SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 14, 1999
NORTH COUNTRY FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
Michigan 0-20167 38-2062816
(State or other Jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
130 South Cedar Street, Manistique, Michigan 49854
(Address of Principal Executive Offices) (Zip Code)
(906) 341-8401
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On May 14, 1999, North Country Capital Trust, a trust subsidiary of North
Country Financial Corporation, completed a private placement of 12,450 capital
securities with a liquidation preference of $1,000 per capital security. The
proceeds of the offering were loaned to North Country Financial Corporation in
exchange for subordinated debentures of North Country Financial Corporation with
terms that are similar to the capital securities. Distributions on the capital
securities are payable quarterly at a floating rate equal to LIBOR plus 2.50% of
the liquidation preference and will be included in interest expense on the
consolidated financial statements.
The capital securities are subject to mandatory redemption at the
liquidation preference amount, in whole or in part, upon repayment of the
subordinated debentures at maturity or their earlier redemption. North Country
Financial Corporation has the option to defer distributions on the subordinated
debentures from time to time for a period not to exceed 20 consecutive quarters.
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Item 7. Exhibits.
c) Exhibits.
10.1 Purchase Terms Agreement dated as of May 7, 1999, by and
between First Tennessee Capital Markets and North Country
Capital Trust.
10.2 Certificate of Trust of North Country Capital Trust.
10.3 Capital Securities Certificate P-1 dated May 14, 1999.
10.4 Capital Securities Certificate P-2 dated May 14, 1999.
10.5 Junior Subordinated Debenture of North Country Financial
Corporation dated May 14, 1999.
10.6 Amended and Restated Trust Agreement dated as of May 14,
1999, by and among North Country Capital Trust, Wilmington
Trust Company and the Administrative Trustees.
10.7 Indenture Agreement dated as of May 14, 1999, by and among
North Country Financial Corporation and Wilmington Trust
Company.
10.8 Guarantee Agreement dated as of May 14, 1999, by and among
North Country Financial Corporation and Wilmington Trust
Company.
10.9 Expense Agreement dated as of May 14, 1999, by and among
North Country Financial Corporation and North Country
Capital Trust.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
NORTH COUNTRY FINANCIAL CORPORATION
By /s/ Sherry L. Littlejohn
Sherry L. Littlejohn
Executive Vice President
Date: June 21, 1999
::ODMA\PCDOCS\GRR\297387\1
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EXHIBIT INDEX
10.1 Purchase Terms Agreement dated as of May 7, 1999, by and between
First Tennessee Capital Markets and North Country Capital Trust.
10.2 Certificate of Trust of North Country Capital Trust.
10.3 Capital Securities Certificate P-1 dated May 14, 1999.
10.4 Capital Securities Certificate P-2 dated May 14, 1999.
10.5 Junior Subordinated Debenture of North Country Financial
Corporation dated May 14, 1999.
10.6 Amended and Restated Trust Agreement dated as of May 14, 1999, by
and among North Country Capital Trust, Wilmington Trust Company
and the Administrative Trustees.
10.7 Indenture Agreement dated as of May 14, 1999, by and among North
Country Financial Corporation and Wilmington Trust Company.
10.8 Guarantee Agreement dated as of May 14, 1999, by and among North
Country Financial Corporation and Wilmington Trust Company.
10.9 Expense Agreement dated as of May 14, 1999, by and among North
Country Financial Corporation and North Country Capital Trust.
EXHIBIT 10.1
NORTH COUNTRY CAPITAL TRUST
MINIMUM OFFERING: 10,000 Capital Securities
MAXIMUM OFFERING: 15,000 Capital Securities
Floating Rate Capital Securities
(Liquidation Amount $1,000.00 per Capital Security)
PURCHASE TERMS AGREEMENT
--------------------
May 7, 1999
First Tennessee Capital Markets
845 Crossover Lane, Suite 150
Memphis, Tennessee 38117
Ladies and Gentlemen:
North Country Financial Corporation, a Michigan corporation (the
"Company"), and its financing subsidiary, North Country Capital Trust, a
Delaware business trust (the "Trust," and hereinafter together with the Company,
the "Offerors"), hereby confirm their agreement with you as placement agent (the
"Placement Agent"), as follows:
SECTION 1 ISSUANCE OF CAPITAL SECURITIES
1.1. Introduction. The Offerors propose to issue and sell at the Closing
(as defined in Section 2.4.1 hereof) a minimum of 10,000 (the "Minimum Amount")
and a maximum of 15,000 (the "Maximum Amount") of the Trust's Floating Rate
Capital Securities, with a liquidation amount of $1,000.00 per capital security
(the "Capital Securities"), to the purchasers (collectively, the "Purchasers")
listed on Exhibit A attached hereto, as it may be completed and/or updated from
time to time between the date hereof and the Closing Date (as defined in Section
2.4.1 hereof) pursuant to the terms of Subscription Agreements entered into, or
to be entered into on or prior to the Closing Date, between the Offerors and
each such Purchaser (collectively, the "Subscription Agreements"), the form of
which is attached hereto as Exhibit B. Unless otherwise defined herein,
capitalized terms shall have the meanings ascribed thereto in the preliminary
Confidential Offering Memorandum of the Offerors dated April 27, 1999 (the
"Preliminary Memorandum") and the final Confidential Offering Memorandum dated
May 7, 1999 (the "Final Memorandum", together with the Preliminary Memorandum,
the "Memorandum"). The term "Memorandum," as used herein, shall include all
documents incorporated by reference, or deemed to be incorporated by reference,
in the Memorandum.
1.2. Operative Agreements. The Offerors propose that the Trust issue the
Capital Securities pursuant to an Amended and Restated Trust Agreement among
Wilmington Trust Company, as Property Trustee and Delaware Trustee, the
Administrative Trustees named therein (collectively, the "Trustees"), and the
Company, to be dated as of the Closing Date and in substantially the form
heretofore delivered to the Placement Agent (the "Trust Agreement"). In
connection with the issuance of the Capital Securities, the Company proposes (i)
to issue its Floating Rate Junior Subordinated Debentures (the "Debentures")
pursuant to an Indenture, to be dated as of the Closing Date, between the
Company and Wilmington Trust Company, as Trustee (the "Indenture"), and (ii) to
guarantee certain payments on the Capital Securities pursuant to a Guarantee
Agreement, to be dated as of the Closing Date, between the Company and
Wilmington Trust Company, as guarantee trustee (the "Guarantee"), to the extent
described therein.
1.3. Rights of Purchasers. The Capital Securities shall be offered and sold
by the Trust directly to the Purchasers pursuant to an exemption from the
registration requirements under the Securities Act of 1933, as amended (the
"Securities Act"). The Company agrees that the Placement Agent and the
Purchasers shall be and hereby are entitled to the benefit of, and to rely upon,
the provisions of this Agreement which is incorporated by reference into the
Subscription Agreements. The Offerors and the Placement Agent have entered into
this Agreement to set forth their understanding as to their relationship and
their respective rights, duties and obligations.
1.4. Legends. Upon original issuance thereof, and until such time as the
same is no longer required under the applicable requirements of the Securities
Act, each Capital Security shall contain a legend substantially similar to the
legend set forth under the caption "Notice to Investors" in the Memorandum or as
otherwise required pursuant to any of the documents described in Section 1.2
hereof or the Expense Agreement (as defined in Section 5.3(d) hereof)
(collectively, the "Operative Documents").
SECTION 2 PLACEMENT AND SALE OF CAPITAL SECURITIES
2.1. Exclusive Rights; Purchase Price. From the date hereof until the
Closing Date (which date may be extended by mutual agreement of the Offerors and
the Placement Agent), the Offerors hereby grant to the Placement Agent the
exclusive right to solicit prospective purchasers of the Capital Securities at a
purchase price of $1,000.00 per Capital Security and with a minimum purchase of
$100,000.00.
2.2. Duties of Purchasers. Each Purchaser shall be required to complete and
execute a Subscription Agreement. Each Subscription Agreement shall be
independent of any other Subscription Agreement, and the obligation of one
Purchaser to purchase Capital Securities under a Subscription Agreement shall be
independent of, and not conditioned upon, the fulfillment of the obligations of
any other Purchaser under its Subscription Agreement. The Offerors shall have
the right to reject subscriptions in their reasonable discretion and shall
evidence their acceptance of a subscription by countersigning a copy of the
Subscription Agreement and returning the same to the Placement Agent.
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2.3. Solicitation of Potential Purchasers. The Placement Agent shall
solicit potential purchasers of the Capital Securities only from parties whom it
has a reasonable basis to believe are either qualified institutional buyers
("QIBs"), as such term is defined under Rule 144A(a)(1) of the Securities Act,
institutional accredited investors, as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act ("Institutional Accredited Investors") or
individual accredited investors, as define in Rule 501(a)(5) or (6) under the
Securities Act ("Individual Accredited Investors"). All solicitations by the
Placement Agent on behalf of the Offerors shall be in compliance with applicable
federal and state securities laws. The Placement Agent shall not make any
representation with respect to the Offerors other than as set forth in the
Memorandum. The Placement Agent shall furnish a certificate at Closing to the
effect that it has complied with this Section 2.3. The Placement Agent may
arrange for the solicitation of prospective purchasers by other persons;
provided, however, that (i) any compensation shall be received by such person
pursuant to Section 2.5, and (ii) each such person shall comply with the
representations set forth in this Section 2.3 and shall furnish a certificate at
the Closing to the effect that it has complied with this Section 2.3. The
Placement Agent shall promptly deliver, or cause persons acting on its behalf to
promptly deliver, a copy of the Memorandum to each Purchaser and prior to the
Closing to deliver any subsequent supplements and exhibits thereto, if any.
2.4. Closing and Delivery of Payment.
2.4.1. Closing; Closing Date. The sale and purchase of the Capital
Securities by the Offerors to the Purchasers shall take place at a closing
(the "Closing") at the offices of the Placement Agent, at 10:00 a.m.
(Eastern Time) on May 14, 1999, or such other business day as may be agreed
upon by the Offerors and the Placement Agent (the "Closing Date");
provided, however, that in no event shall the Closing Date occur later than
May 20, 1999 unless consented to by the Purchasers. Payments by the
Purchasers shall be payable in the manner set forth in the Subscription
Agreements and shall be made prior to or on the Closing Date.
2.4.2. DTC Delivery. On the Closing Date, and on the payment of the
purchase price, each Purchaser shall become an owner of a beneficial
interest in the Capital Securities, corresponding to the number of
purchased Capital Securities acquired by the Purchaser. The Capital
Securities will be issued only in global book entry form and will be
registered in the name of Cede & Co., as nominee for The Depository Trust
Company, a limited purpose trust company organized under the laws of the
state of New York.
2.4.3. Transfer Agent. The Offerors shall deposit the certificates
representing the Capital Securities with the Property Trustee or other
appropriate party prior to the Closing Date.
2.5. Placement Agent's Fees and Expenses.
2.5.1. Placement Agent's Compensation. Because the proceeds from the
sale of the Capital Securities shall be used to purchase the Debentures
from the Company, the Company shall pay $30.00 to the Placement Agent for
each Capital Security sold to a Purchaser.
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2.5.2. Costs and Expenses. Whether or not this Agreement is terminated
or the sale of the Capital Securities is consummated, the Company hereby
covenants and agrees that it shall pay or cause to be paid (directly or by
reimbursement) all costs and expenses incident to the performance of the
obligations of the Offerors under this Agreement, including the
preparation, printing, delivery and shipping of the Memorandum and any
amendments or supplements thereto, and the printing, delivery and shipping
of this Agreement and the Operative Documents and the certificates for the
Capital Securities; all fees, expenses and disbursements of the counsel and
accountants for the Offerors; all fees and expenses incurred in connection
with the qualification of the Capital Securities, Debentures and the
Guarantee under the securities or blue sky laws of such jurisdictions as
the Placement Agent may request, including all filing fees and fees and
disbursements of counsel to the Offerors and the Placemen Agent in
connection therewith, including, without limitation, in connection with the
preparation of any Blue Sky Memoranda; the costs and charges of any
trustee, transfer agent or registrar and the fees and disbursements of
counsel to any trustee, transfer agent or registrar; all applicable fees
and other expenses incurred in connection with the designation of the
Capital Securities as securities eligible for trading in the Private
Offerings, Resales and Trading through Automated Linkages ("PORTAL")
market; all applicable fees and other expenses incurred in connection with
the book-entry registration of Capital Securities with DTC or another
clearing agency; all expenses incident to the preparation, execution and
delivery of the Trust Agreement, the Indenture, the Guarantee and the
Expense Agreement; and all other costs and expenses incident to the
performance of the obligations of the Company hereunder and under the Trust
Agreement that are not otherwise specifically provided for in this Section
2.5.2; and the out-of-pocket expenses of the Placement Agent incurred in
connection herewith or in contemplation of the performance of its
obligations hereunder, including (without limitation) travel expenses,
reasonable fees, expenses and disbursements of counsel and other
out-of-pocket expenses incurred by the Placement Agent in connection with
any discussion of the offering of the Capital Securities or the contents of
the Memorandum, any investigation of the Offerors and the Subsidiaries, and
any preparation for the marketing, purchase, sale or delivery of the
Capital Securities, in each case following presentation of reasonably
detailed invoices therefor; provided, however, that in no event shall the
Offerors be required to reimburse the Placement Agent for out-of-pocket
expenses (of the type described above) in excess of the Reimbursement
Amount (as defined below in this Section 2.5.2.). The term "Reimbursement
Amount," as used herein, shall mean the sum of "A" and "B," where "A" shall
equal $40,000 and "B" shall equal the product of "X" multiplied by "Y,"
where "X" shall equal $60,000 and "Y" shall equal a fraction, the numerator
of which shall equal the number of Capital Securities sold in the Offering
in excess of 11,000 and the denominator of which shall equal 4,000.
2.5.3. Allocation Between Placement Agent and other Persons. Any other
persons arranging sales of Capital Securities in accordance with the terms
of this Agreement shall receive such compensation as the Placement Agent
may determine in its discretion from the proceeds payable to the Placement
Agent pursuant to Section 2.5.1 above.
2.6. Failure to Close. If any of the conditions to the Closing specified in
this Agreement shall not have been fulfilled to the satisfaction of the
Placement Agent or if the
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Closing shall not have occurred on or before 10:00 a.m. (Eastern Time) on May
20, 1999, then each party hereto, notwithstanding anything to the contrary in
this Agreement, shall be relieved of all further obligations under this
Agreement without thereby waiving any rights it may have by reason of such
nonfulfillment or failure; provided, however, that the obligations of the
parties under Sections 2.5.2 and 9 hereof shall not be so relieved and shall
continue in full force and effect.
SECTION 3 CLOSING CONDITIONS
The obligations of each Purchaser and the Placement Agent on the Closing
Date shall be subject to the accuracy, at and as of the Closing Date, of the
representations and warranties of the Offerors contained in this Agreement, to
the accuracy, at and as of the Closing Date, of the statements of the Offerors
made in any certificates pursuant to this Agreement, to the performance by the
Offerors of their respective obligations under this Agreement, to compliance, at
and as of the Closing Date, by th Offerors with their respective agreements
herein contained, and to the following further conditions:
3.1. Opinions of Counsel. On the Closing Date, the Purchasers shall have
received a favorable opinion, dated as of the Closing Date and addressed to the
Purchasers and the Placement Agent, from (a) Varnum, Riddering, Schmidt &
Howlett, LLP, counsel for the Offerors, as to the matters set forth on Exhibit
C-1 attached hereto, and (b) Richards, Layton & Finger, special Delaware counsel
to the Offerors, as to the matters set forth on Exhibit C-2 attached hereto
(collectively, "Offerors' Counsel Opinions"). In rendering the Offerors' Counsel
Opinions, counsel to the Offerors may rely as to factual matters upon
certificates or other documents furnished by officers, directors and trustees of
the Offerors (copies of which shall be delivered to the Placement Agent on
behalf of itself and the Purchasers) and by government officials, and upon such
other documents as counsel to the Offerors may deem appropriate as a basis for
the Offerors' Counsel Opinion. Counsel to the Offerors may specify the
jurisdictions in which they are admitted to practice and that they are not
admitted to practice in any other jurisdiction and are not experts in the law of
any other jurisdiction. To the extent that the Offerors' Counsel Opinions
concern the laws of any other such jurisdiction, counsel to the Offerors may
rely upon the opinion of other counsel (reasonably satisfactory to the Placement
Agent) admitted to practice in such jurisdiction. Any such other opinion relied
upon by counsel to the Offerors as aforesaid shall be addressed to the
Purchasers and the Placement Agent.
3.2. Officers' Certificate. At the Closing Date, the Purchasers and the
Placement Agent shall have received certificates from the Chief Executive
Officer and the Chief Financial Officer of the Company, dated as of the Closing
Date, stating that (i) the representations and warranties of the Offerors set
forth in Section 5 hereof are true and correct as of the Closing Date and that
the Offerors have complied with all agreements and satisfied all conditions on
their part to be performed or satisfied at or prior to the Closing Date, (ii)
since the respective dates as of which information is given in the Memorandum
there has not been any material adverse change in the Offerors or any
development which is reasonably likely to have any adverse effect on the
business, operations, earnings, affairs, prospects or results of operations of
the Offerors, (iii) since such dates the Offerors have not incurred any
liability or obligation, direct or contingent, or
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entered into any material transactions, other than in the ordinary course of
business, which is material to the Offerors, (iv) they have carefully examined
the Memorandum and nothing has come to their attention that would lead them to
believe that the Memorandum or any amendment or supplement thereto as of their
respective effective or issue dates, contained, and the Memorandum at such
Closing Date, contains any untrue statement of a material fact, or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (v) covering such other matters as the Placement
Agent may reasonably request.
3.3. Trustees Certificate. At the Closing Date, the Purchasers shall have
received a certificate of one or more Administrative Trustees of the Trust,
dated as of the Closing Date, stating that (i) the representations and
warranties of the Trust set forth in Section 5 hereof are true and correct as of
the Closing Date and that the Trust has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
the Closing Date, and (ii) since the respective dates as of which information is
given in the Memorandum, there has not been any material adverse change in the
Trust, or any development which is reasonably likely to have an adverse effect
on the business, operations, earnings, affairs, prospects, or results of
operations of the Trust and the Trust has not incurred any liability or
obligation, direct or contingent, or entered into any material transactions,
other than those specifically permitted or contemplated by the Operative
Documents.
3.4. Accountants' Letter. On the date hereof and on the Closing Date, the
Placement Agent shall have received a letter, dated as of the date hereof and as
of the Closing Date, and addressed to the Placement Agent, from Wipfli Ullrich
and Bertelson, the independent auditors of the Company, in a form and as to the
matters set forth on Exhibit C-3 attached hereto.
3.5. Purchase Permitted by Applicable Laws; Legal Investment. With respect
to each Purchaser, the purchase of and payment for the Capital Securities (a)
shall not be prohibited by any applicable law or governmental regulation, (b)
shall not subject such Purchaser to any penalty or, in the reasonable judgment
of such Purchaser, other onerous condition under or pursuant to any applicable
law or governmental regulation, and (c) shall be permitted by the laws and
regulations of the jurisdictions to which such Purchaser is subject. The failure
by one Purchaser to comply with this Section 3.5 shall only prevent the purchase
by such Purchaser, and shall not have any effect on the other Purchasers
hereunder.
3.6. Consents and Permits. The Company and the Trust shall have received
all consents, permits and other authorizations, and made all such filings and
declarations, as may be required from any person pursuant to any law, statute,
regulation or rule (federal, state, local and foreign), or pursuant to any
agreement, order or decree to which the Company or the Trust is a party or to
which it is subject, in connection with the transactions contemplated by this
Agreement.
3.7. Acceptance of Capital Securities. Prior to or on the Closing Date, the
Offerors shall have received Subscription Agreements executed by the Purchasers
and representing no less than the Minimum Amount and no more than the Maximum
Amount of Capital Securities and
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the Offerors shall have executed such Subscription Agreements on behalf of the
Offerors.
3.8. Information. Prior to or on the Closing Date, the Offerors shall have
furnished to the Placement Agent such further information, certificates,
opinions and documents addressed to the Purchasers and the Placement Agent,
which the Placement Agent may reasonably request, including, without limitation,
a complete set of the Operative Documents or any other documents or certificates
required by this Section 3; and all proceedings taken by the Offerors in
connection with the issuance, offer and sale of the Capital Securities as herein
contemplated shall be reasonably satisfactory in form and substance to the
Placement Agent.
If any condition specified in this Section 3 shall not have been fulfilled
when and as required in this Agreement, or if any of the opinions or
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Placement Agent, this
Agreement may be terminated by the Placement Agent by notice to the Offerors at
any time at or prior to the Closing Date. Notice of such termination shall be
given to the Offerors in writing or by telephone o facsimile confirmed in
writing.
SECTION 4 CONDITIONS TO THE OFFERORS' OBLIGATIONS
The obligations of the Offerors to sell the Capital Securities to the
Purchasers and consummate the transactions contemplated by this Agreement shall
be subject to the following conditions:
4.1. Executed Agreement. The Offerors shall have received from the
Placement Agent an executed copy of this Agreement.
4.2. Approved States. The Placement Agent shall not have offered the
Capital Securities to Institutional Accredited Investors, Individual Accredited
Investors or QIBs in any state other than states approved by the Offerors or
states in which Blue Sky exemption clearance has been obtained according to
counsel to the Company or the Placement Agent.
4.3. Fulfillment of Other Obligations. The Placement Agent shall have
fulfilled all of its other obligations and duties required to be fulfilled under
this Agreement prior to or at the Closing.
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE OFFERORs
The Offerors jointly and severally represent and warrant to, and agree
with, the Placement Agent and the Purchasers as follows:
5.1. Accuracy of Memorandum and Related Matters. The Preliminary Memorandum
is accurate in all material respects and does not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
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The Final Memorandum will be at the Closing Date accurate in all material
respects and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. There are no contracts or other documents that are required to
be summarized in the Memorandum, or attached as an exhibit thereto, that are not
so summarized or attached. The sale of the Capital Securities under the
Subscription Agreements is exempt from the registration and prospectus delivery
requirements of the Securities Act. In the case of each offer or sale of the
Capital Securities, no form of general solicitation or general advertising was
used by the Offerors or their representatives including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. The Purchasers are the sole purchasers of
the Capital Securities. No securities of the same class as the Capital
Securities, the Debentures or the Guarantee have been issued and sold by the
Offerors within the six-month period immediately prior to the date of this
Agreement. The Offerors agree that neither they nor any person acting on their
behalf shall offer the Capital Securities so as to bring the issuance and sale
of the Capital Securities within the provisions of Section 5 of the Securities
Act nor offer any similar securities for issuance or sale to, or solicit any
offer to acquire any of the same from, or otherwise approach or negotiate with
respect thereto with, anyone if the sale of the Capital Securities would be
integrated as a single offering for the purposes of the Securities Act,
including, without limitation, Regulation D thereunder. The Offerors have made
such reasonable inquiry as is necessary to a determination that each Purchaser
is acquiring the Capital Securities for itself.
5.2. Organization, Standing and Qualification.
(a) The Company is duly organized, validly existing and in good
standing under the laws of the State of Michigan, with full corporate and
other power and authority to own, lease and operate its properties and
conduct its business as described in and contemplated by the Memorandum,
and as currently being conducted, and is duly registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"). Each of the Company and the Subsidiaries (as defined in Section
5.2(c) hereof) is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases property or conducts its business so as to require such
qualification and in which the failure to so qualify would, individually or
in the aggregate, have a material adverse effect on the condition
(financial or otherwise), earnings, business, prospects or results of
operations of the Company and the Subsidiaries, on a consolidated basis.
(b) The capital stock of the Offerors conforms to the description
thereof contained in the Memorandum in all material respects. The
outstanding shares of capital stock and equity securities of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable, and no such shares were issued in violation of the
preemptive or similar rights of any security holder of the Company; no
person has any preemptive or similar right to purchase any shares of
capital stock or equity securities of the Offerors. Except as disclosed in
the Memorandum, other than options to purchase 4,800 shares of common stock
of the Company
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granted to certain directors of the Company on April 20, 1999, there are no
outstanding rights, options or warrants to acquire any securities of the
Offerors, and there are no restrictions upon the voting or transfer of any
capital stock of the Offerors pursuant to the Offerors' respective articles
of incorporation, bylaws, or other organizational documents or any
agreement or other instrument to which any Offeror is a party or by which
any Offeror is bound.
(c) The Company has the direct and indirect subsidiaries identified on
Exhibit D hereto (the "Subsidiaries"). The Company does not own or control,
directly or indirectly, more than 5% of any class of equity security of any
corporation, association or other entity other than the Subsidiaries. North
Country Bank and Trust (the "Bank") is a bank duly organized, validly
existing and in good standing under the laws of the State of Michigan. Each
Subsidiary other than the Bank is a corporation or business trust duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each Subsidiary has full
corporate and other power and authority to own, lease and operate its
properties and to conduct its business as described in and contemplated by
the Memorandum and as currently being conducted. The deposit accounts of
the Bank are insured by the Bank Insurance Fund administered by the Federal
Deposit Insurance Corporation (the " FDIC") up to the maximum amount
provided by law; and no proceedings for the modification, termination or
revocation of any such insurance are pending or, to the knowledge of the
Offerors, threatened. All of the issued and outstanding shares of capital
stock of the Subsidiaries (i) have been duly authorized and are validly
issued, (ii) are fully paid and nonassessable except to the extent such
shares may be deemed assessable under Section 201 of the Michigan Banking
Code, as amended or 12 U.S.C. Section 1831o, and (iii) except as disclosed
in the Memorandum, are directly owned by the Company free and clear of any
security interest, mortgage, pledge, lien, encumbrance, restriction upon
voting or transfer, preemptive rights, claim or equity. Except as disclosed
in the Memorandum, other than options to purchase 4,800 shares of common
stock of the Company granted to certain directors of the Company on April
20, 1999, there are no outstanding rights, warrants or options to acquire
or instruments convertible into or exchangeable for any capital stock or
equity securities of the Company or the Subsidiaries.
