At the end of any such Extension Period, the Debenture Issuer
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. Prior to the termination of any Extension
Period, the Debenture Issuer 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 Debenture Issuer
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. During any Extension Period, Distributions on the Common
Securities shall be deferred for a period equal to the Extension Period. If
Distributions are deferred, the Distributions due shall be paid on the date that
the related Extension Period terminates, to Holders of the Securities as they
appear on the books and records of the Trust on the record date immediately
preceding such date. Distributions on the Securities must be paid on the dates
payable (after giving effect to any Extension Period) to the extent that the
Trust has funds available for the payment of such distributions in the Property
Account of the Trust. The Trust's funds available for Distribution to the
Holders of the Securities will be limited to payments received from the
Debenture Issuer.
The Common Securities shall be redeemable as provided in the
Declaration.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
(Insert assignee's social security or tax identification number)
------------------------
(Insert address and zip code of assignee) and irrevocably appoints
agent to transfer this
Common Security Certificate on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
------------------------------------------------
Signature:
-------------------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature:
-------------------------------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee2
B-1
1218504.1
MFB Corp./Amended and Restated Declaration of Trust
EXHIBIT B
SPECIMEN OF INITIAL DEBENTURE
(See Document No. 17)
C-1
1218504.1
MFB Corp./Amended and Restated Declaration of Trust
EXHIBIT C
PLACEMENT AGREEMENT
(See Document No. 1)
1 Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
2 Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union, meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.