EXHIBIT 1.3
AMENDED AND RESTATED DECLARATION
OF TRUST
BY AND AMONG
WILMINGTON TRUST COMPANY,
AS DELAWARE TRUSTEE,
WILMINGTON TRUST COMPANY,
AS INSTITUTIONAL TRUSTEE,
PSB HOLDINGS, INC.,
AS SPONSOR,
AND
SCOTT M. CATTANACH, DAVID A. SVACINA AND
DAVID K. KOPPERUD,
AS ADMINISTRATORS,
DATED AS OF JUNE 28, 2005
TABLE OF CONTENTS
Page
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
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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
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
PSB HOLDINGS STATUTORY TRUST I
JUNE 28, 2005
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of June 28, 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 PSB
Holdings 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
June 21, 2005 (the "Original Declaration"), and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on June 21, 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 ;
(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
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(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 Scott M. Cattanach, David A. Svacina and
David K. Kopperud, 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 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.
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"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 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 PSB Holdings, Inc., a Wisconsin corporation, in
its capacity as issuer of the Debentures under the Indenture.
"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 .
"Distribution" means a distribution payable to Holders of Securities in
accordance with .
"Distribution Payment Date" has the meaning set forth in paragraph 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.
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"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 [RATE]%, 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 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 .
"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.
"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.
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"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 .
"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 .
"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.
5
"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 (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
of Annex I.
"Redemption Price" has the meaning set forth in paragraph 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 .
"Relevant Trustee" has the meaning set forth in .
"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 .
"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 of Annex I.
"Special Redemption Date" has the meaning set forth in paragraph of
Annex I.
"Special Redemption Price" has the meaning set forth in paragraph of
Annex I.
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"Sponsor" means PSB Holdings, Inc., a Wisconsin 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. {section}{section} 3801, et seq. as may be amended from time to
time.
"Successor Entity" has the meaning set forth in .
"Successor Delaware Trustee" has the meaning set forth in .
"Successor Institutional Trustee" has the meaning set forth in .
"Successor Securities" has the meaning set forth in .
"Super Majority" has the meaning set forth in paragraph of Annex I.
"Tax Event" has the meaning set forth in paragraph 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 .
"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.
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ARTICLE II
ORGANIZATION
SECTION 2.1.NAME.
The Trust is named "PSB Holdings 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 , to perform those
duties assigned to the Administrators.
SECTION 2.5.TITLE TO PROPERTY OF THE TRUST.
Except as provided in 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:
8
(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;
9
(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
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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 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
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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.
(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,
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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 .
(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.
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SECTION 2.9.CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEES AND
ADMINISTRATORS.
(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 ), 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 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;
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(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;
15
(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 shall be taken to relieve the Institutional
Trustee, subject to , 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;
16
(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 , 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 , the Delaware Trustee shall be a Trustee for the sole and
limited purpose of fulfilling the requirements of {section} 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 and 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
17
(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 to such transaction have
been satisfied.
(c) Notwithstanding , 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
18
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
19
"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 hereto.
ARTICLE IV
INSTITUTIONAL TRUSTEE AND ADMINISTRATORS
SECTION 4.1.NUMBER OF TRUSTEES.
The number of Trustees shall initially be two, and;
(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 ; 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 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
section 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
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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 , 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 , the Institutional Trustee shall immediately resign in the
manner and with the effect set forth in .
(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 Scott M. Cattanach, David A. Svacina and David K.
Kopperud. 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 , 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 . 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
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(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 . 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 (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.
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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 , 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 , 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
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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 .
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.
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(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
25
(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 , 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 , 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:
26
(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 .
(c) Except as otherwise provided in paragraphs (a) and (b) of this , 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.
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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(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 , 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.
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(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 . 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 (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.
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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
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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:
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(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
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(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 , 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 (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
33
investigative action, suit or proceeding referred to in paragraphs (a) and (b)
of this 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 , 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 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 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 .
(i) For purposes of this , 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
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 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.
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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
35
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
36
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 (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 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;
37
(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.
(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
38
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;
39
(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):
PSB Holdings Statutory Trust I
c/o PSB Holdings, Inc.
1905 West Stewart Avenue
Wausau, Wisconsin 54402
Attention: Scott M. Cattanach
Telecopy: 715-842-3418
(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
40
(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):
PSB Holdings, Inc.
1905 West Stewart Avenue
Wausau, Wisconsin 54402
Attention: Scott M. Cattanach
Telecopy: 715-842-3418
(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.
41
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
42
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:__________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:
Name:
Title:
PSB HOLDINGS, INC., as Sponsor
By:
Name:
Title:
ADMINISTRATORS OF PSB HOLDINGS STATUTORY
TRUST I
By:
Administrator
By:
Administrator
By:
Administrator
43
ANNEX I
TERMS OF SECURITIES
Pursuant to of the Amended and Restated Declaration of Trust,
dated as of June 28, 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)7,500 Fixed/Floating Rate Capital Securities of PSB Holdings
Statutory Trust I (the "Trust"), with an aggregate stated liquidation amount
with respect to the assets of the Trust of seven million five hundred thousand
dollars ($7,500,000.00) 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)232 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 [RATE]% 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)).
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(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
I-2
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 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
I-3
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 ebenture Issuer, an amount equal
to the Liquidation Distribution. An early Liquidation of the Trust pursuant to
clause (iv) of 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.
1. 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
I-4
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
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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.
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"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 June 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.
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"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.
(a)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).
(b)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.
(c)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.
(d)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 , a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is first mailed by first-class
mail, postage prepaid, to 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
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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
I-9
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
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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 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
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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
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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.
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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
A-1-1
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 7,500 Capital Securities
[CUSIP NO. [_______] **To be inserted at the request of a subsequent
transferee]
June 28, 2005
Certificate Evidencing Fixed/Floating Rate Capital Securities
of
PSB Holdings Statutory Trust I
(liquidation amount $1,000.00 per Capital Security)
PSB Holdings 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 June 28, 2005, among Scott M. Cattanach, David A.
Svacina and David K. Kopperud, as Administrators, Wilmington Trust Company, as
Delaware Trustee, Wilmington Trust Company, as Institutional Trustee, PSB
Holdings, Inc., 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.
A-1-2
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
A-1-3
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
PSB HOLDINGS 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 [RATE]% 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.
A-1-5
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.
A-1-6
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:*
*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.
A-1-7
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-1 232 Common Securities
June 28, 2005
Certificate Evidencing Fixed/Floating Rate Common Securities
of
PSB Holdings Statutory Trust I
PSB Holdings Statutory Trust I, a statutory trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that PSB Holdings,
Inc. (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 June 28, 2005, among Scott M. Cattanach, David A.
Svacina and David K. Kopperud, as Administrators, Wilmington Trust Company, as
Delaware Trustee, Wilmington Trust Company, as Institutional Trustee, PSB
Holdings, Inc., 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.
A-2-1
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
PSB HOLDINGS STATUTORY TRUST I
By:
Name:
Title: Administrator
A-2-2
[FORM OF REVERSE OF COMMON SECURITY]
Distributions payable on each Common Security will be payable at an
annual rate equal to [RATE]% 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.
A-2-3
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.
A-2-4
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 Guarantee*
*Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union, meeting the
requirements of the 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.
A-2-5
EXHIBIT B
SPECIMEN OF INITIAL DEBENTURE
(See Document No. 17)
EXHIBIT C
PLACEMENT AGREEMENT
(See Document No. 1)