(d) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Delaware Business Trust
Act with the power and authority (trust and other) to own its property and
conduct its business as described in the Memorandum, to issue and sell its
Common Securities to the Company pursuant to the Trust Agreement, to issue
and sell the Capital Securities, to enter into and perform its obligations
under this Agreement, the Subscription Agreements and the Trust Agreement
and to consummate the transactions herein contemplated; the Trust has no
subsidiaries and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or the
ownership of its property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not have a
material adverse effect on the Trust; the Trust has conducted and will
conduct no business other than the transactions contemplated by this
Agreement, the Trust Agreement and described in the Memorandum; the Trust
is not a party to or bound by any agreement or instrument other than this
Agreement and the initial Trust Agreement among the Administrative Trustees
and Wilmington Trust Company dated April 22, 1999 (the "Original Trust
Agreement"); at the Closing Date, the Trust will not be a party to or be
9
bound by any agreement or instrument other than the Trust Agreement and the
agreements and instruments contemplated by the Trust Agreement and
described in the Memorandum; the Trust has no liabilities or obligations
other than those arising out of the transactions contemplated by this
Agreement and the Trust Agreement and described in the Memorandum; the
Trust is not a party to or subject to any action, suit or proceeding of any
nature; the Trust is not, and at the Closing Date will not be, classified
as an association taxable as a corporation for United States federal income
tax purposes; and the Trust is and as of the Closing Date will be, treated
as a consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
5.3 Authorization and Legality.
(a) The Trust has all requisite power and authority to issue, sell and
deliver the Capital Securities in accordance with and upon the terms and
conditions set forth in this Agreement, the Subscription Agreements, the
Trust Agreement and the Memorandum. All corporate action required to be
taken by the Offerors for the authorization, issuance, sale and delivery of
the Capital Securities in accordance with such terms and conditions has
been validly and sufficiently taken. The Capital Securities, when delivered
in accordance with this Agreement and the Subscription Agreements, shall be
duly and validly issued and outstanding and shall be fully paid and
nonassessable, shall not be issued in violation of or subject to any
preemptive or similar rights, and shall conform in all material respects to
the description thereof in the Memorandum. None of the Capital Securities,
immediately prior to delivery, shall be subject to any security interest,
lien, mortgage, pledge, encumbrance, restriction upon voting or transfer,
preemptive rights, claim, equity or other defect.
(b) The Debentures have been duly and validly authorized, and, when
duly and validly executed, authenticated and issued as provided in the
Indenture and delivered to the Trust pursuant to the Trust Agreement, shall
constitute valid and legally binding obligations of the Company entitled to
the benefits of the Indenture and shall conform to the description thereof
contained in the Memorandum.
(c) The Guarantee has been duly and validly authorized, and, when duly
and validly executed and delivered to the Guarantee Trustee for the benefit
of the Trust, shall constitute valid and legally binding obligations of the
Company and shall conform to the description thereof contained in the
Memorandum.
(d) The Agreement as to Expenses and Liabilities between the Company
and the Trust (the "Expense Agreement") has been duly and validly
authorized, and, when duly and validly executed and delivered by the
Company, shall constitute valid and legally binding obligations of the
Company and shall conform to the description thereof contained in the
Memorandum.
5.4. Permits. The Offerors have all material permits, easements, consents,
licenses, franchises and other governmental and regulatory authorizations from
all appropriate federal, state, local or other public authorities ("Permits") as
are necessary to own and lease their properties and conduct their businesses in
the manner described in and contemplated by the
10
Memorandum and as currently being conducted in all material respects. All such
Permits are in full force and effect and each of the Offerors are in all
material respects complying therewith, and no event has occurred that allows, or
after notice or lapse of time would allow, revocation or termination thereof or
will result in any other material impairment of the rights of the holder of any
such Permit, subject in each case to such qualification as may be adequately
disclosed in the Memorandum. Such Permits contain no restrictions that would
materially impair the ability of the Offerors to conduct their businesses in the
manner consistent with their past practices. The Offerors have not received
notice or otherwise have no knowledge of any proceeding or action relating to
the revocation or modification of any such Permit.
5.5. No Defaults. Neither of the Offerors is in breach or violation of its
corporate articles of incorporation or charter, by-laws or other governing
documents in any material respect. Neither of the Offerors is, and to the
knowledge of the Offerors no other party is, in violation, breach or default
(with or without notice or lapse of time or both) in the performance or
observance of any term, covenant, agreement, obligation, representation,
warranty or condition contained in (a) any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease, franchise, license, Permit or
any other agreement or instrument to which it is a party or by which it or any
of its properties may be bound, which breach, violation or default could have a
material adverse consequence to the Offerors on a consolidated basis, and no
other party has threatened that the Offerors are in such violation, breach or
default, or (b) except as disclosed in the Memorandum, any order, decree,
judgment, rule or regulation of any court, arbitrator, government, or
governmental agency or instrumentality, domestic or foreign, having jurisdiction
over the Offerors or any of their respective properties the breach, violation or
default of which could have a material adverse effect on the condition,
financial or otherwise, earnings, affairs, business, prospects, or results of
operations of the Offerors.
5.6. Conflicts, Authorizations and Approvals. The execution, delivery and
performance of this Agreement and the Subscription Agreements and the
consummation of the transactions contemplated by this Agreement, the
Subscription Agreements, the Operative Documents and the Memorandum do not and
will not conflict with, result in the creation or imposition of any material
lien, claim, charge, encumbrance or restriction upon any property or assets of
the Offerors or the Capital Securities pursuant to, constitute a breach or
violation of, or constitute a default under, with or without notice or lapse of
time or both, any of the terms, provisions or conditions of the articles of
incorporation or by-laws of the Company, the Operative Documents, any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease,
Permit or any other agreement or instrument to which the Offerors or the
Subsidiaries are a party or by which any of them or any of their respective
properties may be bound or any order, decree, judgment, rule or regulation of
any court, arbitrator, government, or governmental agency or instrumentality,
domestic or foreign, having jurisdiction over the Offerors or the Subsidiaries
or any of their respective properties which conflict, creation, imposition,
breach, violation or default would, either singly or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, earnings,
affairs, business, prospects or results of operations of the Offerors on a
consolidated basis. No authorization, approval, consent or order of or filing,
registration or qualification with, any person (including, without limitation,
any court, governmental body or authority) is required in connection with the
transactions contemplated by
11
this Agreement, the Subscription Agreements, the Operative Documents or the
Memorandum, except pursuant to the Blue Sky laws of any jurisdiction and
confirmation of the Tier 1 Capital treatment of a portion of the proceeds of the
Offering by the Board of Governors of the Federal Reserve System (which approval
has been obtained).
5.7. Power and Authority. The Offerors have all requisite corporate or
trust power and authority to enter into this Agreement and the Subscription
Agreements, and this Agreement has been duly and validly authorized, executed
and delivered by the Offerors and constitutes the legal, valid and binding
agreement of the Offerors, enforceable against the Offerors in accordance with
its terms, except as the enforcement thereof may be limited by general
principles of equity and by bankruptcy or othe laws relating to or affecting
creditors' rights generally and except as any indemnification or contribution
provisions thereof may be limited under applicable securities laws. The
Subscription Agreements, when executed and delivered by the Offerors and the
Purchasers, shall constitute the legal, valid and binding agreement of the
Offerors, enforceable against the Offerors in accordance with their respective
terms, except as the enforcement thereof may be limited by general principles of
equity and by bankruptcy or other laws relating to or affecting creditors'
rights generally and except as any indemnification or contribution provisions
thereof may be limited under applicable securities laws. Each of the Indenture,
the Trust Agreement, the Guarantee and the Expense Agreement has been duly
authorized by the Company, and, when executed and delivered by the Company on
the Closing Date, each of said agreements will constitute a valid and legally
binding obligation of the Company and will be enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be limited by
general principles of equity and by bankruptcy or other laws relating to or
affecting creditors' rights generally and except as any indemnification or
contribution provisions thereof may be limited under applicable securities laws.
The Trust Agreement has been duly authorized by the Trust, and, when executed
and delivered by the Trust on the Closing Date, will constitute a valid and
legally binding obligation of the Trust and will be enforceable against the
Trust in accordance with its terms, except as the enforcement thereof may be
limited by general principles of equity and by bankruptcy or other laws relating
to or affecting creditors' rights generally and except as any indemnification or
contribution provisions thereof may be limited under applicable securities laws.
5.8. Title to Properties. The Offerors have good and marketable title in
fee simple to all real property and good title to all personal property owned by
them and material to their business, in each case free and clear of all security
interests, liens, mortgages, pledges, encumbrances, restrictions, claims,
equities and other defects except such as are referred to in the Memorandum or
such as do not materially affect the value of such property in the aggregate and
do not materially interfere with the use made or proposed to be made of such
property; and all of the leases under which the Offerors hold real or personal
property are valid, existing and enforceable leases and in full force and effect
with such exceptions as are not material and do not materially interfere with
the use made or proposed to be made of such real or personal property, and
neither of the Offerors is in default in any material respect of any of the
terms or provisions of any leases.
5.9. Accountants. Wipfli Ullrich and Bertelson, who has audited the
financial
12
statements of the Company and the Bank, including the notes thereto, included in
the Memorandum, are independent public accountants with respect to the Offerors.
5.10. Financial Statements. The consolidated financial statements,
including the notes thereto, included in the Memorandum with respect to the
Company present fairly the consolidated financial position of the Company as of
the dates indicated and the consolidated results of operations, cash flows and
shareholders' equity of the Company for the periods specified and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis. The selected and summary consolidated financial data
concerning the Company included in the Memorandum present fairly the information
set forth therein, and have been compiled on a basis consistent with that of the
consolidated financial statements of the Company in the Memorandum. The other
financial, statistical and numerical information included in the Memorandum
presents fairly the information shown therein, and to the extent applicable has
been compiled on a basis consistent with the consolidated financial statement of
the Company included in the Memorandum.
5.11. Subsequent Events. Since the respective dates as of which information
is given in the Memorandum, except as otherwise stated therein:
(a) Neither of the Offerors has sustained any loss or interference
with its business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree which is material to the condition
(financial or otherwise), earnings, business, prospects or results of
operations of the Offerors on a consolidated basis;
(b) There has not been any material adverse change in, or any
development which is reasonably likely to have a material adverse effect
on, the condition (financial or otherwise), earnings, business, prospects
or results of operations of the Offerors on a consolidated basis;
(c) Neither of the Offerors has incurred any liabilities or
obligations, direct or contingent, or entered into any material
transactions, other than in the ordinary course of business which is
material to the condition (financial or otherwise), earnings, business,
prospects or results of operations of the Offerors on a consolidated basis;
(d) Other than the Company's common stock dividend declared on April
20, 1999, the Offerors have not declared or paid any dividend, and the
Offerors have not become and are not delinquent in the payment of principal
or interest on any outstanding borrowings; and
(e) Other than options to purchase 4,800 shares of common stock of the
Company granted to certain directors of the Company on April 20, 1999,
there has not been any change in the capital stock, equity securities,
long-term debt, obligations under capital leases or, other than in the
ordinary course of business, short-term borrowings of the Offerors.
5.12. Litigation. Except as set forth in the Memorandum, no charge,
investigation,
13
action, suit or proceeding is pending or, to the knowledge of the Offerors,
threatened, against or affecting the Offerors or any of their respective
properties before or by any court or any regulatory, administrative or
governmental official, commission, board, agency or other authority or body, or
any arbitrator, wherein an unfavorable decision, ruling or finding could have a
material adverse effect on the consummation of this Agreement or the
transactions contemplated herein or the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the Offerors
on a consolidated basis or which is required to be disclosed in the Memorandum.
5.13. Intellectual Property. The Offerors own, or possess adequate rights
to use, all patents, copyrights, trademarks, service marks, trade names or other
rights necessary to conduct the businesses now conducted by them in all material
respects or as described in the Memorandum and neither of the Offerors have
received any notice of infringement or conflict with asserted rights of others
with respect to any patents, copyrights, trademarks, service marks, trade names
or other rights which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect on
the condition (financial or otherwise), earnings, affairs, business, prospects
or results of operations of the Offerors on a consolidated basis and the
Offerors do not know of any basis for such infringement or conflict.
5.14. Labor Matters. Except as set forth in the Memorandum, no labor
dispute involving the Offerors exists or, to the knowledge of the Offerors, is
threatened or imminent, which might be expected to have a material adverse
effect on the condition (financial or otherwise), earnings, affairs, business,
prospects or results of operations of the Offerors on a consolidated basis or
which is required to be disclosed in the Memorandum. Neither of the Offerors has
received notice of any existing or threatened labor dispute by the employees of
any of its principal suppliers, customers or contractors which might be expected
to have a material adverse effect on the condition (financial or otherwise),
earnings, affairs, business, prospects or results of operations of the Offerors
on a consolidated basis.
5.15. Tax Returns. The Offerors have timely and properly prepared and filed
all necessary federal, state, local and foreign tax returns which are required
to be filed and have paid all taxes shown as due thereon and have paid all other
taxes and assessments to the extent that the same shall have become due, except
such as are being contested in good faith or where the failure to so timely and
properly prepare and file would not have a material adverse effect on the
condition (financial or otherwise), earnings, affairs, business, prospects or
results of operations of the Offerors, on a consolidated basis. The Offerors
have no knowledge of any tax deficiency which has been or might be assessed
against the Offerors which, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of operations of
the Offerors on a consolidated basis.
5.16. Material Contracts. Each of the material contracts, agreements and
instruments described or referred to in the Memorandum is in full force and
effect and is the legal, valid and binding agreement of the Offerors enforceable
in accordance with its terms, except as the
14
enforcement thereof may be limited by general principles of equity and by
bankruptcy or other laws relating to or affecting creditors' rights generally or
by 12 U.S.C. Section 1818(b)(6)(D). Except as disclosed in the Memorandum, to
the knowledge of the Offerors, no other party to any such agreement is (with or
without notice or lapse of time or both) in breach or default in any material
respect thereunder.
5.17. Dividend Restrictions. Except as set forth in the Memorandum, there
are no contractual encumbrances or restrictions or material legal restrictions
required to be described therein on the ability of the Subsidiaries (i) to pay
dividends or make any other distributions on their capital stock or to pay any
indebtedness owed to the Offerors, (ii) to make any loans or advances to, or
investments in, the Offerors, or (iii) to transfer any of their property or
assets to the Offerors.
5.18. Investment Company. Neither the Company nor the Trust is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended (the "Investment Company Act").
5.19. Other Offering Material. The Offerors have not distributed, and shall
not distribute, any offering document in connection with the offering
contemplated hereby, other than the Memorandum.
5.20. Internal Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
accounts is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accounts for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect thereto.
5.21. Environmental Matters. Except as set forth in the Memorandum, to the
knowledge of the Offerors, there is no factual basis for any action, suit or
other proceeding involving the Offerors or any of their respective material
assets for any failure of the Company or any predecessor thereof, to comply with
any requirements of federal, state or local regulation relating to air, water,
solid waste management, hazardous or toxic substances, or the protection of
health or the environment, except where such action, suit or other proceeding
would not have a material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of operations of
the Offerors, on a consolidated basis. Except as set forth in the Memorandum or
as would not have material adverse effect on the condition (financial or
otherwise), earnings, affairs, business, prospects or results of operations of
the Offerors, on a consolidated basis, to the knowledge of the Offerors, none of
the property owned or leased by the Offerors is contaminated with any waste or
hazardous substances, and neither of the Offerors may be deemed an "owner or
operator" of a "facility" or "vessel" which owns, possesses, transports,
generates or disposes of a "hazardous substance" as those terms are defined in
ss. 9601 of the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. ss. 9601 et seq.
15
SECTION 6 REPRESENTATIONS AND WARRANTIES OF THE PLACEMENT AGENT
The Placement Agent represents and warrants to the Offerors as follows:
6.1. Organization, Standing and Qualification. The Placement Agent is a
division of First Tennessee Bank, N.A., a national banking association duly
organized, validly existing and in good standing under the laws of the United
States, with full power and authority to own, lease and operate its properties
and conduct its business as currently being conducted. The Placement Agent is
duly qualified to transact business as a foreign corporation and is in good
standing in each other jurisdiction i which it owns or leases property or
conducts its business so as to require such qualification and in which the
failure to so qualify would, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), earnings, business,
prospects or results of operations of the Placement Agent.
6.2. Power and Authority. The Placement Agent has all requisite power and
authority to enter into this Agreement, and this Agreement has been duly and
validly authorized, executed and delivered by the Placement Agent and
constitutes the legal, valid and binding agreement of the Placement Agent,
enforceable against the Placement Agent in accordance with its terms, except as
the enforcement thereof may be limited by general principles of equity and by
bankruptcy or other laws relating to or affecting creditors' rights generally
and except as any indemnification or contribution provisions thereof may be
limited under applicable securities laws.
6.3. Information. The information regarding the Placement Agent set forth
under the caption "Plan of Distribution" in the Offering Memorandum (the
"Placement Agent Information") is accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
6.4 General Solicitation. In the case of each offer or sale of the Capital
Securities, no form of general solicitation or general advertising was used by
the Placement Agent or its representatives including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
6.5 Purchasers. The Placement Agent has made such reasonable inquiry as is
necessary to a determination that each Purchaser is acquiring the Capital
Securities for itself.
16
SECTION 7 COVENANTS OF THE OFFERORS
The Offerors covenant and agree with the Placement Agent and the Purchasers
as follows:
7.1. Compliance with Representations and Warranties. During the period from
the date of this Agreement to the Closing Date, the Offerors shall use their
best efforts and take all reasonable action necessary or appropriate to cause
their representations and warranties contained in Section 5 hereof to be true as
of Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date.
7.2. Sale of Other Securities. The Offerors and their affiliates shall not
sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) that would or could be
integrated with the sale of the Capital Securities in a manner that would
require the registration under the Securities Act of the Capital Securities.
7.3. 144A Information and Financial Information. For so long as any of the
Capital Securities remain outstanding, the Offerors agree to make available to
any beneficial owner of the Capital Securities and any prospective purchaser of
such Capital Securities, the information required by Rule 144A(d)(4) under the
Securities Act.
7.4. Use of Proceeds. The Trust shall use the proceeds from the sale of the
Capital Securities to purchase the Debentures from the Company and the Company
shall use the net proceeds received from the sale of the Debentures to the Trust
in the manner specified in the Memorandum under the caption "Use of Proceeds."
7.5. Investment Company. The Offerors shall not engage, or permit any
Subsidiary to engage, in any activity which would cause it or any Subsidiary to
be an "investment company" under the provisions of the Investment Company Act.
SECTION 8 COVENANTS OF THE PLACEMENT AGENT
The Placement Agent covenants and agrees with the Offerors as follows:
8.1 Compliance with Representations and Warranties. During the period from
the date of this Agreement to the Closing Date, the Placement Agent shall use
its best efforts and take all action necessary or appropriate to cause its
representations and warranties contained in Section 6 hereof to be true as of
Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of the Closing Date.
8.2 Compliance with Securities Laws and Terms of the Offering. The
Placement Agent, in connection with its obligations hereunder, shall comply with
the state Blue Sky laws of the various jurisdictions in which the Capital
Securities will be offered or sold and shall solicit potential purchasers of the
Capital Securities in accordance with Section 2.3 hereof and as described in the
Memorandum.
17
SECTION 9 INDEMNIFICATION
9.1. Indemnification Obligation.
(a) The Offerors shall jointly and severally indemnify and hold
harmless the Placement Agent and each person that controls the Placement
Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and agents, employees, officers and directors or any such controlling
person of the Placement Agent (each such indemnified party, a "Placement
Agent Indemnified Party") from and against any and all losses, claims,
damages, judgments, liabilities or expenses, joint or several, to which
such Placement Agent Indemnified Party may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Offerors), insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof as contemplated below) arise out of, or are
based upon, or relate to, any untrue statement or alleged untrue statement
of any material fact contained in the Memorandum, arise out of, or are
based upon, or relate to, the omission or alleged omission to state in the
Memorandum a material fact required to be stated therein or necessary to
make the statements in the Memorandum not misleading, or arise out of, or
are based upon, or relate to, in whole or in part on any breach or
inaccuracy of any representation or warranty of the Offerors set forth
herein or any failure of the Offerors to perform their respective
obligations hereunder or under the Subscription Agreements or under law;
and shall reimburse each Placement Agent Indemnified Party for any legal
and other expenses as such expenses are reasonably incurred by such
Placement Agent Indemnified Party in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Offerors shall
not be liable in any such case to the extent that any such loss, claim,
damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in the Memorandum about a Placement Agent Indemnified Party in reliance
upon and in conformity with the information furnished to the Offerors in
writing by any Placement Agent Indemnified Party expressly for use therein.
In addition to its other obligations under this Section 9, the Offerors
hereby agree that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of, or based
upon, or related to the matters described above in this Section 9.1(a),
they shall reimburse each Placement Agent Indemnified Party on a quarterly
basis for all reasonable legal or other expenses incurred in connection
with investigating or defending any such claim, action, investigation,
inquiry or other proceeding, notwithstanding the absence of judicial
determination as to the propriety and enforceability of the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, each Placement Agent Indemnified
Party shall promptly return such amounts to the Offerors together with
interest, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced from
time to time by First Tennessee Bank, N.A. (the "Prime Rate"). Any such
interim reimbursement payments which are not made to a Placement Agent
Indemnified Party within 30 days of a request for reimbursement, shall bear
interest at the Prime Rate from the date of such request.
18
(b) Placement Agent shall indemnify and hold harmless the Offerors and
each person that controls the Offerors within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, and agents,
employees, officers and directors or any such controlling person of the
Offerors (each such indemnified party, an "Offeror Indemnified Party") from
and against any and all losses, claims, damages, judgments, liabilities or
expenses, joint or several, to which such Offeror Indemnified Party may
become subject under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected
with the written consent of the Placement Agent), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) solely arise out of, or are based solely upon, or
relate solely to the bad faith, gross negligence or willful misconduct of
the Placement Agent; and shall reimburse each Offeror Indemnified Party for
any legal and other expenses as such expenses are reasonably incurred by
such Offeror Indemnified Party in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action. In addition to its other obligations under this Section
9, the Placement Agent hereby agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of, or based upon, or related to the matters described above in
this Section 9.1(b), it shall reimburse each Offeror Indemnified Party on a
quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of
a judicial determination as to the propriety and enforceability of the
possibility that such payments might later be held to have been improper by
a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, each Offeror
Indemnified Party shall promptly return such amounts to the Placement Agent
together with interest at the Prime Rate. Any such interim reimbursement
payments which are not made to an Offeror Indemnified Party within 30 days
of a request for reimbursement, shall bear interest at the Prime Rate from
the date of such request
9.2. Conduct of Indemnification Proceedings.
(a) Promptly after receipt by a Placement Agent Indemnified Party
under this Section 9 of notice of the commencement of any action, such
Placement Agent Indemnified Party shall, if a claim in respect thereof is
to be made against the Offerors under this Section 9, notify the Offerors
in writing of the commencement thereof; but the omission so to notify the
Offerors shall not relieve them from any liability which the Offerors may
have to any Placement Agent Indemnified Party. In cas any such action is
brought against any Placement Agent Indemnified Party and such Placement
Agent Indemnified Party seeks or intends to seek indemnity from the
Offerors, the Offerors shall be entitled to participate in, and, to the
extent that they may wish, to assume the defense thereof with counsel
reasonably satisfactory to such Placement Agent Indemnified Party;
provided, however, if the defendants in any such action include both the
Placement Agent Indemnified Party and the Offerors and the Placement Agent
Indemnified Party shall have reasonably concluded that there may be a
conflict between the positions of the Offerors and the Placement Agent
Indemnified Party in conducting the defense
19
of any such action or that there may be legal defenses available to it
and/or other Placement Agent Indemnified Parties which are different from
or additional to those available to the Offerors, the Placement Agent
Indemnified Party shall have the right to select separate counsel to assume
such legal defenses and to otherwise participate in the defense of such
action on behalf of such Placement Agent Indemnified Party. Upon receipt of
notice from the Offerors to such Placement Agent Indemnified Party of their
election so to assume the defense of such action and approval by the
Placement Agent Indemnified Party of counsel, the Offerors shall not be
liable to such Placement Agent Indemnified Party under this Section 9 for
any legal or other expenses subsequently incurred by such Placement Agent
Indemnified Party in connection with the defense thereof unless (i) the
Placement Agent Indemnified Party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the
proviso in the preceding sentence (it being understood, however, that the
Offerors shall not be liable for the expenses of more than one separate
counsel representing the Placement Agent Indemnified Parties who are
parties to such action), or (ii) the Offerors shall not have employed
counsel reasonably satisfactory to the Placement Agent Indemnified Party to
represent the Placement Agent Indemnified Party within a reasonable time
after notice of commencement of the action, in each of which cases the fees
and expenses of counsel shall be at the expense of the Offerors.
(b) Promptly after receipt by an Offeror Indemnified Party under this
Section 9 of notice of the commencement of any action, such Offeror
Indemnified Party shall, if a claim in respect thereof is to be made
against the Placement Agent under this Section 9, notify the Placement
Agent in writing of the commencement thereof; but the omission so to notify
the Placement Agent shall not relieve it from any liability which the
Placement Agent may have to any Offeror Indemnified Party. In case any such
action is brought against any Offeror Indemnified Party and such Offeror
Indemnified Party seeks or intends to seek indemnity from the Placement
Agent, the Placement Agent shall be entitled to participate in, and, to the
extent that it may wish, to assume the defense thereof with counsel
reasonably satisfactory to such Offeror Indemnified Party; provided,
however, if the defendants in any such action include both the Offeror
Indemnified Party and the Placement Agent and the Offeror Indemnified Party
shall have reasonably concluded that there may be a conflict between the
positions of the Placement Agent and the Offeror Indemnified Party in
conducting the defense of any such action or that there may be legal
defenses available to it and/or other Offeror Indemnified Parties which are
different from or additional to those available to the Placement Agent, the
Offeror Indemnified Party shall have the right to select separate counsel
to assume such legal defenses and to otherwise participate in the defense
of such action on behalf of such Offeror Indemnified Party. Upon receipt of
notice from the Placement Agent to such Offeror Indemnified Party of its
election so to assume the defense of such action and approval by the
Offeror Indemnified Party of counsel, the Placement Agent shall not be
liable to such Offeror Indemnified Party under this Section 9 for any legal
or other expenses subsequently incurred by such Offeror Indemnified Party
in connection with the defense thereof unless (i) the Offeror Indemnified
Party shall have employed such counsel in connection with the assumption of
legal defenses in accordance with the proviso in the preceding sentence (it
being understood, however, that the Placement Agent shall not be liable for
the expenses of more than one separate counsel representing the Offeror
Indemnified Parties who are parties to such action), or (ii) the Placement
Agent shall not have employed counsel reasonably satisfactory to the
Offeror Indemnified Party to represent
20
the Offeror Indemnified Party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the Placement Agent.
9.3. Contribution.
(a) If the indemnification provided for in this Section 9 is required
by its terms, but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless a Placement Agent Indemnified Party under
Section 9.1(a) in respect of any losses, claims, damages, liabilities or
expenses referred to herein or therein, then the Offerors shall contribute
to the amount paid or payable by such Placement Agent Indemnified Party as
a result of any losses, claims, damages, liabilities or expenses referred
to herein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Offerors and the Placement Agent from the offering
of such Capital Securities, or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Offerors and the Placement
Agent in connection with the statements or omissions or inaccuracies in the
representations and warranties herein or other breaches which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.
(b) If the indemnification provided for in this Section 9 is required
by its terms, but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an Offeror Indemnified Party under Section
9.1(b) in respect of any losses, claims, damages, liabilities or expenses
referred to herein or therein, then the Placement Agent shall contribute to
the amount paid or payable by such Offeror Indemnified Party as a result of
any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits
received by the Offerors and the Placement Agent from the offering of such
Capital Securities, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Offerors and the Placement Agent in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein or other breaches which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations.
(c) The respective relative benefits received by the Offerors and the
Placement Agent shall be deemed to be in the same proportion, in the case
of the Offerors, as the total price paid to the Offerors for the Capital
Securities sold by the Offerors to the Purchasers (net of the compensation
paid to the Placement Agent hereunder, but before deducting expenses), and
in the case of the Placement Agent, as the compensation received by it
bears to the total of such amounts paid to the Offerors and received by the
Placement Agent as compensation. The relative fault of the Offerors and the
Placement Agent shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged untrue statement of a material fact or the inaccurate
or the alleged inaccurate representation and/or warranty relates to
information supplied by the Offerors or the Placement Agent and the
parties' relative intent, knowledge, access to information and opportunity
to
21
correct or prevent such statement or omission. The amount paid or payable
by a party as a result of the losses claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 9.2, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim. The provisions set forth in Section 9.2 with
respect to notice of commencement of any action shall apply if a claim for
contribution is made under this Section 9.3; provided, however, that no
additional notice shall be required with respect to any action for which
notice has been given under Section 9.2 for purposes of indemnification.
The Offerors and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 9.3 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in this Section 9.3.
The amount paid or payable by a Placement Agent Indemnified Party or
Offeror Indemnified Party, as the case may be, as a result of the losses,
claims, damages, liabilities or expenses referred to in this Section 9.3
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such Placement Agent
Indemnified Party or Offeror Indemnified Party, as the case may be, in
connection with investigating or defending any such action or claim. In no
event shall the liability of the Placement Agent hereunder be greater in
amount than the dollar amount of the compensation (net of payment of all
expenses) received by the Placement Agent upon the sale of the Capital
Securities giving rise to such indemnification obligation. No person found
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person
who was not found guilt of such fraudulent misrepresentation.
9.4. Additional Remedies. The indemnity and contribution agreements
contained in this Section 9 are in addition to any liability that the
Offerors may otherwise have to any Placement Agent Indemnified Party.
SECTION 10 RIGHTS AND RESPONSIBILITIES OF PLACEMENT AGENT
10.1. Responsibilities For Memorandum. The Offerors have prepared the
Memorandum and the Placement Agent shall not be deemed responsible for any
information contained therein (except for the Placement Agent Information). The
Placement Agent undertakes no responsibility of any kind on behalf of any
Purchaser (including fiduciary responsibility) and the Placement Agent is not
acting on behalf of any Purchaser.
10.2. Reliance. In performing its duties under this Agreement, the
Placement Agent shall be entitled to rely upon any notice, signature or writing
which it shall in good faith believe to be genuine and to be signed or presented
by a proper party or parties. The Placement Agent may rely upon any opinions or
certificates or other documents delivered by the Offerors or their counsel or
designees to either the Placement Agent or the Purchasers.
10.3. Rights of Placement Agent. In connection with the performance of its
duties under this Agreement, the Placement Agent shall not be liable for any
error of judgment or any action taken or omitted to be taken unless the
Placement Agent was grossly negligent, acted in
22
bad faith or engaged in willful misconduct in connection with such performance
or non-performance. No provision of this Agreement shall require the Placement
Agent to expend or risk its own funds or otherwise incur any financial liability
on behalf of the Purchasers in connection with the performance of any of their
duties hereunder. The Placement Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement.
SECTION 11 MISCELLANEOUS
11.1. Notices. Prior to the Closing, and thereafter with respect to matters
pertaining to this Agreement only, all notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier or overnight air courier guaranteeing next
day delivery:
if to the Placement Agent, to:
First Tennessee Capital Markets
845 Crossover Lane, Suite 150
Memphis, Tennessee 38117
Telecopier: (901) 766-4706
Telephone: (800) 456-5460
Attention: James D. Wingett
with a copy to:
Lewis, Rice & Fingersh, L.C.
500 North Broadway, Suite 2000
St. Louis, Missouri 63102
Telecopier: (314) 241-6056
Telephone: (314) 444-7600
Attn: Thomas C. Erb, Esq.
if to the Offerors, to:
North Country Financial Corporation
130 South Cedar Street
Manistique, Michigan 49854
Telecopier: (906) 341-8702
Telephone: (906) 341-7171
Attn: Ronald G. Ford
with a copy to:
Varnum, Riddering, Schmidt & Howlett, LLP
333 Bridge Street, N.W., Suite 1700
Grand Rapids, Michigan 49504
Telecopier: (616) 336-7000
Telephone: (616) 336-6000
Attn: Donald L. Johnson, Esq.
23
All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; the next business day after being telecopied; or the next business day
after timely delivery to a courier, if sent by overnight air courier
guaranteeing next day delivery. From and after the Closing, the foregoing notice
provisions shall be superseded by any notice provisions of the Operative
Documents under which notice is given. The Placement Agent, the Company, and
their respective counsel, may change their respective notice addresses from time
to time by written notice to all of the foregoing persons.
11.2. Parties in Interest, Successors and Assigns. This Agreement is made
solely for the benefit of the Placement Agent, the Purchasers and the Offerors
and any person controlling the Placement Agent, the Purchasers or the Offerors
and their respective executors, administrators, successors and assigns; and no
other person shall acquire or have any right under or by virtue of this
Agreement. This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties, including without limitation and
without the need for an express assignment, subsequent holders of Capital
Securities.
11.3. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
11.4. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
11.5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAWS PERTAINING TO CONFLICTS OF
LAWS) OF THE STATE OF MICHIGAN.
11.6. Entire Agreement. This Agreement, together with the other Operative
Documents and the Engagement Letter by and between the Offerors and the
Placement Agent, dated February 17, 1999 (the "Engagement Letter"), is intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement, together with
the other Operative Documents, supersedes all prior agreements and
understandings between the parties with respect to such subject matter;
provided, however, that this Agreement does not supersede the terms of the
Engagement Letter and the terms hereof are supplementary to the terms of the
Engagement Letter.
24
11.7. Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected, it
being intended that all of the Placement Agent's and the Purchasers' rights and
privileges shall be enforceabl to the fullest extent permitted by law.
11.8. Public Disclosure. The Offerors each covenant that it will take all
reasonable actions necessary to keep the Placement Agent's and each Purchaser's
identity confidential, and shall not disclose the Purchaser's identity as an
investor in the offering contemplated hereby in any public announcement,
governmental filing or otherwise without the Purchaser's prior written consent
unless such disclosure is compelled by law or by order of a court of competent
jurisdiction, in which case prior t making such disclosure the Offerors shall
give written notice to the Placement Agent and the Purchaser describing in all
reasonable detail the proposed content of such disclosure and will afford the
Placement Agent and the Purchaser in good faith an opportunity to suggest
modifications in the form and substance of such proposed disclosure.
11.9. Survival. The Placement Agent and the Offerors, respectively, agree
that the representations, warranties and agreements made by each of them in this
Agreement and in any certificate or other instrument delivered pursuant hereto
shall remain in full force and effect and shall survive the delivery and payment
for the Capital Securities.
[SIGNATURES APPEAR ON NEXT PAGE.]
25
If this Agreement is satisfactory to you, please so indicate by signing the
acceptance of this Agreement and deliver such counterpart to the Offerors
whereupon this Agreement will become binding between us in accordance with its
terms.
Very truly yours,
NORTH COUNTRY FINANCIAL CORPORATION
By: /s/ Ronald G. Ford
Name: Ronald G. Ford
Title: Chairman and Chief Executive Officer
NORTH COUNTRY CAPITAL TRUST
By: /s/ Ronald G. Ford
Name: Ronald G. Ford
Title: Administrative Trustee
FIRST TENNESSEE CAPITAL MARKETS,
a division of First Tennessee Bank, N.A.,
as Placement Agent (on behalf of itself and
the Purchasers)
By: /s/ James D. Wingett
Name: James D. Wingett
Title: Senior Vice President
26
EXHIBIT A
LIST OF PURCHASERS
See attached
A-1
EXHIBIT B
FORM OF SUBSCRIPTION AGREEMENT
See attached
B-1
EXHIBIT C-1
VARNUM, RIDDERING, SCHMIDT & HOWLETT, L.L.P. OPINION MATTERS
[For purposes of this Exhibit C-1, the term "Memorandum" shall have the
same meaning as used in the accompanying Purchase Terms Agreement and shall
include all documents incorporated by reference or deemed incorporated by
reference therein.]
1. The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Michigan, and is duly
registered as a bank holding company under the BHC Act. Each of the
Subsidiaries is duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation. Each of the Company
and the Subsidiaries has full corporate power and authority to own or lease
its properties and to conduct its business as such business is described in
the Memorandum and is currently conducted in all material respects. To the
best of such counsel's knowledge, all outstanding shares of capital stock
of the Subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable except to the extent such shares may be deemed
assessable under Section 201 of the Michigan Banking Code of 1969, as
amended and 12 U.S.C. Section 1831o and, to the best of such counsel's
knowledge, except as disclosed in the Memorandum, there are no outstanding
rights, options or warrants to purchase any such shares or securities
convertible into or exchangeable for any such shares, other than options to
purchase 4,800 shares of common stock of the Company granted to certain
directors of the Company on April 20, 1999.
2. The capital stock, Debentures and Guarantee of the Company and the
equity securities of the Trust conform to the description thereof contained
in the Memorandum in all material respects. To the best of such counsel's
knowledge, the capital stock of the Company authorized and issued as of
March 31, 1999 is as set forth under the caption "Capitalization" in the
Memorandum, has been duly authorized and validly issued, and is fully paid
and nonassessable. To the best of such counsel's knowledge, there are no
outstanding rights, options or warrants to purchase, no other outstanding
securities convertible into or exchangeable for, and no commitments, plans
or arrangements to issue, any shares of capital stock of the Company or
equity securities of the Trust, except as described or referred to in the
Memorandum, other than options to purchase 4,800 shares of common stock of
the Company granted to certain directors of the Company on April 20, 1999.
3. The issuance, sale and delivery of the Capital Securities and
Debentures in accordance with the terms and conditions of the Agreement,
the Subscription Agreements and the Indenture have been duly authorized by
all necessary actions of the Offerors. All of the Capital Securities have
been duly and validly authorized and, when delivered in accordance with the
Agreement and the Subscription Agreements, will be duly and validly issued,
fully paid and nonassessable, and wil conform to the description thereof in
the Memorandum and the Trust Agreement. There are no preemptive or other
rights to subscribe for or to purchase, and other than as disclosed in the
Memorandum no
C-1-1
restrictions upon the voting or transfer of, any shares of capital stock or
equity securities of the Offerors or the Subsidiaries pursuant to the
corporate articles of incorporation or charter, by-laws or other governing
documents (including without limitation, the Trust Agreement) of the
Offerors o the Subsidiaries, or, to the best of such counsel's knowledge,
any agreement or other instrument to which either Offeror or any of the
Subsidiaries is a party or by which either Offeror or any of the
Subsidiaries may be bound.
4. The Offerors have all requisite corporate and trust power to enter
into and perform their obligations under the Agreement and the Subscription
Agreements, and the Agreement and the Subscription Agreements have been
duly and validly authorized, executed and delivered by the Offerors and
constitute the legal, valid and binding obligations of the Offerors
enforceable in accordance with their terms, except as the enforcement
thereof may be limited by general principles of equity and by bankruptcy or
other laws relating to or affecting creditors' rights generally, and except
as the indemnification and contribution provisions thereof may be limited
under applicable laws and certain remedies may not be available in the case
of a non-material breach.
5. Each of the Indenture, the Trust Agreement and the Guarantee has
been duly authorized, executed and delivered by the Company, and is a valid
and legally binding obligation of the Company enforceable in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other laws affecting the
rights and remedies of creditors generally and of general principles of
equity.
6. The Debentures have been duly authorized, executed and delivered by
the Company, are entitled to the benefits of the Indenture and are legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and other
laws affecting the rights and remedies of creditors generally and of
general principles of equity.
7. The Expense Agreement has been duly authorized, executed and
delivered by the Company, and is a valid and legally binding obligation of
the Company enforceable in accordance with its terms, subject to the effect
of bankruptcy, insolvency, reorganization, receivership, moratorium and
other laws affecting the rights and remedies of creditors generally and of
general principles of equity.
8. To the best of such counsel's knowledge, neither the Offerors nor
Subsidiaries is in breach or violation of, or default under, with or
without notice or lapse of time or both, its corporate charter, by-laws or
governing document (including without limitation, the Trust Agreement). The
execution, delivery and performance of this Agreement and the Subscription
Agreements and the consummation of the transactions contemplated by this
Agreement, the Subscription Agreements and the Trust Agreement do not and
will not conflict with, result in the creation or imposition of any
material lien,
C-1-2
claim, charge, encumbrance or restriction upon any property or assets of
the Offerors or the Subsidiaries or the Capital Securities pursuant to, or
constitute a material breach or violation of, or constitute a material
default under, with or without notice or lapse of time or both, any of the
terms, provisions or conditions of the articles of incorporation or
charter, by-laws or governing document (including without limitation, the
Trust Agreement) of the Offerors or the Subsidiaries, or to the best of
such counsel's knowledge, any material contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease, franchise, license or any
other agreement or instrument to which the Offerors or the Subsidiaries is
a party or by which any of them or any of their respective properties may
be bound or any order, decree, judgment, franchise, license, Permit, rule
or regulation of any court, arbitrator, government, or governmental agency
or instrumentality, domestic or foreign, known to such counsel having
jurisdiction over the Offerors or the Subsidiaries or any of their
respective properties which, in each case, is material to the Offerors and
the Subsidiaries on a consolidated basis. Except for filings, registrations
or qualifications that may be required by state securities laws, no
authorization, approval, consent or order of, or filing, registration or
qualification with, any person (including, without limitation, any court,
governmental body or authority) is required under Michigan law in
connection with the transactions contemplated by the Agreement in
connection with the offer and sale of the Capital Securities as
contemplated by the Agreement and the Memorandum.
9. Except as set forth in the Memorandum, to the best of such
counsel's knowledge, (i) no action, suit or proceeding at law or in equity
is pending or threatened to which the Offerors or the Subsidiaries is or
may be a party, and (ii) no action, suit or proceeding is pending or
threatened against or affecting the Offerors or the Subsidiaries or any of
their properties, before or by any court or governmental official,
commission, board or other administrative agency, authority or body, or any
arbitrator, wherein an unfavorable decision, ruling or finding could
reasonably be expected to have a material adverse effect on the
consummation of the Agreement or the issuance and sale of the Capital
Securities as contemplated therein or the condition (financial or
otherwise), earnings, affairs, business, or results of operations of the
Offerors and the Subsidiaries on a consolidated basis or which is required
to be disclosed in the Memorandum and is not so disclosed.
10. No authorization, approval, consent or order of or filing,
registration or qualification with, any person (including, without
limitation, any court, governmental body or authority) is required in
connection with the transactions contemplated by the Agreement, the
Subscription Agreements, the Trust Agreement and the Memorandum, except (i)
such as may be required under state securities laws and (ii) the filing of
a notice on Form D with the Securities and Exchange Commission pursuant to
17 C.F.R. ss.239.500.
11. To the best of such counsel's knowledge, there are no contracts,
agreements, leases or other documents of a character required to be
disclosed in the Memorandum that are not so disclosed or filed.
C-1-3
12. The statements under the captions "Description of the Capital
Securities," "Description of the Subordinated Debentures," "Description of
the Guarantee," "Relationship Among the Capital Securities, the
Subordinated Debentures and the Guarantee," "Certain Federal Income Tax
Consequences," and "Certain ERISA Considerations" in the Memorandum or
incorporated therein by reference, and the statements under Part I, Item 1,
"Business," in the Company's Annual Report on Form 10- for the year ended
December 31, 1998, insofar as such statements constitute a summary of legal
and regulatory matters, documents or instruments referred to therein, are
accurate descriptions of the matters summarized therein in all material
respects and fairly present the information called for with respect to such
legal matters, documents and instruments, other than financial and
statistical data, as to which said counsel shall not be required to express
any opinion or belief.
13. Except as described in or contemplated by the Memorandum, to the
best of such counsel's knowledge, there are no contractual encumbrances or
restrictions, or material legal restrictions, required to be described
therein on the ability of the Subsidiaries (A) to pay dividends or make any
other distributions on their capital stock or to pay indebtedness owed to
the Offerors or (B) to make any loans or advances to, or investments in,
the Offerors.
14. It is not necessary in connection with the offering, sale and
delivery of the Capital Securities, Debentures and the Guarantee Agreement
to register the same under the Securities Act under the circumstances
contemplated in the Agreement, the Subscription Agreements and the
Memorandum.
Such counsel shall also confirm that, in connection with the preparation of
the Memorandum, such counsel has participated in conferences with officers and
representatives of the Offerors and with their independent public accountants
and with the Placement Agent and counsel for the Placement Agent, at which
conferences such counsel made inquiries of such officers, representatives and
accountants and discussed in detail the contents of the Memorandum and the
documents incorporated therein by reference (without taking further action to
verify independently the statements made in the Memorandum, and without assuming
responsibility for the accuracy or completeness of such statements, except to
the extent expressly provided above) and such counsel has no reason to believe
that the Memorandum or any amendment or supplement thereto or the documents
incorporated therein by reference (except for the financial statements and
related schedules and statistical data included therein or omitted therefrom as
to which such counsel need express no opinion), at the time such Memorandum or
any such amended or supplemented Memorandum was issued and at the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made.
C-1-4
EXHIBIT C-2
RICHARDS, LAYTON & FINGER OPINION MATTERS
1. The Trust has been duly created and is validly existing in good standing
as a business trust under the Delaware Business Trust Act and, under the Trust
Agreement and the Delaware Business Trust Act, has the trust power and authority
to conduct its business as described in the Memorandum.
2. The Trust Agreement is a legal, valid and binding agreement of the
Company and the Trustees, and is enforceable against the Company and the
Trustees, in accordance with its terms.
3. Under the Trust Agreement and the Delaware Business Trust Act, the
execution and delivery of this Agreement by the Trust, and the performance by
the Trust of its obligations thereunder, have been authorized by all requisite
trust action on the part of the Trust.
4. The Capital Securities have been duly authorized by the Trust Agreement,
and when issued and sold in accordance with the Trust Agreement, the Capital
Securities will be, subject to the qualifications set forth in paragraph (5)
below, fully paid and nonassessable beneficial interests in the assets of the
Trust and entitled to the benefits of the Trust Agreement. The form of
certificates to evidence the Capital Securities, attached as Exhibit C to the
Trust Agreement, has been approved by the Trust and is in due and proper form
and complies with all applicable requirements of the Delaware Business Trust
Act.
5. Holders of Capital Securities, as beneficial owners of the Trust, will
be entitled to the same limitation on personal liability extended to
shareholders of private, for-profit corporations organized under the General
Corporation Law of the State of Delaware. Such opinion may note that the holders
of Capital Securities may be obligated to make payments as set forth in the
Trust Agreement.
6. Under the Delaware Business Trust Act and the Trust Agreement, the
issuance of the Capital Securities is not subject to preemptive rights.
7. The issuance and sale by the Trust of the Trust Securities, the
execution, delivery and performance by the Trust of this Agreement, and the
consummation of the transactions contemplated by this Agreement, do not violate
(a) the Trust Agreement, or (b) any applicable Delaware law, rule or regulation.
Such opinion may state that it is limited to the laws of the State of
Delaware and that the opinion expressed in paragraph (ii) above is subject to
the effect upon the Trust Agreement of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent
C-2-1
conveyance and other similar laws relating to or affecting the rights and
remedies of creditors generally, (ii) principles of equity, including
applicable law relating to fiduciary duties (regardless of whether
considere and applied in a proceeding in equity or at law), and (iii) the
effect of applicable public policy on the enforceability of provisions
relating to indemnification or contribution.
C-2-2
EXHIBIT C-3
FORM OF ACCOUNTANT'S LETTER
[To be dated date of Purchase Terms Agreement and Closing Date]
First Tennessee Capital Markets
845 Crossover Lane, Ste. 150
Memphis, TN 38117
Attn: James D. Wingett
Dear Sirs:
We have audited the consolidated balance sheets of North Country Financial
Corporation (the Company) as of December 31, 1998 and 1997 and the consolidated
statements of income, changes in shareholders' equity, and cash flows for the
years then ended included in the Offering Memorandum, dated May 6, 1999 (the
Offering Memorandum) for the private placement sale of $15,000,000 of capital
securities to be issued by North Country Capital Trust, a subsidiary of the
Company, to qualified buyers; our reports with respect hereto are incorporated
by reference in that Offering Memorandum. The consolidated statements of income,
changes in shareholders' equity and cash flows for the year ended December 31,
1996, were audited by other auditors.
In connection with the Offering Memorandum:
1. We are independent certified public accountants with respect to the
Company under rule 101 of the AICPA's Code of Professional Conduct and
its interpretations and rulings.
2. We have not audited any financial statements of the Company as of any
date or for any period subsequent to December 31, 1998; although we
have conducted an audit for the year ended December 31, 1998, the
purpose (and therefore the scope) of the audit was to enable us to
express our opinion on the financial statements as of December 31,
1998, and for the two years then ended, but not on the financial
statements for any interim period within that year. Therefore, we are
unable to and do not express any opinion on the consolidated financial
position, results of operations, or cash flows as of any date or for
any period subsequent to December 31, 1998.
3. For purposes of this letter, at your request, we have (i) read the
following sections of the Offering Memorandum: "Offering Memorandum
Summary -- The Company," "Offering Memorandum Summary -- Selected
Historical Financial Data," and "Capitalization," and (ii) read the
following sections of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 (10-K): Part I,
C-3-1
Item 1 "Business" (including "Supervision and Regulation" and
"Selected Statistical Information"), Part I, Item 6 "Selected
Financial Data," and Part I, Item 7A "Quantitative and Qualitative
Disclosures About Market Risk," (iii) read the following sections of
the Company's 1998 Annual Report to Shareholders (Annual Report):
"Comparative Highlights," "Five Year Comparisons," "Selected Financial
Data" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations," (iv) read the Current Report on Form 8-K
filed April 28, 1999 (8-K), and (v) performed the following
procedures:
a. With respect to information set forth in the above noted sections
of the Offering Memorandum, 10-K and/or Annual Report as of, and
for the years ended, December 31, 1998, 1997 and 1996, and which
also was included in the Company's audited financial statements,
we compared such information to the Company's audited financial
statements and found them to be in agreement.
b. With respect to per share data and ratios set forth in the above
noted sections of the Offering Memorandum, 10-K and/or Annual
Report as of, and for the years ended, December 31, 1998, 1997
and 1996, we recalculated the amount or percent, as applicable,
using information contained in the Company's audited financial
statements (or elsewhere, if not in audited financial statements)
and we found no differences.
c. With respect to unaudited three month information as of, and for
the three months ended, March 31, 1999 and 1998, set forth in the
above noted sections of the Offering Memorandum and/or 8-K, we
compared such information to the Company's unaudited condensed
consolidated financial statements and/or to the Company's
internal accounting records and found them to be in agreement.
d. With respect to per share data and ratios set forth in the above
noted sections of the Offering Memorandum and/or 8-K as of, and
for the three months ended March 31, 1999 and 1998, we
recalculated the amount or percent, as applicable, using
information contained in the Company's unaudited condensed
consolidated financial statements and/or to the Company's
internal accounting consolidated records and we found no
differences.
e. Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether the
unaudited condensed consolidated financial statements referred to
in c. above are in conformity with generally accepted accounting
principles applied on a basis substantially consistent with that
of the audited consolidated financial statements included in the
10-K and/or Annual Report. Those officials stated that the
unaudited condense consolidated financial statements are in
conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited
financial statements.
C-3-2
4. Our audit of the consolidated financial statements for the periods
referred to in paragraph 2 of this letter comprised audit tests and
procedures deemed necessary for the purpose of expressing an opinion
on such financial statements taken as a whole. For none of the periods
referred to therein, or any other period, did we perform audit tests
for the purpose of expressing an opinion on individual balances of
accounts or summaries of selected transactions or ratios, and,
accordingly, we express no opinion thereon.
5. This letter is solely for the information of the addressee in
conducting and documenting their investigation of the affairs of the
Company in connection with the offering of securities covered by the
Offering Memorandum, and it is not to be used, circulated, quoted, or
otherwise referred to for any other purpose, including but not limited
to the purchase or sale of securities, nor is it to be filed with or
referred to in whole or part in the Offering Memorandum or any other
document (although we acknowledge that the existence of this letter is
referred to in the Purchase Terms Agreement which is attached as an
Appendix to the Offering Memorandum). The addressee has taken
responsibility for the sufficiency of these procedures for their
purposes.
Very truly yours,
C-3-3
EXHIBIT D
COMPANY SUBSIDIARIES
North Country Capital Trust
North Country Bank and Trust
First Manistique Agency, Inc.
First Rural Relending Company
NCB Real Estate Company
North Country Financial Group, Inc.
North Country Air Services, Inc.
D-1
EXHIBIT 10.2
CERTIFICATE OF TRUST
OF
NORTH COUNTRY CAPITAL TRUST
This Certificate of Trust of North Country Capital Trust (the "Trust") is
being duly executed and filed by Wilmington Trust Company, a Delaware banking
corporation, Ronald G. Ford, Sherry L. Littlejohn and Paul J. Hinkson, each an
individual, as trustees, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801, et seq.) (the "Act").
1. NAME. The name of the business trust being formed hereby is North
Country Capital Trust.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as of
its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust in accordance with Section 3811(a) of the Act.
WILMINGTON TRUST COMPANY, as Trustee
By: /s/ Patricia A. Evans
Name: Patricia A. Evans
Title: Financial Services Officer
/s/ Ronald G. Ford
Ronald G. Ford, as Trustee
/s/ Sherry L. Littlejohn
Sherry L. Littlejohn, as Trustee
/s/ Paul J. Hinkson
Paul J. Hinkson, as Trustee
::ODMA\PCDOCS\GRR\281323\1
EXHIBIT 10.3
This Capital Security is a Global Capital Securities Certificate within the
meaning of the Trust Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company, a New York corporation (the "DTC") or a
nominee of the DTC. This Capital Security is exchangeable for Capital Securities
Certificates registered in the name of a person other than the DTC or its
nominee only in the limited circumstances described in the Trust Agreement and
no transfer of this Capital Security (other than a transfer of this Capital
Security as a whole by the DTC to a nominee of the DTC or by a nominee of the
DTC) may be registered except in limited circumstances described in the Trust
Agreement.
Unless this Capital Security is presented by an authorized representative of the
DTC to North Country Capital Trust or its agent for registration of transfer,
exchange or payment, and any Capital Securities Certificate issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of the DTC (and any payment hereon is made to Cede & Co. or to
such other entity as requested by an authorized representative of the DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL, since the registered owner hereof, Cede & Co., has an interest
herein.
Certificate Number P-1 CUSIP NO. 658787 AA 4
Number of Capital Securities: 7,000
Certificate Evidencing Capital Securities
of
North Country Capital Trust
Floating Rate Capital Securities
(Liquidation amount $1,000 per Capital Security)
North Country Capital Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of Seven Thousand (7,000) Capital
Securities of the Trust representing an undivided beneficial interest in the
assets of the Trust and designated the North Country Capital Floating Rate
Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). 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 as provided in
Section 5.04 of the Trust Agreement (as defined below). The designations,
rights, privileges, restrictions, preferences and other terms and provisions of
the Capital Securities are set forth in, and this certificate and the Capital
Securities represented hereby and issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
trust dated as of May 14, 1999, among North Country Financial Corporation, a
Michigan corporation, as Depositor, Wilmington Trust Company, as Property
Trustee, the Administrative Trustees named therein, and the holders, from time
to time, of undivided beneficial interests in the assets of the Trust, as the
same may be amended from time to time (the "Trust Agreement") including the
designation of the terms of Capital Securities as set forth therein. The Holder
is entitled to the benefits of the Guarantee Agreement entered into by North
Country Financial Corporation, a Michigan corporation, and Wilmington Trust
Company as guarantee trustee, dated as of May 14, 1999 (the "Guarantee") to the
extent provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate as of the date hereof.
Dated: May 14, 1999 NORTH COUNTRY CAPITAL TRUST
By: /s/ Ronald G. Ford
Name: Ronald G. Ford
Title: Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Floating Rate Capital Securities referred to in the
Amended and Restated Trust Agreement.
WILMINGTON TRUST COMPANY,
as Authentication Agent and Registrar
By: /s/ Denise M. Geran
Name: Denise M. Geran
Title: Senior Financial Services Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security 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(s) Guaranteed: The signature(s) should be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL 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, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH NORTH COUNTRY FINANCIAL
CORPORATION (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) AS LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) 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, (E) TO AN INDIVIDUAL ACCREDITED
INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH (A)(5) OR (6) OF RULE 501 UNDER THE
SECURITIES ACT, RESIDING IN ONE OF THE JURISDICTIONS AUTHORIZED BY THE COMPANY,
THAT IS PURCHASING THE CAPITAL SECURITIES FOR ITS OWN ACCOUNT 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 UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE TRANSFEROR DELIVER TO
THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF APPENDIX D
TO THE OFFERING MEMORANDUM DATED MAY 7, 1999, AND (iii) PURSUANT TO CLAUSE (E)
TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST OR OTHER TRANSFER AGENT A
QUESTIONNAIRE AND INVESTMENT AGREEMENT, EACH OF WHICH IS AVAILABLE FROM THE
COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
::ODMA\PCDOCS\GRR\291631\1
EXHIBIT 10.4
This Capital Security is a Global Capital Securities Certificate within the
meaning of the Trust Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company, a New York corporation (the "DTC") or a
nominee of the DTC. This Capital Security is exchangeable for Capital Securities
Certificates registered in the name of a person other than the DTC or its
nominee only in the limited circumstances described in the Trust Agreement and
no transfer of this Capital Security (other than a transfer of this Capital
Security as a whole by the DTC to a nominee of the DTC or by a nominee of the
DTC) may be registered except in limited circumstances described in the Trust
Agreement.
Unless this Capital Security is presented by an authorized representative of the
DTC to North Country Capital Trust or its agent for registration of transfer,
exchange or payment, and any Capital Securities Certificate issued is registered
in the name of Cede & Co. or in such other name as is requested by an authorized
representative of the DTC (and any payment hereon is made to Cede & Co. or to
such other entity as requested by an authorized representative of the DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL, since the registered owner hereof, Cede & Co., has an interest
herein.
Certificate Number P-2 CUSIP NO. 658787 AB 2
Number of Capital Securities: 5,450
Certificate Evidencing Capital Securities
of
North Country Capital Trust
Floating Rate Capital Securities
(Liquidation amount $1,000 per Capital Security)
North Country Capital Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of Five Thousand Four Hundred Fifty
(5,450) Capital Securities of the Trust representing an undivided beneficial
interest in the assets of the Trust and designated the North Country Capital
Floating Rate Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Capital Securities"). 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
as provided in Section 5.04 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities are set forth in, and this certificate and
the Capital Securities represented hereby and issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the trust dated as of May 14, 1999, among North Country Financial
Corporation, a Michigan corporation, as Depositor, Wilmington Trust Company, as
Property Trustee, the Administrative Trustees named therein, and the holders,
from time to time, of undivided beneficial interests in the assets of the Trust,
as the same may be amended from time to time (the "Trust Agreement") including
the designation of the terms of Capital Securities as set forth therein. The
Holder is entitled to the benefits of the Guarantee Agreement entered into by
North Country Financial Corporation, a Michigan corporation, and Wilmington
Trust Company as guarantee trustee, dated as of May 14, 1999 (the "Guarantee")
to the extent provided therein. The Trust will furnish a copy of the Trust
Agreement and the Guarantee to the Holder without charge upon written request to
the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate as of the date hereof.
Dated: May 14, 1999 NORTH COUNTRY CAPITAL TRUST
By: /s/ Ronald G. Ford
Name: Ronald G. Ford
Title: Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Floating Rate Capital Securities referred to in the
Amended and Restated Trust Agreement.
WILMINGTON TRUST COMPANY,
as Authentication Agent and Registrar
By: /s/ Denise M. Geran
Name: Denise M. Geran
Title: Senior Financial Services Officer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security 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(s) Guaranteed: The signature(s) should be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL 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, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH NORTH COUNTRY FINANCIAL
CORPORATION (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) AS LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) 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, (E) TO AN INDIVIDUAL ACCREDITED
INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH (A)(5) OR (6) OF RULE 501 UNDER THE
SECURITIES ACT, RESIDING IN ONE OF THE JURISDICTIONS AUTHORIZED BY THE COMPANY,
THAT IS PURCHASING THE CAPITAL SECURITIES FOR ITS OWN ACCOUNT 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 UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE TRANSFEROR DELIVER TO
THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF APPENDIX D
TO THE OFFERING MEMORANDUM DATED MAY 7, 1999, AND (iii) PURSUANT TO CLAUSE (E)
TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST OR OTHER TRANSFER AGENT A
QUESTIONNAIRE AND INVESTMENT AGREEMENT, EACH OF WHICH IS AVAILABLE FROM THE
COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
::ODMA\PCDOCS\GRR\293405\1
EXHIBIT 10.5
THE DEBENTURES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. SUCH DEBENTURES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT.
NORTH COUNTRY FINANCIAL CORPORATION
Floating Rate Junior Subordinated Debenture
CUSIP NO.: 658788 AA 2 (JR SUB DEB FLTG RATE)
CUSIP NO.: 658788 AB 0 (JR SUB DEB FLTG RATE ACCD INVS)
No. 1 $12,836,000
North Country Financial Corporation, a Michigan corporation (herein called
the "Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to North
Country Capital Trust, the principal sum of TWELVE MILLION EIGHT HUNDRED THIRTY
SIX THOUSAND DOLLARS ($12,836,000) on May 14, 2029 (the "Stated Maturity").
The Company further promises to pay interest on said principal sum from May
14, 1999 or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on February 14,
May 14, August 14 and November 14 of each year, commencing August 14, 1999, at a
rate per annum of 7.50% beginning on (and including) the date of original
issuance and ending on (but excluding) August 14, 1999 and at a rate per annum
for each successive period beginning on (and including) August 14, 1999, and
each succeeding Interest Payment Date, and ending on (but excluding) the next
succeeding Interest Payment Date (each a "Distribution Period"), determined by
reference to 3- Month LIBOR, determined as described below, plus 2.50% applied
to the principal amount hereof, until the principal hereof is paid or duly
provided for or made available for payment, and on any overdue principal and
(without duplication) on any overdue installment of interest at the same rate
per annum, compounded quarterly, from the dates such amounts are due until they
are paid or made available for payment. As used herein, "Determination Date"
means the date that is two London Banking Days (i.e., a day in which dealings in
deposits in U. S. dollars are transacted in the London interbank market)
preceding the commencement of the relevant Distribution Period. The amount of
interest payable for any period less than a full interest period will be
computed on the basis of actual days elapsed and a 360-day year. In the event
that any date on which interest is payable on this Debenture is not a Business
Day, then a payment of the interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Debenture (or one or more Predecessor Securities, as defined in the Indenture)
is registered at the close of business on the Regular Record Date for such
interest installment, which shall be fifteen days prior to the day on which the
relevant Interest Payment Date occurs. Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Debenture (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date.
"3-Month LIBOR" as used herein, means the London interbank offered rate for
three-month, Eurodollar deposits determined by the Trustee (as defined in the
Indenture) in the following order of priority: (i) the rate (expressed as a
percentage per annum) for Eurodollar deposits having a three-month maturity that
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the particular
Determination Date ("Telerate Page 3750" means the display designated as "Page
3750" on the Dow Jones Telerate Service or such other page as may replace Page
3750 on that service or such other service or services as may be nominated by
the British Bankers' Association as the information
vendor for the purpose of displaying London interbank offered rates for U.S.
dollars deposits); (ii) if such rate does not appear on Telerate Page 3750 as of
11:00 a.m. (London time) on the Determination Date, 3-Month LIBOR will be the
arithmetic mean of the rates (expressed as percentages per annum) for Eurodollar
deposits having a three-month maturity that appear on Reruters Monitor Money
Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m. (London time) on such
Determination Date; (iii) if such rate does not appear on Reuters Page LIBO as
of 11:00 a.m. (London time) on the related Determination Date, the Trustee will
request the principal London offices of four leading banks in the London
interbank market to provide such banks' offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for
Eurodollar 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; (iv) if fewer than two
such quotations are provided as requested in clause (iii) above, the Trustee
will request four major New York City banks to provide such banks' offered
quotations (expressed as percentages per annum) to leading European banks for
loans in Eurodollars 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 (v) if fewer than two such quotations
are provided as requested in clause (iv) 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 Eurodollar deposits having a
three-month maturity that initially appears on Telerate Page 3750 or Reuters
Page LIBO, as the cause may be, as of 11:00 a.m. (London time) on the related
Determination Date is superseded on the Telerate Page 3750 or Reuters Page LIBO,
as the case may be, by a corrected rate between 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 (as defined in the Indenture) for any Distribution
Period will at no time be higher than the maximum rate then permitted by
Michigan law as the same may be modified by United States law.
All percentages resulting from any calculations on the Debentures will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% or .09876545) being rounded to 9.87655% (or .0987655), and all dollar
amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upward).
So long as no event of default with respect to this Debenture has occurred
and is continuing, the Company shall have the right at any time during the term
of this Debenture, from time to time, to defer the payment of interest on such
Debenture from time to time for up to twenty consecutive quarters with respect
to each deferral period (each an "Extension Period"), during which period
interest will compound quarterly and the Company shall have the right to make
partial payments of interest on any Interest Payment Date, and at the end of
which Extension Period the Company shall pay all interest then accrued and
unpaid including any Additional Interest; provided, however, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Debenture as then in effect; provided further that during any such Extension
Period, the Company shall not, and shall cause any Subsidiary of the Company not
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
outstanding capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt security of the
Company ranking pari passu with or junior in interest to this Debenture or make
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary of the Company that by their terms rank pari passu
or junior in interest to this Debenture, (iii) sell, lease, license, transfer or
otherwise dispose of any asset or interest therein or (iv) with respect to the
Company, make any capital contributions or similar advances to its Subsidiaries;
provided, however, that the foregoing restrictions shall not prevent (a) any
such transaction (other than transactions described in clause (iv) above) in the
ordinary course of business or in immaterial amounts, (b) a reorganization of
Subsidiaries of the Company so long as the Company's percentage ownership
interest in such Subsidiaries does not decrease, (c) dividends or distributions
in Common Stock of the Company, (d) payments under the guarantee of the Company
with respect to payments of distributions and payments on liquidation or
redemption of the Capital Securities, but only in each case to the extent of
funds held by the Issuer thereof or under any other similar guarantee by the
Company with respect to any other securities of any of its Subsidiaries,
provided that the proceeds of the issuance of such securities were used to
purchase debt securities of the Company that rank pari passu with or junior to
this Debenture and (e) purchases of Common Stock of the Company in connection
with the issuance of Common Stock of the Company under any of the Company's
benefit plans for directors,
officers or employees. Prior to the termination of any such Extension Period,
the Company may further defer the interest payments, provided that no Extension
Period shall exceed twenty consecutive quarters or extend beyond the Stated
Maturity of this Debenture. Upon the termination of any such Extension Period
and upon the payment of all accrued and unpaid interest and any Additional
Interest then due, the Company may elect to begin a new Extension Period,
subject to the above requirements. No interest shall be due and payable during
an Extension Period, except at the end thereof but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest (to the extent that the payment of such interest
shall be legally enforceable) as provided in the Indenture, compounded quarterly
and calculated as set forth in the first paragraph of this Debenture, from the
dates on which amounts would otherwise have been due and payable until paid or
made available for payment. The Company shall give the Trustee and the
Administrative Trustees notice of its election to begin an Extension Period at
least two Business Days prior to the earliest of (i) the date interest on this
Debenture would have been payable except for the election to begin such
Extension Period or (ii) the next succeeding date such distributions on the
Trust Securities would have been payable except for the election to begin such
Extension Period.
In the event that the holders of the Capital Securities are owed 20
dividends in arrears, any individual holder has the right to ask the Trustee to
enforce its acceleration rights as outlined in the Indenture. The Trustee may or
may not elect to enforce such acceleration rights.
The principal and interest (including any Additional Interest) on this
Debenture shall be payable at the office or agency as the Company may designate
from time to time for that purpose in the United States, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made, except in the case of
Debentures in global form, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Debenture Register or (ii)
by transfer to an account maintained by the Person entitled thereto as specified
in the Debenture Register; provided that proper transfer instructions have been
received by the Regular Record Date.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, North Country Financial Corporation has caused this
instrument to be duly executed under its corporate seal.
Dated: May 14, 1999
NORTH COUNTRY FINANCIAL CORPORATION
By: /s/ Ronald G. Ford
Ronald G. Ford
President and Chief Executive Officer
ATTEST:
/s/ Paulette Demers
Paulette Demers
Corporate Secretary
Authentication:
This is one of the Debentures referred to in the within-mentioned
Indenture.
Dated: May 14, 1999 WILMINGTON TRUST COMPANY, as Trustee
By: /s/ Joseph B. Feil
Name: Joseph B. Feil
Title: Financial Services Officer
REVERSE OF DEBENTURE:
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its Floating Rate Junior Subordinated Debentures (herein
called the "Debentures"), limited in aggregate principal amount to $12,836,000
issued under an Indenture, dated as of May 14, 1999 (herein called the
"Indenture"), between the Company and Wilmington Trust Company, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trustee, the Company and the
Holders of the Debentures, and of the terms upon which the Debentures are, and
are to be, authenticated and delivered.
All terms used in this Debenture which are defined in the Indenture or in
the Trust Agreement attached as Annex A thereto shall have the meanings assigned
to them in the Indenture or the Trust Agreement, as the case may be.
At any time on or after May 14, 2009, the Company shall have the right,
subject to the terms and conditions of Article Twelve of the Indenture, to
redeem this Debenture at the option of the Company, without premium or penalty,
in whole at any time or in part from time to time, at the Redemption Price as
defined in Article 12 of the Indenture.
If a Special Event as defined in the Indenture shall occur and be
continuing prior to May 14, 2009, the Company shall have the right, subject to
the terms and conditions of Article Twelve of the Indenture, to redeem this
Debenture at the option of the Company, without premium or penalty, in whole but
not in part, within 90 days following the occurrence of such Special Event,
subject to the provisions of Section 1207 and other provisions of Article Twelve
of the Indenture, at the Redemption Price. Any redemption pursuant to this
paragraph will be made upon not less than 30 nor more than 60 days' notice, at
the Redemption Price. If the Debentures are only partially redeemed by the
Company, the Debentures will be redeemed pro rata.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Debentures shall occur and be
continuing, the principal of the Debentures may be declared due and payable in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for satisfaction and discharge and
defeasance at any time of the entire indebtedness of this Debenture upon
compliance by the Company with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of Holders of not less than a majority in aggregate principal
amount of the Outstanding Securities, to modify the Indenture in a manner
affecting the rights of the Holders of the Debentures; provided that no such
modification may, without the consent of the Holder of each Outstanding
Debenture affected thereby, (i) change the fixed maturity of the Debentures or
reduce
the principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or (ii) reduce the percentage of principal amount of the
Debentures, the Holders of which are required to consent to any such
modification of the Indenture; provided, that, so long as any of the Capital
Securities remains Outstanding, no such modification may be made that adversely
affects the Holders of the Capital Securities, and no termination of the
Indenture may occur, and no waiver of any Event of Default or compliance with
any covenant under the Indenture may be effective, without the prior consent of
the Holders of at least a majority of the aggregate Liquidation Amount (as
defined in the Trust Agreement) of the Outstanding Capital Securities unless and
until the principal of the Debentures and all accrued and unpaid interest
(including any Additional Interest) thereon have been paid in full. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Debentures at the time Outstanding, on behalf of the
Holders of all Debentures, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Debenture
shall be conclusive and binding upon such Holder and upon all future Holders of
this Debenture and of any Debenture issued upon the registration of transfer
hereof or in exchange therefore or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Debenture.
As provided in and subject to the provisions of the Indenture, if an Event
of Default with respect to the Debentures at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities may declare
the principal amount of all the Debentures to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given by Holders),
provided that, if upon an Event of Default the Trustee or such Holders fail to
declare the principal of all the Outstanding Securities to be immediately due
and payable, the holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee; and upon any
such declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Debentures shall become immediately due and
payable, provided that the payment of principal and interest (including any
Additional Interest) on such Debentures shall remain subordinated to the extent
provided in Article Eleven of the Indenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Debenture is registrable in the Debenture Register,
upon surrender of this Debenture for registration of transfer at the office or
agency of Wilmington Trust Company in Wilmington, Delaware, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to
Wilmington Trust Company, as the Debenture Registrar, duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company or Wilmington Trust Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS DEBENTURE 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, SUCH REGISTRATION.
THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS DEBENTURE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH NORTH COUNTRY FINANCIAL CORPORATION (THE
"COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS DEBENTURE (OR
ANY PREDECESSOR OF THIS DEBENTURE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) AS LONG AS THIS DEBENTURE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
DEBENTURE 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 (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR
(E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO IT, AND (ii) PURSUANT TO CLAUSE (D) TO REQUIRE
THAT THE TRANSFEROR DELIVER TO THE COMPANY A LETTER FROM THE TRANSFEREE
SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED MAY 7,
1999. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
EXHIBIT 10.6
NORTH COUNTRY CAPITAL TRUST
AMENDED AND RESTATED
TRUST AGREEMENT
among
NORTH COUNTRY FINANCIAL CORPORATION, as Depositor
and
WILMINGTON TRUST COMPANY, as Property Trustee
and
Ronald G. Ford,
Sherry L. Littlejohn,
and
Paul J. Hinkson, as Administrative Trustees
and
THE SEVERAL HOLDERS (as defined herein)
Dated as of May 14, 1999
TABLE OF CONTENTS
Article I. DEFINED TERMS...................................................... 1
Section 1.01 DEFINITIONS............................................... 1
Article II - ESTABLISHMENT OF THE TRUST....................................... 8
Section 2.01 NAME...................................................... 8
Section 2.02 OFFICE OF THE PROPERTY TRUSTEE; PRINCIPAL PLACE
OF BUSINESS...........................................8
Section 2.03 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES............................................. 9
Section 2.04 ISSUANCE OF THE CAPITAL SECURITIES........................ 9
Section 2.05 ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND
PURCHASE OF DEBENTURES............................... 9
Section 2.06 DECLARATION OF TRUST...................................... 9
Section 2.07 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.......... 9
Section 2.08 ASSETS OF TRUST...........................................12
Section 2.09 TITLE TO TRUST PROPERTY...................................12
Article III - PAYMENT ACCOUNT.................................................13
Section 3.01 PAYMENT ACCOUNT...........................................13
Article IV - DISTRIBUTIONS; REDEMPTION........................................13
Section 4.01 DISTRIBUTIONS.............................................13
Section 4.02 REDEMPTION................................................14
Section 4.03 SUBORDINATION OF COMMON SECURITIES........................15
Section 4.04 PAYMENT PROCEDURES........................................16
Section 4.05 TAX RETURNS AND REPORTS...................................16
Section 4.06 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST...............16
Section 4.07 PAYMENTS UNDER INDENTURE..................................16
Article V - TRUST SECURITIES CERTIFICATES.....................................17
Section 5.01 INITIAL OWNERSHIP.........................................17
Section 5.02 THE TRUST SECURITIES CERTIFICATES.........................17
Section 5.03 DELIVERY OF TRUST SECURITIES CERTIFICATES.................18
Section 5.04 GLOBAL CAPITAL SECURITY ..................................18
Section 5.05 REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY;
CERTAIN TRANSFERS AND EXCHANGES; CAPITAL
SECURITIES CERTIFICATES; SECURITIES ACT LEGENDS......19
Section 5.06 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.........................................22
Section 5.07 PERSONS DEEMED SECURITYHOLDERS............................22
Section 5.08 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES....22
Section 5.09 MAINTENANCE OF OFFICE OR AGENCY...........................22
Section 5.10 APPOINTMENT OF PAYING AGENT...............................23
Section 5.11 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR...............23
Section 5.12 RIGHTS OF SECURITYHOLDERS.................................23
Article VI - ACTS OF SECURITYHOLDERS; MEETINGS; VOTING........................25
Section 6.01 LIMITATIONS ON VOTING RIGHTS..............................25
Section 6.02 NOTICE OF MEETINGS........................................25
Section 6.03 MEETINGS OF CAPITAL SECURITYHOLDERS.......................25
Section 6.04 VOTING RIGHTS.............................................26
Section 6.05 PROXIES, ETC..............................................26
Section 6.06 SECURITYHOLDER ACTION BY WRITTEN CONSENT..................26
Section 6.07 RECORD DATE FOR VOTING AND OTHER PURPOSES.................26
Section 6.08 ACTS OF SECURITYHOLDERS...................................26
Section 6.09 INSPECTION OF RECORDS.....................................27
i
Article VII - REPRESENTATIONS AND WARRANTIES..................................27
Section 7.01 REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE
PROPERTY TRUSTEE.....................................27
Section 7.02 REPRESENTATIONS AND WARRANTIES OF PARENT..................28
Article VIII - THE TRUSTEES...................................................28
Section 8.01 CERTAIN DUTIES AND RESPONSIBILITIES.......................28
Section 8.02 CERTAIN NOTICES...........................................29
Section 8.03 CERTAIN RIGHTS OF PROPERTY TRUSTEE........................30
Section 8.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES....31
Section 8.05 MAY HOLD SECURITIES.......................................31
Section 8.06 COMPENSATION; INDEMNITY; FEES.............................31
Section 8.07 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES.............................................32
Section 8.08 CONFLICTING INTERESTS.....................................32
Section 8.09 CO-TRUSTEES AND SEPARATE TRUSTEE..........................32
Section 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.........33
Section 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR....................34
Section 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF A TRUSTEE................................35
Section 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR
OR TRUST.............................................35
Section 8.14 REPORTS BY PROPERTY TRUSTEE...............................35
Section 8.15 REPORTS TO THE PROPERTY TRUSTEE...........................36
Section 8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT..........36
Section 8.17 NUMBER OF TRUSTEES........................................36
Section 8.18 DELEGATION OF POWER.......................................36
Section 8.19 VOTING....................................................36
Article IX - TERMINATION AND LIQUIDATION......................................36
Section 9.01 TERMINATION UPON EXPIRATION DATE..........................36
Section 9.02 EARLY TERMINATION.........................................36
Section 9.03 TERMINATION...............................................37
Section 9.04 LIQUIDATION...............................................37
Section 9.05 MERGER, CONSOLIDATION, AMALGAMATION OR REPLACEMENT OF
THE TRUST............................................38
Article X - MISCELLANEOUS PROVISIONS..........................................39
Section 10.01 EXPENSE AGREEMENT.........................................39
Section 10.02 LIMITATION OF RIGHTS OF SECURITYHOLDERS...................39
Section 10.03 AMENDMENT.................................................39
Section 10.04 SEVERABILITY..............................................40
Section 10.05 GOVERNING LAW. ...........................................40
Section 10.06 PAYMENTS DUE ON NON-BUSINESS DAY..........................40
Section 10.07 SUCCESSORS................................................40
Section 10.08 HEADINGS..................................................40
Section 10.09 REPORTS, NOTICES AND DEMANDS..............................40
Section 10.10 AGREEMENT NOT TO PETITION.................................41
Section 10.11 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT....41
Section 10.12 RIGHTS UNDER INDENTURE....................................41
Section 10.13 EFFECTIVENESS.............................................41
Section 10.14 INTENTION OF THE PARTIES..................................41
Section 10.15 COUNTERPARTS..............................................42
Section 10.16 ACCEPTANCE OF TERMS OF TRUST AGREEMENT GUARANTEE
AND INDENTURE........................................42
ii
EXHIBITS
Original Trust Agreement ......................................................A
Form of Common Securities Certificate..........................................B
Form of Capital Securities Certificate.........................................C
iii
AMENDED AND RESTATED TRUST AGREEMENT, dated as of May 14, 1999, among (i)
North Country Financial Corporation, a Michigan corporation (including any
successors or assigns the "Depositor" or "Parent"), (ii) Wilmington Trust
Company, a banking corporation duly organized and existing under the laws of
Delaware, as trustee (the "Property Trustee" and, in its separate corporate
capacity and not in its capacity as Property Trustee, the "Bank"), (iii) Ronald
G. Ford, an individual, Sherry L. Littlejohn, an individual, and Paul J.
Hinkson, an individual, each of whose address is c/o North Country Financial
Corporation, 130 South Cedar Street, Manistique, Michigan 49854 (each, an
"Administrative Trustee" and collectively, the "Administrative Trustees") (the
Property Trustee and the Administrative Trustees being referred to collectively
as the "Trustees") and (iv) the several Holders, as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor, the Property Trustee and the Administrative
Trustees have heretofore duly declared and established a business trust pursuant
to the Delaware Business Trust Act by the entering into of that certain Trust
Agreement, dated as of April 22, 1999 (the "Original Trust Agreement"), and by
the execution and filing by the Trustees with the Secretary of State of the
State of Delaware of the Certificate of Trust, filed on April 22, 1999, the form
of which is attached as Exhibit A; and
WHEREAS, the Depositor and the Property Trustee desire to amend and restate
the Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the acquisition by the Trust (as defined herein) from
the Depositor of all of the right, title and interest in the Debentures (as
defined herein), (ii) the issuance of the Common Securities (as defined herein)
by the Trust to the Depositor and (iii) the issuance and sale of the Capital
Securities (as defined herein) by the Trust pursuant to the Placement Agreement
(as defined herein).
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other party and
for the benefit of the Security holders (as defined herein), hereby amends and
restates the Original Trust Agreement in its entirety and agrees as follows:
Article I.
DEFINED TERMS
Section 1.01 DEFINITIONS. For all purposes of this Trust Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have
the meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as
the case may be, of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Trust Agreement as a whole and
not to any particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on a Like Amount of Debentures
for such period.
"Additional Sums" has the meaning specified in Section 1005 of the
Indenture.
1
"Administrative Trustee" means each of the individuals identified as an
"Administrative Trustee" in the preamble to this Trust Agreement, solely in his
capacity as Administrative Trustee of the Trust formed and continued hereunder
and not in his individual capacity, or such Administrative Trustee's successor
in interest in such capacity, or any successor Trustee appointed as herein
provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Capital Security, the rules and procedures of the Clearing
Agency for such Capital Security, in each case to the extent applicable to such
transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises judging such Person a bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee sequestrator or
other similar official of such Person or of any substantial
part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60
consecutive days; or
(b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or of the consent by it
to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to
the filing of such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or
similar official of such Person or of any substantial part
of its property or the admission by it in writing of its
inability to pay its debts generally as they become due and
its willingness to be adjudicated as a bankrupt, or the
making by it of an assignment for the benefit of creditors,
or the taking of action by such Person in furtherance of any
such action.
"Bankruptcy Laws" has the meaning specified in Section 10.10.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors or a duly authorized committee thereof or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated and to be in full force and effect on the date of
such certification, and delivered to the Property Trustee.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day
on which banking institutions in the City of New York or Wilmington, Delaware
are authorized or obligated by law or executive order to remain closed, or (c) a
day on which the Property Trustee's Corporate Trust Office or the Debenture
Trustee's Corporate Trust Office is closed for business.
.
"Capital Securities Certificate" means a certificate evidencing ownership
of Capital Securities, substantially in the form attached as Exhibit C.
2
"Capital Security" or "Capital Securities" means undivided beneficial
interests in the assets of the Trust, having a Liquidation Amount of $1,000 per
Capital Security and having rights provided therefor in this Trust Agreement,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"Certificate Depository Agreement" means the agreement among the Trust, the
Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Capital Securities Certificates.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means the later of May 14, 1999, or the date of execution
and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Securities Certificate" means a certificate evidencing ownership of
the Common Securities, substantially in the form attached as Exhibit B.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $1,000 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Corporate Trust Office" means the principal office of either the Property
Trustee or the Debenture Trustee. So long as Wilmington Trust Company serves in
both capacities, such principal office is located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means the "Redemption Date" as defined in the
Indenture.
"Debenture Trustee" means Wilmington Trust Company, a banking corporation
duly organized and existing under the laws of the State of Delaware, or any
successor thereto.
"Debentures" means the up to $12,836,000 aggregate principal amount of the
Parent's Floating Rate Junior Subordinated Debentures, issued pursuant to the
Indenture.
"Definitive Capital Securities Certificates" means either or both (as the
context requires) of: (i) a Capital Securities Certificate issued as a Global
Capital Securities Certificate as provided in Section 5.02(b); and (ii) Capital
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.02(c).
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Section 3801, et seq., as it may be amended from time to time.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement and includes North Country Financial Corporation, in its capacity as
Holder of the Common Securities.
"Determination Date" for a Distribution Period is two London Banking Days
preceding the first day of such Determination Period.
"Direct Action" has the meaning specified in Section 5.12(c).
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"Distribution Date" has the meaning specified in Section 4.01(a).
"Distribution Period" with respect to a Capital Security is each successive
period from and including a Distribution Date (or August 14, 1999 in the case of
the initial Distribution Period) to but excluding the next Distribution Date or
the Stated Maturity, as the case may be; provided however, if such Distribution
Date would not be a Business Day, then such Distribution Date and the first day
of the next succeeding Distribution Period will be the next succeeding Business
Day, except that if such Business Day is in the next succeeding calendar month,
such Distribution Date and the first day of the next succeeding Distribution
Period will be the immediately preceding Business Day.
"Distribution Rate" has the meaning specified in Section 4.01.
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.01.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust or the Property Trustee in the payment of
any Distribution when it becomes due and payable, and
continuation of such default for a period of 30 days (except
during an Extension Period, as defined herein); or
(c) default by the Trust or the Property Trustee in the payment of
any Redemption Price of any Trust Security when it becomes due
and payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this
Trust Agreement (other than a covenant or warranty a default
in the performance of which or the breach of which is dealt
with in clause (b) or (c), 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 defaulting
Trustee or Trustees 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
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a
successor Property Trustee within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Parent and the Trust, substantially in the form attached as Exhibit
A to the Indenture, as amended from time to time.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Capital Securities Certificate" means a Capital Securities
Certificate, evidencing ownership of Global Capital Securities.
"Global Capital Security" means a Capital Security, the ownership and
transfers of which shall be made through book-entries by a Clearing Agency as
described in Section 5.04.
"Guarantee" means the Guarantee Agreement executed and delivered by the
Parent and Wilmington Trust Company, a banking corporation, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the Holders of the Capital Securities, as amended from time to
time.
"Indenture" means the Junior Subordinated Indenture, dated as of May 14,
1999, between the Parent and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.
4
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"3-Month LIBOR" means, with respect to a Determination Date, the rate means
the London interbank offered rate for three-month, Eurodollar deposits
determined by the Trustee (as defined in the Indenture) in the following order
of priority: (i) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a three-month maturity that appears on Telerate Page 3750 as of
11:00 a.m. (London time) on the particular Determination Date ("Telerate Page
3750" means the display designated as "Page 3750" on the Dow Jones Telerate
Service or such other page as may replace Page 3750 on that service or such
other service or services as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying London
interbank offered rates for U.S. dollars deposits); (ii) if such rate does not
appear on Telerate Page 3750 as of 11:00 a.m. (London time) on the Determination
Date, 3-Month LIBOR will be the arithmetic mean of the rates (expressed as
percentages per annum) for Eurodollar deposits having a three-month maturity
that appear on Reruters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as
of 11:00 a.m. (London time) on such Determination Date; (iii) if such rate does
not appear on Reuters Page LIBO as of 11:00 a.m. (London time) on the related
Determination Date, the Trustee will request the principal London offices of
four leading banks in the London interbank market to provide such banks' offered
quotations (expressed as percentages per annum) to prime banks in the London
interbank market for Eurodollar 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; (iv)
if fewer than two such quotations are provided as requested in clause (iii)
above, the Trustee will request four major New York City banks to provide such
banks' offered quotations (expressed as percentages per annum) to leading
European banks for loans in Eurodollars 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 (v) if fewer than two such
quotations are provided as requested in clause (iv) 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 Eurodollar deposits
having a three-month maturity that initially appears on Telerate Page 3750 or
Reuters Page LIBO, as the cause may be, as of 11:00 a.m. (London time) on the
related Determination Date is superseded on the Telerate Page 3750 or Reuters
Page LIBO, as the case may be, by a corrected rate between 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 (as defined in the Indenture) for any Distribution
Period will at no time be higher than the maximum rate then permitted by
Michigan law as the same may be modified by United States law.
All percentages resulting from any calculations on the Trust 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).
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture and
the proceeds of which will be used to pay the Redemption Price of such Trust
Securities, (b) with respect to a distribution of Debentures to Holders of Trust
Securities in connection with a dissolution or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed, and (c)
with respect to any distribution of Additional Amounts to Holders of Trust
Securities, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities in respect of which such distribution is made.
"Liquidation Amount" means the stated amount of $1,000 per Trust Security.
"Liquidation Date" means the date of dissolution, winding-up or termination
and liquidation of the Trust pursuant to Section 9.04(a).
5
"Liquidation Distribution" has the meaning specified in Section 9.04(d).
"London Banking Day" means a day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Majority in Liquidation Amount of The Capital Securities" or "Majority in
Liquidation Amount of The Common Securities" means, except as provided by the
Trust Indenture Act, Capital Securities or Common Securities, as the case may
be, representing more than 50% of the aggregate Liquidation Amount of all then
Outstanding Capital Securities or Common Securities, as the case may be.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President
or a Vice President, and by the Chief Financial Officer, the Secretary or an
Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.16 shall be the principal executive, financial investment or accounting
officer of the Depositor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:
(a) a statement that each officer signing the Officers'
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
Officers' 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.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor, and may be an employee of
any thereof, and who shall be acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding," when used with respect to Trust Securities, means, as of the
date of determination, all Trust Securities theretofore executed, authenticated
and delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Administrative
Trustees or delivered to the Administrative Trustees for
cancellation;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent; provided that, if such
Trust Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Trust Agreement; and
(c) Trust Securities that have been paid or in exchange for or in
lieu of which other Capital Securities have been executed,
authenticated and delivered pursuant to this Trust Agreement;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or any Trustee shall be disregarded and deemed not to be Outstanding, except
that (a) in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Capital Securities which such Trustee knows to be so owned shall be so
disregarded and (b) the foregoing shall not apply at any time when all of the
6
Outstanding Capital Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Capital Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrative Trustees the pledgee's right so to act
with respect to such Capital Securities and that the pledgee is not the
Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Global Capital
Securities Certificate as reflected in the records of the Clearing Agency or, if
a Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly, in accordance with the rules of such Clearing Agency).
"Parent" has the meaning specified in the preamble to this Trust Agreement.
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.10 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its corporate trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Section 4.01.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Placement Agent" means First Tennessee Capital Markets.
"Property Trustee" means the commercial bank or trust company identified as
the "Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein provided.
"Purchase Terms Agreement" means the Purchase Terms Agreement, dated May 7,
1999 among North Country Financial Corporation, North Country Capital Trust, and
the Placement Agent.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date pursuant to the Indenture, shall be
a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any date fixed for redemption of
any Trust Security, the Liquidation Amount of such Trust Security, plus
accumulated and unpaid Distributions up to, but excluding such date, paid by the
Depositor upon the concurrent redemption of a Like Amount of Debentures
allocated on a pro rata basis (based on Liquidation Amounts) among the Trust
Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Restricted Capital Securities" means all Capital Securities required
pursuant to Section 5.04(b) to bear a Restricted Capital Securities Legend on
the Restricted Capital Securities Certificate. Such term includes the Global
Capital Securities Certificate.
"Restricted Capital Securities Certificate" means a certificate evidencing
ownership of Restricted Capital Securities.
"Restricted Capital Securities Legend" means a legend substantially in the
form of the legend required in Section 5.05(c).
7
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.05(a).
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Telerate Page 3750" means the display designated as "Page 3750" on the Dow
Jones Telerate Service (or such other page as may replace Page 3750 on that
service or such other service or services as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
London interbank offered rates for U.S. dollars deposits.
"Trust" means North Country Capital Trust, the Delaware business trust
created and continued hereby and identified on the cover page to this Trust
Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in, or
owing to, the Payment Account, (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 Property Trustee pursuant to the trusts of this Trust Agreement
and (d) the rights of the Property Trustee under the Guarantee.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trustees" has the meaning specified in the preamble to this Trust
Agreement.
Article II
ESTABLISHMENT OF THE TRUST
Section 2.01 NAME. The Trust created and continued hereby shall be known as
"North Country Capital Trust," as such name may be modified from time to time by
the Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.02 OFFICE OF THE PROPERTY TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The office of the Property Trustee in the State of Delaware is at Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attention:
Corporate Trust Administration, or such other address in the State of Delaware
as the Property Trustee may designate by written notice to the Securityholders
and the Depositor. The principal place of business of the Trust is c/o North
Country Financial Corporation, 130 South Cedar Street, Manistique, Michigan
49854.
8
Section 2.03 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES. The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.04 ISSUANCE OF THE CAPITAL SECURITIES. Contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.02 of this Trust
Agreement and deliver in accordance with the Purchase Terms Agreement one or
more Capital Securities Certificates, registered in the name of the Persons
entitled thereto, in an aggregate amount of 12,450 Capital Securities having an
aggregate Liquidation Amount of 12,450,000 against receipt of the aggregate
purchase price of such Capital Securities of $12,450,000 which amount such
Administrative Trustee shall promptly deliver to the Property Trustee.
Section 2.05 ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE
OF DEBENTURES. Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.02 of this Trust Agreement and deliver to the
Depositor, Common Securities Certificates registered in the name of the
Depositor, in an aggregate amount of 386 Common Securities having an aggregate
Liquidation Amount of $386,000 against payment by the Depositor of such amount.
Contemporaneously therewith, an Administrative Trustee, on behalf of the Trust,
shall subscribe to and purchase from the Depositor, Debentures, registered in
the name of the Property Trustee on behalf of the Trust and having an aggregate
principal amount equal to $386,000 and, in satisfaction of the purchase price
for such Debentures, the Property Trustee, on behalf of the Trust, shall deliver
to the Depositor the sum of $12,836,000.
Section 2.06 DECLARATION OF TRUST. The exclusive purposes and functions of
the Trust are (a) to issue and sell Trust Securities and use the proceeds from
such sale to acquire the Debentures, and (b) to engage in those activities
necessary, convenient or incidental thereto. The Depositor hereby appoints the
Trustees as trustees of the Trust, to have all the rights, powers and duties set
forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust.
Section 2.07 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Property Trustee and the Administrative Trustees shall conduct
the affairs of the Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in paragraph (b) of this
Section, and in accordance with the following provisions (i) and (ii), the
Property Trustee and the Administrative Trustees shall have the authority
to enter into all transactions and agreements determined by the Trustees to
be appropriate in exercising the authority, express or implied, otherwise
granted to the Trustees under this Trust Agreement, and to perform all acts
in furtherance thereof, including without limitation, the following:
(i) As among the Trustees, the Administrative Trustees shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Expense Agreement
and the Certificate Depository Agreement and such other
agreements as may be necessary or desirable in connection with
the purposes and function of the Trust;
(C) assisting in any registration of the Capital Securities
under state securities or blue sky laws;
9
(D) assisting in the approval for trading of the Capital
Securities upon the PORTAL System and the preparation and filing
of any periodic and other reports and other documents pursuant to
the foregoing;
(E) the sending of notices (other than notices of default)
and other information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this Trust
Agreement;
(F) the consent to the appointment of a Paying Agent,
authenticating agent and Securities Registrar in accordance with
this Trust Agreement (which consent shall not be unreasonably
withheld);
(G) to the extent provided in this Trust Agreement, 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;
(H) unless otherwise determined by the Property Trustee or
the Holders of at least a majority of Liquidation Amount of the
Capital Securities, or as otherwise required by the Delaware
Business Trust Act, to execute on behalf of the Trust (either
acting alone or together with any or all of the Administrative
Trustees) any documents that the Administrative Trustees have the
power to execute pursuant to this Trust Agreement; and
(I) the taking of any action incidental to the foregoing as
the Trustees may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement and
protect and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(ii) As among the Trustees, the Property 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 Payment 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 Payment
Account;
(D) the distribution through the Paying Agent of amounts
distributable to the Securityholders in respect of the Trust
Securities;
(E) registering transfers of the Trust Securities in
accordance with this Trust Agreement;
(F) the exercise of all of the rights, powers and privileges
of a holder of the Debentures;
(G) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(H) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;
(I) to the extent provided in this Trust Agreement, 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;
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(J) after an Event of Default (other than under paragraph
(b), (c), (d) or (e) of the definition of such term if such Event
of Default is by or with respect to the Property Trustee, in
which case the Administrative Trustees shall have such power,
duty and authority) the taking of any action incidental to the
foregoing as the Property Trustee may from time to time determine
is necessary or advisable to give effect to the terms of this
Trust Agreement and protect and conserve the Trust Property for
the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder); and
(K) any of the duties, liabilities, powers or the authority
of the Administrative Trustees set forth in Section 2.7(a)(i)(E)
and (I) herein; and in the event of a conflict between the action
of the Administrative Trustees and the action of the Property
Trustee, the action of the Property Trustee shall prevail.
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trustees and the Trust shall not
(i) acquire any investments or engage in any activities not authorized by
this Trust Agreement, (ii) sell, assign, transfer, exchange, mortgage,
pledge, set-off or otherwise dispose of any of the Trust Property or
interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would result in more than an
insubstantial risk that the Trust would fail or cease to qualify as a
"grantor trust" for United States Federal income tax purposes, (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 Administrative Trustees shall 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 Securityholders
in their capacity as Securityholders.
(c) In connection with the issuance and sale of the Capital
Securities, the Depositor shall have the right and responsibility to assist
the Trust with respect to, or effect on behalf of the Trust, the following
(and any actions taken by the Depositor in furtherance of the following
prior to the date of this Trust Agreement are hereby ratified and confirmed
in all respects as actions of the Trust):
(i) to prepare preliminary and final Offering Memoranda with
respect to the transactions contemplated by the Purchase Terms
Agreement;
(ii) to determine the States in which to take appropriate action
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 or on behalf of the Trust, and advise the Trustees of actions
they must take on behalf of the Trust, and prepare for execution and
filing any documents to be executed and filed by the Trust or on
behalf of the Trust, as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such States and in
connection with the sale of the Capital Securities;
(iii) to negotiate the terms of, and execute and deliver, the
Purchase Terms Agreement providing for the sale of the Capital
Securities; and
(iv) to take any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees 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, or (ii) fail or cease to qualify as a grantor trust
for United States Federal income tax purposes and so that the Debentures
will be treated as indebtedness of the Depositor for United States Federal
income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the Certificate of Trust or this Trust Agreement, that
each of the Depositor and the Administrative Trustees determines in its
discretion to be necessary or desirable for such purposes as long as such
action does not adversely affect in any material respect the interests of
the Holders of the Capital Securities. In no event shall the Trustees be
liable to the Trust or the Holders for any failure to comply with this
section that results from a change in law or regulation or in the
interpretation thereof.
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(e) All prior actions taken by the Administrative Trustees on behalf
of Parent in furtherance of Parent's powers, duties and obligations under
the Original Trust Agreement are hereby ratified and affirmed as actions of
the Trust.
Section 2.08 ASSETS OF TRUST. The assets of the Trust shall consist of the
Trust Property.
Section 2.09 TITLE TO TRUST PROPERTY. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Trust and the Securityholders in accordance with this Trust Agreement.
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Article III
PAYMENT ACCOUNT
Section 3.01 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal
with respect to the Payment Account for the purpose of making deposits in
and withdrawals from the Payment Account in accordance with this Trust
Agreement. All monies and other property deposited or held from time to
time in the Payment Account shall be held by the Property Trustee in the
Payment Account for the exclusive benefit of the Securityholders and for
distribution as herein provided, including (and subject to) any priority of
payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
Article IV
DISTRIBUTIONS; REDEMPTION
Section 4.01 DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including Additional Amounts) will
be made on the Trust Securities at the rate and on the dates that payments
of interest (including Additional Interest, as defined in the Indenture)
are made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Trust
available for the payment of Distributions. Distributions shall
accumulate from May 14, 1999, and, except in the event (and to the
extent) that the Parent exercises its right to defer interest payments
for the Debentures pursuant to Section 301 of the Indenture (an
"Extension Period"), shall be payable quarterly in arrears on February
14, May 14, August 14, and November 14 of each year, commencing on
August 14, 1999. If any date on which Distributions are otherwise
payable on the Trust Securities is not a Business Day, then the
payment of such Distribution shall be made on the next succeeding day
which is a Business Day (and without any additional distribution or
other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, payment of such
Distribution shall be made on the immediately preceding Business Day,
in each case with the same force and effect as if made on the date on
which such payment was originally payable (each date on which
distributions are payable in accordance with this Section 4.01(a), a
"Distribution Date").
(ii) Assuming payments of interest on the Debentures are made
when due (and before giving effect to Additional Amounts, if
applicable), Distributions on the Capital Securities shall be payable
at a rate per annum quarterly equal to 3-month LIBOR plus 2.50% of the
Liquidation Amount of the Capital Securities. The Distribution Rate on
the Capital Securities for any Distribution Period will be effective
as of the first day of such Distribution Period. The Distribution Rate
on the Capital Securities for each Distribution Period will be
determined on the Determination Date for such Distribution Period and
be a per annum rate equal to 3-month LIBOR plus 2.50%; provided,
however, that the Distribution Rate for the period beginning on (and
including) the date of original issuance and ending on (but excluding)
August 14, 1999, in respect of the Capital Securities will be 7.50%.
The amount of Distributions payable for any full period shall be
computed on the basis of actual days elapsed and a 360-day year. The
amount of Distributions for any partial period shall be computed on
the basis of the actual number of days elapsed and a 360-day year. The
amount of Distributions payable for any period shall include the
Additional Amounts, if any.
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(iii) Distributions on the Trust Securities shall be made by the
Property Trustee from the Payment Account and shall be deemed payable
on each Distribution Date only to the extent that the Trust has funds
available in the Payment Account for the payment of such
Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities at the close of business
on the relevant record date, which shall be , for so long as the Capital
Securities remain in book-entry form, one Business Day prior to the
relevant Distribution Date and, in the event the Capital Securities are not
in book-entry form, the day which is fifteen days prior to the date the
relevant Distribution Date occurs.
Section 4.02 REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities subject to approval of the Federal Reserve, if then required
under the applicable capital guidelines or policies of the Federal Reserve,
at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 45 nor more than 75
days prior to the Redemption Date to each Holder of Trust Securities to be
redeemed, at such Holder's address appearing in the Security Register. All
notices of redemption or liquidation shall state: (i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number or numbers of the Capital Securities
affected;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the aggregate Liquidation Amount of the Trust Securities to
be redeemed;
(v) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vi) the place or places where the Trust Securities are to be
surrendered for the payment of the Redemption Price.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be payable on each Redemption Date only to
the extent that the Trust has funds available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.02(c), the Property Trustee will
irrevocably deposit with the Paying Agent funds sufficient to pay the
applicable Redemption Price and will, so long as the Capital Securities are
in book-entry-only form, irrevocably deposit with the Clearing Agency for
the Capital Securities Funds sufficient to pay the applicable Redemption
Price, will give such Clearing Agency irrevocable instructions and
authority to pay the redemption price to the Holders thereof. If the
Capital Securities are no longer in book-entry-only form, the Property
Trustee, subject to Section 4.02(c), will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders
thereof upon surrender of their Capital Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be
payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit,
all rights of Securityholders holding Trust Securities so called for
redemption will cease, except the right of such Securityholders to receive
the Redemption Price and any Distribution payable in respect of the Trust
Securities on or prior to the Redemption Date, but without interest on such
Redemption Price, and such Trust Securities will cease to be outstanding.
In the event that any date fixed for redemption of Trust
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Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day,
in each case, with the same force and effect as if made on such date. In
the event that payment of the Redemption Price in respect of any Trust
Securities called for redemption is improperly withheld or refused and not
paid either by the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities will continue to accumulate, as set
forth in Section 4.01, from the Redemption Date originally established by
the Trust for such Trust Securities to the date such Redemption Price is
actually paid, in which case the actual payment date will be the date fixed
for redemption for purposes of calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities and
distribution of Debentures to holders of Capital Securities shall be made
to the record holders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be the date
fifteen (15) days prior to the relevant Redemption Date or Liquidation
Date, as applicable.
(f) Subject to Section 4.03(a), if less than all of the outstanding
Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of such Trust Securities to be redeemed will
be allocated pro rata to the Trust Securities based upon the relative
Liquidation Amounts of such classes. The particular Capital Securities to
be redeemed will be selected on a pro rata basis by the Property Trustee
from the outstanding Capital Securities not previously called for
redemption, by such method (including, without limitation, by lot) as the
Property Trustee deems fair and appropriate and which may provide for the
selection for redemption of portions (equal to $1,000 or an integral
multiple of $1,000 in excess thereof) of the Liquidation Amount of Capital
Securities of a denomination larger than $1,000; provided, however, that in
no event shall the Property Trustee redeem a number of Capital Securities
from a holder if, as a result of such redemption, such holder would own a
number of Capital Securities equal to or greater than one, but less than
100. The Property Trustee will promptly notify the registrar for the
Capital Securities in writing of the Capital Securities selected for
redemption and, in the case of any Capital Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes
of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Capital Securities will relate to
the portion of the aggregate Liquidation Amount of Capital Securities which
has been or is to be redeemed.
Section 4.03 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, the Redemption Price of and the Liquidation Distribution in
respect of the Trust Securities, as applicable, shall be made, subject to
Section 4.02(f), pro rata among the Capital Securities and the Common
Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date, Redemption Date or
Liquidation Date any Event of Default resulting from a Debenture Event of
Default shall have occurred and be continuing, no payment of any
Distribution (including Additional Amounts, if applicable) on, or
Redemption Price of or Liquidation Distribution in respect of, any Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions (including
Additional Amounts, if applicable) on all Outstanding Capital Securities
for all distribution periods terminating on or prior thereto, or in the
case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Capital Securities, then called for redemption, or
in the case of payment of the Liquidation Distribution the full amount of
such Liquidation Distribution on all Outstanding Capital Securities, shall
have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Capital Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will
be deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effect of all such Events of
Default with respect to the Capital Securities have been cured, waived or
otherwise eliminated. Until all such Events of Default under this Trust
Agreement with respect to the Capital Securities have been so cured, waived
or otherwise eliminated, the Property Trustee shall act solely on behalf of
the Holders of the Capital Securities and not on behalf of the Holder of
the Common Securities, and only the Holders of the Capital Securities will
have the right to direct the Property Trustee to act on their behalf.
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Section 4.04 PAYMENT PROCEDURES. Payments of Distributions (including
Additional Amounts if applicable) in respect of the Capital Securities shall be
made at (a) the Corporate Trust Office of the Property Trustee, (b) the
principal office of any Paying Agent, or (c) the principal office of the
Securities Registrar; provided that payment of any Distribution may be made, at
the option of the Administrative Trustees, by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities Register
or by wire transfer in immediately available funds at such place and to such
account as may be designated by the Person entitled thereto as specified in the
Securities Register; if the Capital Securities are held by a Clearing Agency,
such payments shall be made either by check or by wire transfer, at the option
of the Paying Agent, to the Clearing Agency in immediately available funds,
which shall credit the relevant Persons' accounts at such Clearing Agency on the
applicable Distribution Dates. Payments in respect of the Common Securities
shall be made in such manner as shall be mutually agreed between the Property
Trustee and the Holder of the Common Securities.
Section 4.05 TAX RETURNS AND REPORTS.
(a) The Administrative Trustees shall prepare (or cause to be
prepared), at the Depositor's expense, and filed by January 31 following
each calendar year all Federal, state and local tax and information returns
and reports required to be filed by or in respect of the Trust. In this
regard, by January 31 following each calendar year the Administrative
Trustees shall (a) prepare and file (or cause to be prepared or filed) the
Internal Revenue Service Form 1041 (or any successor form) required to be
filed in respect of the Trust in each taxable year of the Trust and (b)
prepare and furnish (or cause to be prepared and furnished) to each
Securityholder the related Internal Revenue Service Form 1099 (or any
successor form). The Administrative Trustees shall provide the Depositor
and the Property Trustee with a copy of all such returns, reports and
schedules promptly after such filing or furnishing.
(b) In the event that any withholding tax is imposed on the Trust's
payment to a Securityholder, such tax shall reduce the amount otherwise
distributable to the Securityholder in accordance with this Section. Any
Securityholder who is a nonresident alien individual or which is organized
under the laws of a jurisdiction outside the United States shall, on or
prior to the date such Securityholder becomes a Securityholder, (a) so
notify the Trust and the Trustees, and (b) either (i) provide the Trust and
the Trustees with Internal Revenue Service Form 1001, 4224, 8709 or W-8, as
appropriate, or (ii) notify the Trust and the Trustees that it is not
entitled to an exemption from United States withholding tax or a reduction
in the rate thereof on payments of interest. Any such Securityholder agrees
by its acceptance of a Capital Security, on an ongoing basis, to provide
like certification for each taxable year for which it is necessary to
provide such information and to notify the Trust and the Trustees should
subsequent circumstances arise affecting the information provided the
Trustees in clauses (a) and (b) above. The Trustees shall be fully
protected in relying upon, and each Securityholder by its acceptance of a
Capital Security hereunder agrees to indemnify and hold the Trustees
harmless against all claims or liability of any kind arising in connection
with or related to the Trustees' reliance upon, any documents, forms or
information provided by any Securityholder to the Trustees. In addition, if
the Trustees have not withheld taxes on any payment made to any
Securityholder, and the Trustees are subsequently required to remit to any
taxing authority any such amount not withheld, such Securityholder shall
return such amount to the Trustees upon written demand by the Trustees. The
Trustees shall be liable only for direct (but not consequential) damages to
any Securityholder due to the Trustees' violation of the Code and only to
the extent such liability is caused by the Trustees' failure to act in
accordance with its standard of care under this Agreement. The Trustees
shall comply with United States federal withholding and backup withholding
tax laws and information reporting requirements with respect to any
payments to Securityholders under the Trust Securities.
Section 4.06 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST. Upon receipt
under the Debentures of Additional Sums (as defined in the Indenture), the
Property Trustee shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
Section 4.07 PAYMENTS UNDER INDENTURE. Any amount payable hereunder to any
Holder of Capital Securities (and any Owner with respect thereto) shall be
reduced by the amount of any corresponding payment such Holder (and Owner with
respect to a Holder's Capital Securities) has directly received pursuant to
Section 508 of the Indenture or Section 5.11 of this Trust Agreement.
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Article V
TRUST SECURITIES CERTIFICATES
Section 5.01 INITIAL OWNERSHIP. Upon the formation of the Trust and the
contribution by the Depositor pursuant to Section 2.03 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
Section 5.02 THE TRUST SECURITIES CERTIFICATES.
(a) The Capital Securities Certificates shall be issued in minimum
denominations of $100,000 Liquidation Amount (100 Capital Securities) and
integral multiples of $1,000 in excess thereof, and the Common Securities
Certificates shall be issued in denominations of $1,000 Liquidation Amount
and integral multiples thereof. The Trust Securities Certificates shall be
executed on behalf of the Trust by signature of one of the three
Administrative Trustees. Trust Securities Certificates bearing the
signatures of individuals who were, at the time when such signatures shall
have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to
be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such
Trust Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Securityholder, and shall be entitled to the
rights and subject to the obligations of a Securityholder hereunder, upon
due registration of such Trust Securities Certificate in such transferee's
name pursuant to Sections 5.03 and 5.05.
(b) The Capital Securities Certificates issued to Qualified
Institutional Buyers (as defined in Rule 144A under the Securities Act),
upon original issuance, will be issued in the form of a Global Capital
Securities Certificate registered in the name of Cede & Co. ("Cede"), as
the Clearing Agency's nominee, and deposited with or on behalf of the
Clearing Agency for credit by the Clearing Agency to the respective
accounts of the Owners thereof (or such other accounts as they may direct).
Except as set forth herein, record ownership of the Global Capital Security
may be transferred, in whole or in part, only to another nominee of the
Clearing Agency or to a successor of the Clearing Agency or its nominee.
(c) The Capital Securities Certificates issued to Persons other than
Qualified Institutional Buyers (as defined in Rule 144A under the
Securities Act), upon original issuance, will be issued in the form of a
Global Capital Securities Certificate registered in the name of Cede , as
the Clearing Agency's nominee, and deposited with or on behalf of the
Clearing Agency for credit by the Clearing Agency to the respective
accounts of the Owners thereof (or such other accounts as they may direct).
Except as set forth herein, record ownership of the Global Capital Security
may be transferred, in whole or in part, only to another nominee of the
Clearing Agency or to a successor of the Clearing Agency or its nominee.
(d) No Capital Securities Certificate shall be entitled to the benefit
of this Trust Agreement or be valid or obligatory for any purpose unless
there appears on such Capital Securities Certificate a certificate of
authentication substantially in the form contained in Exhibit C hereto
executed by the Property Trustee by manual signature, and such certificate
upon any Capital Securities Certificate shall be conclusive evidence, and
the only evidence, that such Capital Securities Certificate has been duly
authenticated and delivered hereunder.
(e) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
(f) Pending the preparation of definitive Trust Securities
Certificates, the Administrative Trustees may execute on behalf of the
Trust and delivery, temporary Trust Securities Certificates which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Trust Securities Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations
as the Administrative Trustees executing such temporary Trust Securities
Certificates may determine, as evidenced by their execution of such Trust
Securities Certificates.
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If temporary Trust Securities Certificates are issued, the Trust will cause
definitive Trust Securities Certificates to be prepared without unreasonable
delay. After the preparation of definitive Trust Securities Certificates, the
temporary Trust Securities Certificates shall be exchangeable for definitive
Trust Securities Certificates upon surrender of the temporary Trust Securities
Certificates at any office or agency of the Trust, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Trust Securities
Certificates, the Administrative Trustees shall execute and deliver in exchange
therefor a like amount of definitive Trust Securities Certificates having the
same date of issuance and the same terms as such temporary Trust Securities
Certificates. Until so exchanged, the temporary Trust Securities Certificates
shall in all respects be entitled to the same benefits under this Trust
Agreement as definitive Trust Securities Certificates.
Section 5.03 DELIVERY OF TRUST SECURITIES CERTIFICATES On the Closing Date,
the Administrative Trustees shall cause Trust Securities Certificates, in an
aggregate Liquidation Amount as provided in Section 2.04, to be executed on
behalf of the Trust and delivered to or upon the written order of the Depositor,
executed by one authorized officer thereof, without further corporate action by
the Depositor, in authorized denominations.
Section 5.04 GLOBAL CAPITAL SECURITY
(a) The Global Capital Securities issued under this Trust Agreement
will be registered in the name of Cede, as a nominee of the Clearing
Agency, and delivered to its custodian therefor, and such Global Capital
Security shall constitute a single Capital Security for all purposes of
this Trust Agreement.
(b) Notwithstanding any other provision in this Trust Agreement, a
Global Capital Security may not be exchanged in whole or in part for
Capital Securities registered, and no transfer of a Global Capital Security
in whole or in part may be registered, in the name of any Person other than
the Clearing Agency for such Global Capital Security, Cede, or other
nominee thereof unless (i) such Clearing Agency advises the Property
Trustee in writing that such Clearing Agency is no longer willing or able
to continue as Clearing Agency with respect to such Global Capital
Security, and the Depositor is unable to locate a qualified successor, (ii)
the Depositor at its sole option advises the Clearing Agency in writing
that it elects to terminate the book-entry system through the Clearing
Agency, or (iii) there shall have occurred and be continuing a Debenture
Event of Default. If a Capital Security which is not a Global Capital
Security is transferred to a Holder which desires to take delivery in the
form of a beneficial interest in a Global Capital Security, then such
transfer shall be permitted pursuant to the provisions of Section
5.05(b)(i). In addition, beneficial interests in a Global Capital Security
may be exchanged by or on behalf of the Clearing Agency for certificated
Capital Securities upon transfer of such beneficial interests to a
non-Qualified Institutional Buyer.
(c) If a Global Capital Security is to be exchanged for Capital
Securities or canceled in whole, it shall be surrendered by or on behalf of
the Clearing Agency or its nominee to the Securities Registrar for exchange
or cancellation as provided in this Article V. If a Global Capital Security
is to be exchanged for Capital Securities or canceled in part, or if a
Capital Security is to be exchanged for Capital Securities or canceled in
part, or if a Capital Security is to be exchanged in whole or in part for a
beneficial interest in the Global Capital Security, then either (i) such
Global Capital Security shall be so surrendered for exchange or
cancellation as provided in this Article V or (ii) the aggregate
Liquidation Amount thereof shall be reduced, subject to Section 5.02, or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the aggregate Liquidation Amount of such Capital
Security to be so exchanged for a beneficial interest therein, as the case
may be, by means of an appropriate adjustment made on the records of the
Security Registrar, whereupon the Property Trustee, in accordance with the
Applicable Procedures, shall instruct the Clearing Agency or its authorized
representative to make a corresponding adjustment to its records. Upon any
such surrender or adjustment of a Global Capital Security by the Clearing
Agency and Clearing Agency Participants, accompanied by registration
instructions executed by an Administrative Trustee on behalf of the Trust
and, to the extent required in Section 5.05(c), a Restricted Capital
Securities Certificate, the Property Trustee shall, subject to the Article
V, countersign and make available for delivery any executed Capital
Securities delivered to it issuable in exchange for such Global Capital
Security (or portion thereof) in accordance with the instructions of the
Clearing Agency. The Property Trustee shall not be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
fully protected in relying on, such instructions.
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(d) The Clearing Agency or its nominee, as the registered owner of a
Global Capital Security, shall be considered the Holder of the Capital
Securities represented by a Global Capital Security for all purposes under
this Trust Agreement and the Capital Securities, and owners of beneficial
interests in a Global Capital Security shall hold such interests pursuant
to the Applicable Procedures and, except as otherwise provided herein,
shall not be entitled to have any of the individual Capital Securities
represented by a Global Capital Security registered in their names, shall
not receive nor be entitled to receive physical delivery of any such
Capital Securities in definitive form and shall not be considered the
Holders thereof under this Trust Agreement. Accordingly, any such Owner's
beneficial interest in a Global Capital Security shall be shown only on,
and the transfer of such interest shall be effected only through, records
maintained by the Clearing Agency or its nominee. The Securities Registrar
and the Trustees shall be entitled to deal with the Clearing Agency for all
purposes of this Trust Agreement relating to the Global Capital Securities
(including the giving of notices or other communications required under
this Trust Agreement, the payment of the Liquidation Amount of and
Distributions on the Global Capital Securities and the giving of
instructions or directions to Owners of Global Capital Securities) as the
sole Holder of Global Capital Securities and shall have no obligations to
the Owners thereof. Neither the Property Trustee nor the Securities
Registrar shall have any liability in respect of any transfers effected by
the Clearing Agency.
(e) The rights of Owners of beneficial interests in a Global Capital
Security shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such owners and
the Clearing Agency. Neither the Clearing Agency nor its nominee will
consent or vote with respect to the Capital Securities. Under its usual
procedures, the Clearing Agency or its nominee would mail an Omnibus Proxy
to the Trust as soon as possible after the relevant record date. The
Omnibus Proxy assigns the consenting or voting rights of the Clearing
Agency or its nominee to those Clearing Agency Participants, identified in
a listing attached to such Omnibus Proxy, to whose accounts the Capital
Securities are credited on such record date.
Section 5.05 REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES; CAPITAL SECURITIES CERTIFICATES; SECURITIES ACT
LEGENDS.
(a) The Property Trustee shall keep or cause to be kept at its
Corporate Trust Office a register or registers for the purpose of
registering Capital Securities Certificates and Common Securities
Certificates and transfers and exchanges of Capital Securities Certificates
and Common Securities Certificates in which the registrar and transfer
agent with respect to the Capital Securities (the "Securities Registrar"),
subject to such reasonable regulations as it may prescribe, shall provide
for the registration of Capital Securities Certificates and Common
Securities Certificates (subject to Section 5.11 in the case of Common
Securities Certificates) and registration of transfers and exchanges of
Capital Securities Certificates and Common Securities Certificates as
herein provided. Such register is herein sometimes referred to as the
"Securities Register." The Bank is hereby appointed "Securities Registrar"
for the purpose of registering Capital Securities and transfers of Capital
Securities as herein provided. The provisions of Sections 8.01, 8.03 and
8.06 hereunder shall apply to the Bank also in its role as Securities
Registrar.
Upon surrender for registration of transfer of any Capital Security at the
offices or agencies of the Property Trustee designated for that purpose, the
Administrative Trustees shall execute, and the Property Trustee shall, if
requested by an Administrative Trustee, authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Capital Securities of any authorized denominations of like tenor and
aggregate liquidation amount and bearing such restrictive legends as may be
required by this Trust Agreement.
At the option of the Holder, Capital Securities may be exchanged for other
Capital Securities of any authorized denominations, of like tenor and aggregate
Liquidation Amount and bearing such restrictive legends as may be required by
this Trust Agreement, upon surrender of the Capital Securities to be exchanged
at such office or agency. Whenever any securities are so surrendered for
exchange, an Administrative Trustee shall execute and the Property Trustee
shall, if requested by an Administrative Trustee, authenticate and make
available for delivery the Capital Securities that the Holder making the
exchange is entitled to receive.
All Capital Securities issued upon any transfer or exchange of Capital
Securities shall be the valid obligations of the Trust, entitled to the same
benefits under this Trust Agreement as the Capital Securities surrendered upon
such transfer or exchange.
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Every Capital Security presented or surrendered for transfer or exchange
shall (if so required by the Property Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Property Trustee and the Securities Registrar, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange of
Capital Securities, but the Property Trustee or the Securities Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Capital Securities.
Neither the Trust nor the Property Trustee shall be required, pursuant to
the provisions of this Section, to register the transfer of or exchange any
Capital Security so selected for redemption in whole or in part, except, in the
case of any such Capital Security to be redeemed in part, any portion thereof
not to be redeemed.
The Capital Securities will be issued, and may be transferred, only in
blocks having a Liquidation Amount of not less than $100,000 and integral
multiples of $1,000 in excess thereof. Any transfer, sale or other disposition
of Capital Securities in a block having a Liquidation Amount of less than
$100,000 shall be deemed to be void and of no legal effect whatsoever. 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.
(b) Certain Transfers and Exchanges. Subject to Section 5.04(c), but
notwithstanding any other provision of this Trust Agreement, transfers and
exchanges of Capital Securities and beneficial interests in a Global
Capital Security shall be made only in accordance with this Section 5.05(b)
and Section 5.04(c).
(i) Non-Global Capital Security to Global Capital Security. If
the Holder of a Capital Security (other than the Global Capital
Security) wishes at any time to transfer all or any portion of such
Capital Security to a Person who wishes to take delivery thereof in
the form of a beneficial interest in a Global Capital Security, such
transfer may be effected only in accordance with the provisions of
this clause (b)(i) and subject to the Applicable Procedures. Upon
receipt by the Securities Registrar of (A) such Capital Security as
provided in Section 5.05(a) and instructions satisfactory to the
Securities Registrar directing that a beneficial interest in a Global
Capital Security in a specified liquidation amount not greater than
the liquidation amount of such Capital Security to be credited to a
specified Clearing Agency Participant's account, (B) a Capital
Securities Certificate duly executed by such Holder or such Holder's
attorney duly authorized in writing, and (C) a certification
substantially similar to that attached hereto as Exhibit C, then the
Securities Registrar shall cancel such Capital Security (and issue a
new Capital Security in respect of any untransferred portion thereof)
and increase the aggregate Liquidation Amount of the Global Capital
Security by the specified Liquidation Amount as provided in Section
5.04(c).
(ii) Non-Global Capital Security to Non-Global Capital Security.
A Capital Security that is not a Global Capital Security may be
transferred, in whole or in part, to a Person who takes delivery in
the form of another Capital Security that is not a Global Capital
Security as provided in Section 5.05(a); provided that if the Capital
Security to be transferred in whole or in part is a Restricted Capital
Security, the Securities Registrar shall have received a Restricted
Capital Securities Certificate duly executed by the transferor Holder
or such Holder's attorney duly authorized in writing.
(iii) Exchanges Between Global Capital Security and Non-Global
Capital Security. A beneficial interest in the Global Capital Security
may be exchanged for a Capital Security that is not a Global Capital
Security only as provided in Section 5.04.
(iv) Limitations Relating to Liquidation Amount. Notwithstanding
any other provision of this Trust Agreement and unless otherwise
specified as permitted by this Trust Agreement, Capital Securities or
portions thereof may be transferred or exchanged only in Liquidation
Amounts of not less than $100,000 and integral multiples of $1,000 in
excess thereof. Any transfer, exchange or disposition of Capital
Securities in contravention of this Section 5.05(b)(iv) shall be
deemed to be void and of no legal effect whatsoever, any such
transferee shall be deemed not to be the Holder or owner of any
beneficial interest in such Capital Securities for any purpose,
including but not limited to the
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receipt of interest payable on such Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such
Capital Securities.
(c) Restricted Securities Legend. (i) Except as set forth in this
Section 5.04(c), all Capital Securities shall bear a Restricted Capital
Securities legend substantially in the following form:
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS
OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL 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, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE
ON WHICH THE COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) AS LONG AS
THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A)
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) 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, (E) TO AN INDIVIDUAL ACCREDITED
INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH (A)(5) OR (6) OF RULE 501
UNDER THE SECURITIES ACT, RESIDING IN ONE OF THE JURISDICTIONS
AUTHORIZED BY THE COMPANY, THAT IS PURCHASING THE CAPITAL SECURITIES
FOR ITS OWN ACCOUNT 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 UNDER THE SECURITIES ACT, SUBJECT TO
THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, (ii) PURSUANT TO CLAUSE (D) TO REQUIRE
THAT THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE
SUBSTANTIALLY IN THE FORM OF APPENDIX D TO THE OFFERING MEMORANDUM
DATED MAY 7, 1999, AND (iii) PURSUANT TO CLAUSE (E) TO REQUIRE THAT THE
TRANSFEROR DELIVER TO THE TRUST OR OTHER TRANSFER AGENT A QUESTIONNAIRE
AND INVESTMENT AGREEMENT, EACH OF WHICH IS AVAILABLE FROM THE COMPANY.
SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
(ii) Subject to the following paragraphs of this Section
5.04(c), a new Capital Security (other than a Global Capital Security)
that does not bear a Restricted Capital Securities Legend may be issued
in exchange for or in lieu of a Restricted Capital Security or any
portion thereof that bears such a legend if, in the Depositor's
judgment, placing such a legend upon such new Capital Security is not
necessary to ensure compliance with the registration requirements of
the Securities Act, and the Property Trustee, at the written direction
of the Trust
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in the form of an Officers' Certificate, shall authenticate and
deliver such a new Capital Security as provided in this Article V.
(iii) Notwithstanding the foregoing provisions of this Section
5.04(c), a successor Capital Security of a Capital Security that does
not bear a Restricted Capital Securities Legend shall not bear such
form of legend unless the Depositor has reasonable cause to believe
that such successor Capital Security is a "restricted security" within
the meaning of Rule 144 under the Securities Act, in which case the
Property Trustee, at the written direction of the Trust in the form of
an Officer's Certificate, shall authenticate and deliver a new Capital
Security bearing a Restricted Capital Securities Legend in exchange
for such successor Capital Security as provided in this Article V.
(iv) Upon any sale or transfer of a Restricted Capital Security
(including any Restricted Capital Security represented by a Global
Capital Security) pursuant to an effective registration statement
under the Securities Act or pursuant to Rule 144 under the Securities
Act after such registration ceases to be effective, (A) in the case of
an Restricted Capital Security that is a definitive Capital Security,
the Securities Registrar shall permit the Holder thereof to exchange
such Restricted Capital Security for a definitive Capital Security
that does not bear the Restricted Securities Legend and rescind any
restriction on the transfer of such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is represented
by a Global Capital Security, the Securities Registrar shall permit
the Holder of such Global Capital Security to exchange such Global
Capital Security for another Global Capital Security that does not
bear the Restricted Securities Legend.
(v) If Restricted Capital Securities are being presented or
surrendered for transfer or exchange then there shall be (if so
required by the Property Trustee), (a) if such Restricted Capital
Securities are being delivered to the Securities Registrar by a Holder
for registration in the name of such Holder, without transfer, a
certification from such Holder to that effect; or (b) if such
Restricted Capital Securities are being transferred, if the Trust or
Securities Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the
Restricted Capital Securities Legend.
Section 5.06 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and cause to be made available for delivery, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section, the Administrative Trustees or the Securities
Registrar 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
Trust Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Securities Certificate shall be found at any time.
Section 5.07 PERSONS DEEMED SECURITYHOLDERS. Prior to due presentation of a
Trust Securities Certificate for registration of transfer, the Administrative
Trustees or the Securities Registrar shall treat the Person in whose name any
Trust Securities Certificate shall be registered in the Securities Register as
the owner of such Trust Securities Certificate for the purpose of receiving
distributions and for all other purposes whatsoever, and neither the Trustees
nor the Securities Registrar shall be bound by any notice to the contrary.
Section 5.08 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES. Each
Holder, by receiving and holding a Trust Securities Certificate, and each Owner
shall be deemed to have agreed not to hold either the Depositor, the Property
Trustee or the Administrative Trustees accountable by reason of the disclosure
of its name and address, regardless of the source from which such information
was derived.
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Section 5.09 MAINTENANCE OF OFFICE OR AGENCY. The Administrative Trustees
shall maintain an office or offices or agency or agencies where Capital
Securities Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Trustees in respect of the
Trust Securities Certificates may be served. The Administrative Trustees
initially designate the Corporate Trust Office as the office for such purposes.
Such offices may also consist of the principal office of any Paying Agent or the
principal office of the Securities Registrar. The Administrative Trustees shall
give prompt written notice to the Depositor and to the Securityholders of any
change in the location of the Securities Register or any such office or agency.
Section 5.10 APPOINTMENT OF PAYING AGENT. The Paying Agent shall make
distributions to Securityholders from the Payment Account and shall report the
amounts of such distributions to the Property Trustee and the Administrative
Trustees. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the distributions referred to
above. The Administrative Trustees may revoke such power and remove the Paying
Agent in their sole discretion. The Paying Agent shall initially be the Bank,
and any co-paying agent chosen by the Bank, and acceptable to the Administrative
Trustees and the Depositor. Any Person acting as Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Administrative
Trustees, the Property Trustee and the Depositor. In the event that the Bank
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall apply
to the Bank also in its role as Paying Agent, for so long as the Bank shall act
as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
Section 5.11 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On the Closing
Date the Depositor shall acquire and thereafter shall retain beneficial and
record ownership of the Common Securities. Any attempted transfer of the Common
Securities other than as set forth in the preceding sentence shall be void;
provided that any permitted successor of the Depositor under the Indenture may
succeed to the Depositor's ownership of the Common Securities. The
Administrative Trustees shall cause each Common Securities Certificate issued to
the Depositor to contain a legend stating substantially "THIS CERTIFICATE IS NOT
TRANSFERABLE."
Section 5.12 RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.09,
and the Securityholders shall not have any right or title therein other
than the undivided beneficial interest in the assets of the Trust conferred
by their Trust 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 Trust Securities shall be personal property giving
only the rights specifically set forth therein and in this Trust Agreement.
The Trust Securities shall have no preemptive or similar rights and when
issued and delivered to Securityholders against payment of the purchase
price therefor and upon such payment will be fully paid and nonassessable
by the Trust. The Holders of the Trust Securities, in their capacities as
such, shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default, the Debenture Trustee fails or the holders of
not less than 25% in aggregate 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 at least 25% in Liquidation
Amount of the Capital Securities then Outstanding shall have such right by
a notice in writing to the Depositor and the Debenture Trustee; and upon
any such declaration such principal amount of and the accrued interest
23
on all of the Debentures shall become immediately due and payable, provided
that the payment of principal and interest on such Debentures remains
subordinated to the extent provided in the Indenture.
At any time after such 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 described in the
Indenture, if the holders of a majority in aggregate principal amount of the
outstanding Debentures fail 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 Depositor and the Debenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay:
(A) all overdue installments of interest (including any
Additional Interest (as defined in the Indenture) on all of the
Debentures,
(B) the principal of any Debenture which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Debentures, and
(C) 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
Property Trustee, their agents and counsel; and
(ii) all Debenture Events of Default, other than the non-payment
of the principal of the Debentures which has become due solely by such
acceleration, have been cured or waived as provided in Section 513 of
the Indenture. The holders of a majority in aggregate Liquidation
Amount of the Capital Securities may, on behalf of the Holders of all
the Capital Securities, waive any past default under the Indenture,
except a default in the payment of principal of or interest (including
any Additional Interest, as defined in the Indenture) on any Debenture
(unless such default has been cured and a sum sufficient to pay all
matured installments of interest (including any Additional Interest,
as defined in the Indenture) and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a
default in respect of a covenant or provision which under the
Indenture cannot be modified or amended without the consent of the
holder of each outstanding Debenture. 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 Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities all or part of which are represented by Global Capital Securities
Certificates, 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 Property 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 which is 90 days after such record date, such
notice of declaration or 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 or acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.12(b).
(c) For so long as any Capital Securities remain outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 501(1) or 501(2) of the Indenture, any Holder of Capital Securities
shall have the right to institute a proceeding directly against the
Depositor, pursuant to Section 508 of the Indenture, for enforcement of
payment to such Holder of the
24
principal amount of (and premium, if any) or interest (including any
Additional Interest, as defined in the Indenture) on Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action"). Except as set forth in
Section 5.12(b) and (c), the Holders of Capital Securities shall have no
right to exercise directly any right or remedy available to the holders of,
or in respect of, the Debentures.
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Article VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
Section 6.01 LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Section 10.03 and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of
the parties hereto, nor shall anything herein set forth, or contained in
the terms of the Trust Securities Certificates, be construed so as to
constitute the Securityholders from time to time as partners or members of
an association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 513
of 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 to any amendment, modification or termination of
the Indenture or the Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at
least a majority in Liquidation Amount of the Outstanding Capital
Securities; provided, however, that where a consent under the Indenture
would require the consent of each holder of Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior
written consent of each Holder of Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the
Holders of Capital Securities, except by a subsequent vote of the Holders
of Capital Securities. The Property Trustee shall notify all Holders of the
Capital Securities of any notice of default received from the Debenture
Trustee. In addition to obtaining the foregoing approvals of the Holders of
the Capital Securities, prior to taking any of the foregoing actions, the
Trustees shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust will not
fail to be classified as a grantor trust for United States federal income
tax purposes on account of such action.
(c) Except as provided in Section 10.03, if any proposed amendment to
the Trust Agreement provides for, or the Trustees otherwise propose to
effect, (i) any action that would adversely affect in any material respect
the powers, preferences or special rights of the Capital Securities,
whether by way of amendment to the Trust Agreement or otherwise, or (ii)
the dissolution, winding-up or termination of the Trust, other than
pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Capital Securities as a 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 Outstanding Capital Securities. No amendment to
this Trust Agreement may be made if, as a result of such amendment, the
Trust would fail to be classified as a grantor trust for United States
Federal income tax purposes or would lose its exemption from status as an
"investment company" under the Investment Company Act.
Section 6.02 NOTICE OF MEETINGS. Notice of all meetings of the Capital
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Administrative Trustees pursuant to Section 10.09 to each Capital
Securityholder of record, at his registered address, at least 15 days and not
more than 90 days before the meeting. At any such meeting, any business properly
before the meeting may be so considered whether or not stated in the notice of
the meeting. Any adjourned meeting may be held as adjourned without further
notice.
Any and all notices to which any Capital Securityholder hereunder may be
entitled and any and all communications shall be deemed duly served or given if
mailed, postage prepaid, addressed to any Capital Securityholder of record at
his last known address as recorded on the Securities Register.
Section 6.03 MEETINGS OF CAPITAL SECURITYHOLDERS. No annual meeting of
Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Capital Securityholders of record of at least 25% in aggregate
Liquidation Amount of the Outstanding Capital Securities and the Administrative
Trustees or the Property Trustee may, at any time in their
26
discretion, call a meeting of Capital Securityholders to vote on any matters as
to the which Capital Securityholders are entitled to vote.
Capital Securityholders of record of at least 50% in aggregate Liquidation
Amount of the Outstanding Capital Securities, present in person or by proxy,
shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Capital
Securityholders of record present, in person or by proxy, holding at least a
majority in aggregate Liquidation Amount of the Capital Securities held by the
Capital Securityholders of record present, either in person or by proxy, at such
meeting shall constitute the action of the Securityholders, unless this Trust
Agreement requires a greater number of affirmative votes.
Section 6.04 VOTING RIGHTS. Securityholders shall be entitled to one vote
for each $1,000 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to vote.
Section 6.05 PROXIES, ETC. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one or
more officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution.
Section 6.06 SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action which may
be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding at least a majority in aggregate Liquidation Amount of
all Outstanding Trust Securities entitled to vote in respect of such action (or
such larger proportion thereof as shall be required by any express provision of
this Trust Agreement) shall consent to the action in writing. The Administrative
Trustees shall cause a notice of any matter upon which action by written consent
of the Securityholders is to be taken, to be given to each Holder of record of
the Outstanding Capital Securities in the same manner as that set forth in
Section 6.02 for notice of meetings.
Section 6.07 RECORD DATE FOR VOTING AND OTHER PURPOSES. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or to participate in any distribution on the
Trust Securities in respect of which a record date is not otherwise provided for
in this Trust Agreement, or for the purpose of any other action, the
Administrative Trustees or the Property Trustee may from time to time fix a
date, not more than 90 days prior to the date of any meeting of Securityholders
or the payment of distribution or other action, as the case may be, as a record
date for the determination of the identity of the Securityholders of record for
such purposes.
Section 6.08 ACTS OF SECURITYHOLDERS. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Trust Agreement to be given, made or taken by Securityholders or Owners may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders or Owners in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to an Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders or Owners signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Trust Agreement and (subject
to Section 8.01) conclusive in favor of the Trustees, if made in the manner
provided in this Section.
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The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders of Trust Securities
and the Administrative Trustees or among such Securityholders or Trustees with
respect to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder or
Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any Person.
Section 6.09 INSPECTION OF RECORDS. Upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
Article VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 REPRESENTATIONS AND WARRANTIES OF THE BANK AND THE PROPERTY
TRUSTEE. The Bank and the Property Trustee, each severally on behalf of and as
to itself, as of the date hereof, and each successor Property Trustee at the
time of the successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (the term "Bank" being used to refer to such
successor Property Trustee in its separate corporate capacity) hereby represents
and warrants (as applicable) as to itself only and for the benefit of the
Depositor and the Securityholders that:
(a) the Bank is a banking corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Bank and, assuming the authorization, execution and
delivery hereof by the other parties hereto, constitutes the valid and
legally binding agreement of the Bank enforceable against the Bank in
accordance with its terms, subject to bankruptcy, insolvency,
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fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(d) the execution, delivery and performance by the Bank of this Trust
Agreement have been duly authorized by all necessary corporate and other
action on the part of the Bank and the Property Trustee, and do not require
any approval of stockholders of the Bank and such execution, delivery and
performance will not (i) violate the Bank's Charter or By-laws, (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien
on any properties included in the Trust Property pursuant to the provisions
of, any indenture, mortgage, credit agreement, license or other agreement
or instrument to which the Property Trustee or the Bank is a party or by
which it is bound, or (iii) violate any law, governmental rule or
regulation of the State of Delaware or the United States governing the
banking or trust powers of the Bank and the Property Trustee or any order,
judgment or decree applicable to the Property Trustee or the Bank;
(e) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Bank or the Property Trustee contemplated herein or
therein require the consent or approval of, the giving of notice to, the
registration with or the taking of any other action with respect to any
governmental authority or agency under any existing federal law governing
the banking or trust powers of the Bank or the Property Trustee or under
the laws of the State of Delaware;
(f) there are no proceedings pending or, to the best of the Bank's
knowledge, threatened against or affecting the Bank or the Property Trustee
in any court or before any governmental authority, agency or arbitration
board or tribunal which, individually or in the aggregate, would materially
and adversely affect the Trust or would question the right, power and
authority of the Bank to enter into or perform its obligations as one of
the Trustees under this Trust Agreement; and
(g) the principal place of business of the Property Trustee is located
in the State of Delaware.
Section 7.02 REPRESENTATIONS AND WARRANTIES OF PARENT. The Parent hereby
represents and warrants for the benefit of the Securityholders that:
(a) this Trust Agreement has been duly authorized, executed and
delivered by Parent and constitutes the valid and legally binding agreement
of Parent enforceable against Parent in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(b) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Trustees pursuant to the
terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Securityholders will be, as of each such date,
entitled to the benefits of this Trust Agreement; and
(c) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the
State of Delaware or any political subdivision thereof in connection with
the execution, delivery and performance by the Bank or the Property
Trustee, as the case may be, of this Trust Agreement.
Article VIII
THE TRUSTEES
Section 8.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement. Notwithstanding the foregoing, no
provision of this Trust Agreement shall require the Trustees 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 for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. Whether or not therein expressly
so provided,
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every provision of this Trust Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustees shall be
subject to the provisions of this Section. No Administrative Trustee shall
be liable for its act or omission as a result of such Person's gross
negligence or willful misconduct. To the extent that, at law or in equity,
any Trustee has duties and liabilities relating to the Trust or to the
Holders, such Trustee shall not be liable to the Trust or to any Holder for
such Trustee's good faith reliance on the provisions of this Trust
Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Trustees otherwise existing at
law or in equity, are agreed by the Depositor and the Holders to replace
such other duties and liabilities of the Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust 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
Property Trustee or a Paying Agent to make payments in accordance with the
terms hereof. Each Securityholder, by its acceptance of a Trust 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 are not personally liable to it for any
amount distributable in respect of any Trust Security or for any other
liability in respect of any Trust Security. This Section 8.01(b) does not
limit the liability of the Trustees expressly set forth elsewhere in this
Trust Agreement.
(c) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically
set forth in this Trust Agreement and no implied covenants shall be read
into this Trust Agreement against the Property Trustee. In case an Event of
Default has occurred (that has not been cured or waived), the Property
Trustee shall exercise such of the rights and powers vested in it by this
Trust Agreement, 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.
(d) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Property 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 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement;
(iv) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Depositor. Money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 3.01 and except
to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for the default or misconduct of the
Administrative Trustees or the Depositor.
Section 8.02 CERTAIN NOTICES. Within five Business Days after the
occurrence of any Event of Default, the Property Trustee shall transmit, in the
manner and to the extent provided in Section 10.09, notice of any Event of
Default actually known to the Property Trustee to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived.
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Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustees shall transmit, in the
manner and to the extent provided in Section 10.09, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
Section 8.03 CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the provisions
of Section 8.01 and except as provided by law:
(a) the Property Trustee may rely and shall 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, 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 or presented by the
proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of
action or (ii) in construing any of the provisions in this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (iii) the Property Trustee is unsure
of the application of any provision of this Trust Agreement, then, except
as to any matter as to which the Capital Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken. The Property Trustee
shall take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Depositor; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days after
it has delivered such notice, or such reasonably shorter period of time set
forth in such notice (which to the extent practicable shall not be less
than two Business Days), it may, but shall be under no duty to, take or
refrain from taking such action not inconsistent with this Trust Agreement
as it shall deem advisable and in the best interests of the
Securityholders, in which event the Property Trustee shall have no
liability except for its own bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently
evidenced by an Officer's Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established
before undertaking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officer's Certificate which, upon receipt of such request, shall be
promptly delivered by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may (at the expense of Depositor) consult
with counsel (which counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees) and the written 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; the Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, 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
31
Securityholders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i) the Property 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, provided that the Property Trustee shall not be
responsible for any negligence or misconduct on the part of any such agent
or attorney appointed with due care by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder the Property Trustee (i) may request instructions from the
Holders of the Trust Securities which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Trust
Securities as would be entitled to direct the Property Trustee under the
terms of the Trust 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 protected
in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 8.04 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained herein and in the Trust Securities Certificates shall be
taken as the statements of the Trust and the Depositor, and the Trustees do not
assume any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Debentures.
Section 8.05 MAY HOLD SECURITIES. Except as provided in the definition of
the term "Outstanding" in Article I, any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and, subject to Sections 8.08 and 8.13, may
otherwise deal with the Trust with the same rights it would have if it were not
a Trustee or such other agent.
Section 8.06 COMPENSATION; INDEMNITY; FEES.
The Depositor shall:
(a) pay to the Trustees from time to time reasonable compensation for
all services rendered by them hereunder and in the case of the Property
Trustee, such compensation as is separately agreed by the Depositor and the
Property Trustee (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, 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 Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith (or, in the case of the Administrative Trustees, any such
expense, disbursement or advance as may be attributable to its, his or her
gross negligence, bad faith or willful misconduct).
(c) indemnify each of the Trustees or any predecessor Trustee for, and
to hold the Trustees harmless against, any loss, damage, claims, liability,
tax, penalty or expense of any kind and nature whatsoever incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of this Trust Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder except any such expense, disbursement or advance as
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may be attributable to such Trustee's negligence, bad faith or willful
misconduct (or, in the case of the Administrative Trustees, any such
expense, disbursement or advance as may be attributable to its, his or her
gross negligence, bad faith or willful misconduct). The provisions of this
Section 8.06 shall survive the termination of this Trust Agreement. To
secure the Trustees' rights under this Section 806, the Property Trustee
shall have a lien against the Trust Property which lien shall be
subordinate to the rights of the Securityholders but prior to the rights of
Depositor as to any Trust Property.
Section 8.07 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person
that is a national or state chartered bank and has a combined capital and
surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Trustee with respect to the Trust
Securities that shall either be (i) a natural person who is at least 21
years of age and a resident of the State of Delaware or (ii) a legal entity
with its principal place of business in the State of Delaware and that
otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
Section 8.08 CONFLICTING INTERESTS. If the Property Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Property Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Trust Agreement.
Section 8.09 CO-TRUSTEES AND SEPARATE TRUSTEE. Unless an Event of Default
shall have occurred and be continuing, at any time or times, for the purpose of
meeting the legal requirements of any jurisdiction in which any part of the
Trust Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint one or more Persons approved by the Property Trustee either
to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to the extent required by law, to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Trust Agreement. If the
Depositor does not join in such appointment within 15 days after the receipt by
it of a request so to do, or in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee alone shall also have the power to make
such appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall satisfy the requirements of Section 8.07. Should any written
instrument from the Depositor be required by any co-trustee or separate trustee
so appointed for more fully confirming to such co-trustee or separate trustee
such property, title, right, or power, any and all such instruments shall, on
request, be executed, acknowledged, and delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:
(a) The Trust Securities shall be executed by one or more
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties, and obligations hereunder
in respect of the custody of securities, cash and other personal property
held by, or required to be deposited or pledged with, the Trustees
specified hereunder, shall be exercised, solely by such Trustees and not by
such co-trustee or separate trustee.
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(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Property Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties, and obligations shall be exercised and performed by such co-trustee
or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery, and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee, or any
other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Section 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. No
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Relevant Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time with respect to the Trust Securities by giving written notice
thereof to the Securityholders. If the instrument of acceptance by a successor
Relevant Trustee required by Section 8.11 shall not have been delivered to the
Relevant Trustee within 30 days after the giving of such notice of resignation,
the resigning Relevant Trustee may petition, at the expense of the Trust, any
court of competent jurisdiction for the appointment of a successor Relevant
Trustee with respect to the Trust Securities.
Subject to the following sentence, any of the Trustees may be removed at
any time by Act of the Common Securityholder. If a Debenture Event of Default
shall have occurred and be continuing, the Property Trustee may be removed at
such time by Act of the Holders of a majority in Liquidation Amount of the
Outstanding Capital Securities, delivered to the Property Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
If the Relevant Trustee shall resign, be removed or become incapable of
continuing to act as Relevant Trustee, or if a vacancy shall occur in the office
of any Trustee for any cause, at a time when no Debenture Event of Default shall
have occurred and be continuing, the Common Securityholder, by Act of the Common
Securityholder delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and the retiring Relevant Trustee shall comply with
the applicable requirements of Section 8.11. If the Property Trustee shall
resign, be removed or become incapable of continuing to act as the Property
Trustee at a time when a Debenture Event of Default shall have occurred and be
continuing, the Capital Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Capital Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a successor
Relevant Trustee or Trustees with respect to the Trust Securities and the Trust,
and such successor Trustee shall comply with the applicable requirements of
Section 8.11. If an Administrative Trustee shall resign, be removed or become
incapable of continuing to act as Administrative Trustee at a time when a
Debenture Event of Default shall have occurred and be continuing, the Common
Securityholder may appoint a successor Administrative Trustee, which successor
Trustee shall comply with the applicable requirements of
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Section 8.11 or the Common Securityholder may reduce the number of
Administrative Trustees pursuant to Section 8.17(a). If no successor Relevant
Trustee with respect to the Trust Securities shall have been so appointed by the
Common Securityholder or the Capital Securityholders and accepted appointment in
the manner required by Section 8.11, any Securityholder who has been a
Securityholder of Trust Securities for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee with respect to
the Trust Securities.
The Relevant Trustee shall give notice of each resignation and each removal
of the Relevant Trustee with respect to the Trust Securities and the Trust and
each appointment of a successor Relevant Trustee with respect to the Trust
Securities and the Trust to all Securityholders in the manner provided in
Section 10.09 and shall give notice to the Depositor. Each notice shall include
the name of the successor Relevant Trustee with respect to the Trust Securities
and the Trust and the address of its Corporate Trust Office if it is the
Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Property Trustee who is
a natural person dies or becomes incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by (a) the
unanimous act of remaining Administrative Trustees if there are at least two of
them prior to such vacancy or (b) otherwise by the Depositor (with the successor
in each case being an individual who satisfies the eligibility requirement for
Administrative Trustees set forth in Section 8.07). Additionally,
notwithstanding the foregoing or any other provision of this Trust Agreement, in
the event the Depositor believes that any Administrative Trustee or a Property
Trustee who is a natural person, as the case may be, has become incompetent or
incapacitated, the Depositor, by notice to the remaining Trustees, may terminate
the status of such Person as an Administrative Trustee or a Property Trustee, as
the case may be (in which case the vacancy so created will be filled in
accordance with the preceding sentence).
Section 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the
appointment hereunder of a successor Relevant Trustee with respect to all Trust
Securities and the Trust, every such successor Relevant Trustee so appointed
shall execute, acknowledge and deliver to the Trust and to the retiring Relevant
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Relevant Trustee shall become effective and 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 the request of the Depositor or the successor Relevant
Trustee, such retiring Relevant Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Relevant
Trustee all the rights, powers and trusts of the retiring Relevant Trustee and
shall duly assign, transfer and deliver to such successor Relevant Trustee all
property and money held by such retiring Relevant Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee with
respect to the Trust Securities and the Trust, the retiring Relevant Trustee and
each successor Relevant Trustee with respect to the Trust Securities shall
execute and deliver an amendment hereto wherein each successor Relevant Trustee
shall accept such appointment 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 Trust Securities and the Trust and
(b) shall add to or change any of the provisions of this Trust Agreement as
shall be necessary to provide for or facilitate the administration of the Trust
hereunder by more than one Relevant Trustee, it being understood that nothing
herein or in such amendment shall constitute such Relevant Trustees co-trustees
of the Trust 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 with respect to the
Trust Securities and the Trust; 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 Trust Securities and the Trust. Upon request of any such successor
Relevant Trustee, the Trust shall execute any and all instruments for more fully
and certainly vesting in and confirming to such successor Relevant Trustee all
such rights, powers and trusts referred to in the first or second preceding
paragraph, as the case may be. No successor Relevant Trustee shall accept its
appointment unless at the time of such acceptance such successor Relevant
Trustee shall be qualified and eligible under this Article.
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Section 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF
A TRUSTEE. Any Person into which the Property Trustee or any Administrative
Trustee which is not a natural person may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of any such
Relevant Trustee, shall be the successor of such Relevant Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
Section 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Trust Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Property Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee. Nothing
herein contained shall be deemed to authorize the Property Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement adjustment or compensation affecting the Trust
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 8.14 REPORTS BY PROPERTY TRUSTEE.
(a) Not later than July 15 of each year commencing with July 15, 1999
the Property Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Securities Register, and to the
Depositor, a brief report dated as of such date with respect to: (i) its
eligibility under Section 8.07 or, in lieu thereof, if to the best of its
knowledge it has continued to be eligible under said Section, a written
statement to such effect; (ii) a statement that the Property Trustee has
complied with all of its obligations under this Trust Agreement during the
twelve-month period (or, in the case of the initial report, the period
since the Closing Date) ending with such date or, if the Property Trustee
has not complied in any material respect with such obligations, a
description of such non-compliance; and (iii) any change in the property
and funds in its possession as Property Trustee since the date of its last
report and any action taken by the Property Trustee in the performance of
its duties hereunder which it has not previously reported and which in its
opinion materially affects the Trust Securities.
(b) In addition, the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its
actions under this Trust Agreement as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Property Trustee with the PORTAL System
or any successor thereto if the Capital Securities are listed thereon, or
with the Commission (in either case as may be required by the rules
thereof) and with the Depositor.
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Section 8.15 REPORTS TO THE PROPERTY TRUSTEE. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers'
Certificate.
Section 8.17 NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, provided that the Holder of
all the Common Securities, by written instrument may increase or decrease
the number of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or
if the number of Trustees is increased pursuant to Section 8.17(a), a
vacancy shall occur. The vacancy shall be filled with a Trustee appointed
in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul, dissolve or terminate the Trust. Whenever a vacancy in
the number of Administrative Trustees shall occur, until such vacancy is
filled by the appointment of an Administrative Trustee in accordance with
Section 8.10, the Administrative Trustees in office, regardless of their
number (and notwithstanding any other provision of this Agreement), shall
have all the powers granted to the Administrative Trustees and shall
discharge all the duties imposed upon the Administrative Trustees by this
Trust Agreement.
Section 8.18 DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of
21 his or her power for the purpose of executing any documents contemplated
in Section 2.07(a), including any governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such
things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation
is not prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
Section 8.19 VOTING. Except as otherwise provided in this Trust Agreement,
the consent or approval of the Administrative Trustees shall require consent or
approval by not less than a majority of the Administrative Trustees, unless
there are only two, in which case both must consent.
Article IX
TERMINATION AND LIQUIDATION
Section 9.01 TERMINATION UPON EXPIRATION DATE. The Trust shall
automatically terminate on May 14, 2034 (the "Expiration Date") following the
distribution of the Trust Property in accordance with Section 9.04.
Section 9.02 EARLY TERMINATION. Upon the first to occur of any of the
following events (such first occurrence, an "Early Termination Event"):
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
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(b) the written direction to the Property Trustee from the Depositor
at any time (which direction is optional and wholly within the discretion
of the Depositor and subject to the approval of the Federal Reserve if then
required under the applicable capital guidelines or policies of the Federal
Reserve ) to terminate the Trust and distribute Debentures to the
Securityholders in exchange for the Capital Securities;
(c) the redemption of all of the Capital Securities in connection with
the redemption of all the Debentures, subject to approval of the Federal
Reserve if then required under the applicable capital guidelines or
policies of the Federal Reserve; and
(d) the entry of an order for dissolution of the Trust shall have been
entered by a court of competent jurisdiction.
then the Trustees shall take such action as is required by Section 4.02 or
Section 9.04, as applicable, and as soon as practicable thereafter, the Trustees
shall cause to be filed a certificate of cancellation relating to the Trust with
the Secretary of State of the State of Delaware.
Section 9.03 TERMINATION. The respective obligations and responsibilities
of the Trustees and the Trust created and continued hereby shall terminate upon
the latest to occur of the following: (a) the distribution by the Property
Trustee to Securityholders upon the liquidation of the Trust pursuant to Section
9.04, or upon the redemption of all of the Trust Securities pursuant to Section
4.02, of all amounts required to be distributed hereunder upon the final payment
of the Trust Securities; (b) the payment of any expenses owed by the Trust; (c)
the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to the
Trust or the Securityholders; and (d) the filing of a certificate of
cancellation relating to the Trust with the Secretary of State of the State of
Delaware.
Section 9.04 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.02 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, to each Securityholder a Like
Amount of Debentures, subject to approval by the Federal Reserve, if then
required under the applicable capital guidelines or policies of the Federal
Reserve, and subject to Section 9.04(d). Notice of liquidation shall be
given by the Property Trustee by first-class mail, postage prepaid, mailed
not later than 30 nor more than 60 days prior to the Liquidation Date to
each Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.04(d) applies, receive a Liquidation
Distribution, as the Administrative Trustees or the Property Trustee
shall deem appropriate.
(b) Except where Section 9.02(c) or 9.04(d) applies, in order to
effect the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for
such distribution (which shall be not more than 45 days prior to the
Liquidation Date) and, either itself acting as exchange agent or through
the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of
Debentures in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.02 (c) or 9.04(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) The Depository Trust Company or its nominee, as the
record Holder of
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the Capital Securities, will receive a registered global certificate
representing the Debentures to be delivered upon such distribution, (iii)
any Capital Securities Certificates not held by The Depository Trust
Company or its nominee will be deemed to represent a Like Amount of
Debentures, bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributors on such Trust Certificates until such
certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders
of Trust Securities Certificates with respect to such Debentures), (iv)
certificates representing a Like Amount of Debentures will be issued to the
Holder of the Common Securities Certificates, upon surrender of such
certificates to the Administrative Trustees or their agent for exchange,
(v) all rights of Securityholders holding Trust Securities will cease,
except the right of such Securityholders to receive Debentures upon
surrender of Trust Securities Certificates, and (vi) the Depositor shall
use its best efforts to have the Debentures listed for quotation on the
PORTAL system or such other quotation system as the Capital Securities are
then listed, if any.
(d) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for dissolution entered by a
court of competent jurisdiction or payment at the stated maturity thereof
of all principal of and interest on the Debentures or otherwise,
distribution of the Debentures in the manner provided herein is determined
by the Property Trustee not to be practical, the Trust Property shall be
liquidated, subject to approval of the Federal Reserve, if then required
under the applicable capital guidelines or policies of the Federal Reserve,
and the Trust shall be dissolved, wound-up or terminated, by the Property
Trustee in such manner as the Property Trustee determines. In such event,
on the date of the dissolution, winding-up or other termination of the
Trust, Securityholders will be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
liabilities to creditors, an amount equal to the Liquidation Amount per
Trust Security plus accumulated and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If,
upon any such dissolution, winding up or termination, 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, subject to the next succeeding sentence, the amounts payable by the
Trust on the Trust Securities shall be paid on a pro rata basis (based upon
Liquidation Amounts). The Holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such dissolution, winding-up
or termination pro rata (determined as aforesaid) with Holders of Capital
Securities, except that, if an Event of Default specified in Section 501(1)
or 501(2) of the Indenture has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities. In the event
the Capital Securities are issued in certificated form, the Liquidation
Distribution will be payable at (i) the Corporate Trust Office of the
Property Trustee, (ii) the principal office of any Paying Agent, or (iii)
the principal office of the Securities Registrar; provided payment of any
Liquidation Distribution may be made, at the option of the Administrative
Trustees, by check mailed to the address of the Person entitled thereto as
such address shall appear on the Securities Register or by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Securities
Register.
Section 9.05 MERGER, CONSOLIDATION, AMALGAMATION OR REPLACEMENT OF THE
TRUST. The Trust may not merge, consolidate or amalgamate 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 Person, except pursuant
to this Section 9.05. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Capital
Securities or the Property Trustee, the Trust may merge, consolidate or
amalgamate with or into, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that (a) such successor entity either (i)
expressly assumes all of the obligations of the Trust with respect to the
Capital Securities or (ii) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (b) the Depositor expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Debentures, (c) the Successor Securities
are approved for quotation on the PORTAL System, (d) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (e) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Capital Securities (including any Successor Securities) in any material respect,
(f) such successor entity has a purpose substantially identical to that of the
Trust, (g) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Depositor
39
has received an opinion from independent counsel to the Trust experienced in
such matters to the effect that (i) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Capital Securities (including
any Successor Securities) in any material respect, and (ii) following such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act and (h) the Depositor or any
permitted successor or assignee owns all of the common securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of 100% in Liquidation Amount of the Capital Securities, 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 other entity or
permit any other entity to consolidate, amalgamate or merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement, conveyance,
transfer or lease would cause the Trust or the successor entity to be classified
as other than a grantor trust for United States federal income tax purposes.
Article X
MISCELLANEOUS PROVISIONS
Section 10.01 EXPENSE AGREEMENT. It is the contemplation of the parties
that the Expense Agreement shall be entered into no later than May 14, 1999.
Section 10.02 LIMITATION OF RIGHTS OF SECURITYHOLDERS. The death,
incapacity, liquidation, dissolution, termination or bankruptcy of any Person
having an interest, beneficial or otherwise, in Trust Securities shall not
operate to terminate this Trust Agreement, nor entitle the legal representatives
or heirs of such Person or any Securityholder for such Person, to claim an
accounting, take any action or bring any proceeding in any court for a partition
or winding up of the arrangements contemplated hereby, nor otherwise affect the
rights, obligations and liabilities of the parties hereto or any of them.
Section 10.03 AMENDMENT. (a) This Trust Agreement may be amended from time
to time by the Trustees and the Depositor, without the consent of any
Securityholders, (i) with respect to acceptance of appointment by a successor
Trustee, (ii) to cure any ambiguity, correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Trust
Agreement, provided such amendment is not inconsistent with the other provisions
of this Trust Agreement, or (iii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States Federal income tax purposes as a
grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act of 1940, as amended; provided,
however, that in the case of either clause (ii) or clause (iii), such action
shall not adversely affect in any material respect the interests of any
Securityholder and any amendments of this Trust Agreement shall become effective
when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.03(c) hereof, any provision of
this Trust Agreement may be amended by the Trustees and the Depositor with
(i) the consent of Trust Securityholders representing not less than a
majority in Liquidation Amount of the Trust Securities then Outstanding and
(ii) the receipt by the Trustees of an Opinion of Counsel to the effect
that such amendment or the exercise of any power granted to the Trustees in
accordance with such amendment will not affect the Trust's status as a
grantor trust for United States Federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment
Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06 hereof),
this Trust Agreement may not be amended to (i) change the amount or timing
of any Distribution on the Trust Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a
Securityholder to institute suit for the enforcement of any such payment on
or after such date; notwithstanding any other provision herein without the
unanimous consent of the Securityholders (such
40
consent being obtained in accordance with Section 6.03 or 6.06 hereof),
paragraph (b) of this Section 10.03 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust
Agreement which would cause the Trust to (i) fail or cease to qualify, as
evidenced by an Opinion of Counsel, for an exemption from status of an
"investment company" under the Investment Company Act, or (ii) fail or
cease to be classified, as evidenced by an Opinion of Counsel, as a grantor
trust for United States federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this
Trust Agreement may not be amended in a manner which imposes any additional
obligation on the Depositor or the Administrative Trustees.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy
of such amendment.
(g) The Property Trustee shall not be required to enter into any
amendment to this Trust Agreement which affects its own rights, duties or
immunities under this Trust Agreement. The Property Trustee shall be
entitled to receive an Opinion of Counsel and an Officers' Certificate
stating that any amendment to this Trust Agreement is in compliance with
this Trust Agreement.
Section 10.04 SEVERABILITY. In case any provision in this Trust Agreement
or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.05 GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE DEPOSITOR, THE TRUST AND THE
TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE
WITHOUT REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS.
Section 10.06 PAYMENTS DUE ON NON-BUSINESS DAY. If the date fixed for any
payment on any Trust Security shall be a day which is not a Business Day, then
such payment need not be made on such date but may be made on the next
succeeding day which is a Business Day (except as otherwise provided in Section
4.01(a) and 4.02(d)), with the same force and effect as though made on the date
fixed for such payment, and no Distribution shall accumulate on such unpaid
amount thereon for the period after such date.
Section 10.07 SUCCESSORS. This Trust Agreement shall be binding upon and
shall inure to the benefit of any successor to the Depositor, the Trust or any
Relevant Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article VIII of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
Section 10.08 HEADINGS. The Article and Section headings are for
convenience only and shall not affect the construction of this Trust Agreement.
Section 10.09 REPORTS, NOTICES AND DEMANDS. Any report, notice, demand or
other communication which by any provision of this Trust Agreement is required
or permitted to be given or served to or upon any Securityholder or the
Depositor shall be given or served in writing by deposit thereof, postage
prepaid, in the United States mail, hand delivery or facsimile transmission, in
each case, addressed, (a) in the case of a Capital Securityholder, to such
Capital Securityholder as such Securityholder's name and address may appear on
the Securities Register; and (b) in the case of the Common Securityholder or the
Depositor, to North Country Financial Corporation, 130 South Cedar Street,
Manistique, Michigan 49854, Attention: Mr. Ronald G. Ford, Facsimile No.: (906)
341-8702. Such notice,
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demand or other communication to or upon a Securityholder shall be deemed to
have been sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as follows:
(a) with respect to the Property Trustee, to Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Trust Administration; and (b) with respect to the
Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Administrative Trustees of North Country Capital
Trust." Such notice, demand or other communication to or upon the Trust or the
Property Trustee shall be deemed to have been sufficiently given or made only
upon actual receipt of the writing by the Trust or the Property Trustee.
Section 10.10 AGREEMENT NOT TO PETITION. Each of the Trustees and the
Depositor agree for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
IX, they shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, reorganization, arrangement, insolvency, liquidation or
other similar law (including, without limitation, the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.10, the Property Trustee
agrees, for the benefit of Securityholders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Property Trustee
or the Trust may assert. The provisions of this Section 10.10 shall survive the
termination of this Trust Agreement.
Section 10.11 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that would be required to be part of this Trust Agreement if
this Trust Agreement is qualified thereunder, and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which would be required to be included in this
Trust Agreement by any of the provisions of the Trust Indenture Act,
pursuant to Section 10.11(a) hereof, such required provision shall control.
If any provision of this Trust Agreement modifies or excludes any provision
of the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Trust Agreement as so modified
or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as securities representing
undivided beneficial interests in the assets of the Trust.
Section 10.12 RIGHTS UNDER INDENTURE. The Trust may not assign any of its
rights under the Indenture without the prior written consent of the Depositor.
Section 10.13 EFFECTIVENESS. This Trust Agreement shall become effective
when signed by the Depositor and the Bank.
Section 10.14 INTENTION OF THE PARTIES. It is the intention of the parties
hereto that the Trust not be characterized for United States federal income tax
purposes as a corporation or a partnership, but rather that the Trust be
characterized as a grantor trust or otherwise in a manner and that each Owner be
treated as owning an undivided beneficial interest in the assets of the Trust.
The provisions of this Trust Agreement shall be interpreted to further this
intention of the parties.
42
Section 10.15 COUNTERPARTS. This Trust Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.16 ACCEPTANCE OF TERMS OF TRUST AGREEMENT GUARANTEE AND
INDENTURE. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE AND
THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
[signatures appear on the following page]
43
NORTH COUNTRY FINANCIAL CORPORATION
as Depositor
By: /s/ Ronald G. Ford
Name: Ronald G. Ford
Title: Chief Executive Officer and President
WILMINGTON TRUST COMPANY,
as Property Trustee
By: /s/ Emmett R. Harmon
Name: Emmett R. Harmon
Title: Vice President
/s/ Ronald G. Ford
Name: Ronald G. Ford
Title: Administrative Trustee
/s/ Sherry L. Littlejohn
Name: Sherry L. Littlejohn
Title: Administrative Trustee
/s/ Paul J. Hinkson
Name: Paul J. Hinkson
Title: Administrative Trustee
44
EXHIBIT A
TRUST AGREEMENT
This TRUST AGREEMENT is made this 22nd day of April, 1999 (this "Trust
Agreement"), by and among (i) North Country Financial Corporation, a Michigan
corporation (the "Depositor"), (ii) Wilmington Trust Company, a Delaware banking
corporation, as trustee, and (iii) Ronald G. Ford, Sherry L. Littlejohn and Paul
J. Hinkson, each an individual, as trustees (each of such trustees in (ii) and
(iii) a "Trustee" and collectively, the "Trustees"). The Depositor and the
Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as "North Country
Capital Trust," in which name the Trustees, or the Depositor to the extent
provided herein, may engage in the transactions contemplated hereby, make and
execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10.00. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitutes a business trust under Chapter 38 of Title 12
of the Delaware Code, 12 Del. C. Section 3801, et seq. (the "Business Trust
Act"), and that this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in accordance with the
provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement, satisfactory to each such party, to provide for the
contemplated operation of the Trust created hereby and the issuance of the
Capital Securities and Common Securities referred to therein. Prior to the
execution and delivery of such amended and restated Trust Agreement, the
Trustees shall not have any duty or obligation hereunder or with respect to the
trust estate, except as otherwise required by applicable law or as may be
necessary to obtain prior to such execution and delivery of any licenses,
consents or approvals required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to prepare a Confidential Offering
Memorandum in accordance with the provisions of Regulation D under the
Securities Act of 1933, as amended, for the purposes of offering for sale the
Capital Securities of the Trust and possibly certain other securities; (ii) to
file and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process and
other papers and documents as shall be necessary or desirable to register the
Capital Securities under the securities or blue sky laws of such jurisdictions
as the Depositor, on behalf of the Trust, may deem necessary or desirable; and
(iii) to execute on behalf of the Trust that certain Purchase Terms Agreement
relating to the Capital Securities, among the Trust,
-1-
the Depositor and the Underwriter named therein. In the event that any filing
referred to in clause (ii) above is required by the rules and regulations of the
state securities or blue sky laws to be executed on behalf of the Trust by one
or more of the Trustees, each of the Trustees, in its or his capacity as a
Trustee of the Trust, is hereby authorized and, to the extent so required,
directed to join in any such filing and to execute on behalf of the Trust any
and all of the foregoing, it being understood that Wilmington Trust Company in
its capacity as a Trustee of the Trust shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required by
the rules and regulations of the state securities or blue sky laws. In
connection with the filings referred to above, the Depositor and Ronald G. Ford,
Sherry L. Littlejohn and Paul J. Hinkson, each as Trustees and not in their
individual capacities, hereby constitutes and appoints Ronald G. Ford, Sherry L.
Littlejohn and Paul J. Hinkson, and each of them, as its true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the Depositor or such Trustee or in the Depositor's or such
Trustees' name, place and stead, in any and all capacities, to sign any and all
amendments to the Confidential Offering Memorandum and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
administrators of the state securities or blue sky laws, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Depositor or such Trustee might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their respective substitute or
substitutes, shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be four, and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Depositor which may increase or decrease the
number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon 30 days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws of
principles).
-2-
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
NORTH COUNTRY FINANCIAL CORPORATION
as Depositor
By: ________________________________
Ronald G. Ford
Chief Executive Officer
WILMINGTON TRUST COMPANY
as Trustee
By: ________________________________
Its: ________________________________
NORTH COUNTRY CAPITAL TRUST
By: ________________________________
Ronald G. Ford
as Trustee
By: ________________________________
Sherry L. Littlejohn
as Trustee
By:________________________________
Paul J. Hinkson
as Trustee
::ODMA\PCDOCS\GRR\267784\5
-3-
EXHIBIT B
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF
THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST
AGREEMENT
Certificate Number C-1 Number of Common Securities _________
Certificate Evidencing Common Securities
of
North Country Capital Trust
Floating Rate Common Securities
(Liquidation amount $1,000 per Common Security)
North Country Capital Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that North Country
Financial Corporation (the "Holder") is the registered owner of ________
(________) common securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the Floating Rate Common
Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). Except in accordance with Section 5.10 of the Trust Agreement (as
defined below) the Common Securities are not transferable and any attempted
transfer hereof other than in accordance therewith shall be void. The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this certificate and
the Common Securities represented hereby are issued and shall in all respects be
subject to the terms and provisions of, the Amended and Restated Trust Agreement
of the Trust dated as of ___________________, 1999, among the Holder, as
Depositor, Wilmington Trust Company, as Property Trustee, the Administrative
Trustees named therein, and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust, as the same may be amended from
time to time (the "Trust Agreement") including the designation of the terms of
the Common Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in the Trust
Agreement.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ____ day of _____________, 199__.
NORTH COUNTRY CAPITAL TRUST
By: ______________________________________
Name: ___________________________________
Title: Administrative Trustee
[3174.sl]
EXHIBIT C
[INSERT IF THE CAPITAL SECURITY IS TO BE A GLOBAL CERTIFICATE - This
Capital Security is a Global Capital Securities Certificate within the meaning
of the Trust Agreement hereinafter referred to and is registered in the name of
The Depository Trust Company, a New York corporation (the "DTC") or a nominee of
the DTC. This Capital Security is exchangeable for Capital Securities
Certificates registered in the name of a person other than the DTC or its
nominee only in the limited circumstances described in the Trust Agreement and
no transfer of this Capital Security (other than a transfer of this Capital
Security as a whole by the DTC to a nominee of the DTC or by a nominee of the
DTC) may be registered except in limited circumstances described in the Trust
Agreement.
Unless this Capital Security is presented by an authorized representative
of the DTC to North Country Capital Trust or its agent for registration of
transfer, exchange or payment, and any Capital Securities Certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of the DTC (and any payment hereon is made to Cede &
Co. or to such other entity as requested by an authorized representative of the
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL, since the registered owner hereof, Cede & Co., has an
interest herein.]
Certificate Number P- CUSIP NO. ________
Number of Capital Securities _________
Certificate Evidencing Capital Securities
of
North Country Capital Trust
Floating Rate Capital Securities
(Liquidation amount $1,000 per Capital Security)
North Country Capital Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of _______________
(___________) Capital Securities of the Trust representing an undivided
beneficial interest in the assets of the Trust and designated the North Country
Capital Floating Rate Capital Securities (liquidation amount $1,000 per Capital
Security) (the "Capital Securities"). 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
as provided in Section 5.04 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities are set forth in, and this certificate and
the Capital Securities represented hereby and issued and shall in all respects
be subject to the terms and provisions of, the Amended and Restated Trust
Agreement of the trust dated as of ___________________, 1999, among North
Country Financial Corporation, a Michigan corporation, as Depositor, Wilmington
Trust Company, as Property Trustee, the Administrative Trustees named therein,
and the holders, from time to time, of undivided beneficial interests in the
assets of the Trust, as the same may be amended from time to time (the "Trust
Agreement") including the designation of the terms of Capital Securities as set
forth therein. The Holder is entitled to the benefits of the Guarantee Agreement
entered into by North Country Financial Corporation, a Michigan corporation, and
Wilmington Trust Company as guarantee trustee, dated as of ___________________,
1999 (the "Guarantee") to the extent provided therein. The Trust will furnish a
copy of the Trust Agreement and the Guarantee to the Holder without charge upon
written request to the Trust at its principal place of business or registered
office.
1
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate as of the date hereof.
Dated: NORTH COUNTRY CAPITAL TRUST
By: _____________________________________
Name: ___________________________________
Title: Administrative Trustee
CERTIFICATE OF AUTHENTICATION
This is one of the Floating Rate Capital Securities referred to in the
Amended and Restated Trust Agreement.
WILMINGTON TRUST COMPANY,
as Authentication Agent and Registrar
By: _____________________________________
Name: ___________________________________
Title: __________________________________
2
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security 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(s) Guaranteed: The signature(s) should be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.
THIS CAPITAL SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL 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, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL
3
ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH NORTH COUNTRY FINANCIAL
CORPORATION (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) AS LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) 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, (E) TO AN INDIVIDUAL
ACCREDITED INVESTOR WITHIN THE MEANING OF SUBPARAGRAPH (A)(5) OR (6) OF RULE 501
UNDER THE SECURITIES ACT, RESIDING IN ONE OF THE JURISDICTIONS AUTHORIZED BY THE
COMPANY, THAT IS PURCHASING THE CAPITAL SECURITIES FOR ITS OWN ACCOUNT 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 UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE
TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN
THE FORM OF APPENDIX D TO THE OFFERING MEMORANDUM DATED MAY 7, 1999, AND (iii)
PURSUANT TO CLAUSE (E) TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUST OR
OTHER TRANSFER AGENT A QUESTIONNAIRE AND INVESTMENT AGREEMENT, EACH OF WHICH IS
AVAILABLE FROM THE COMPANY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.
::ODMA\PCDOCS\GRR\267784\5
4
EXHIBIT 10.7
NORTH COUNTRY FINANCIAL CORPORATION
AND
WILMINGTON TRUST COMPANY
As Trustee
----------------
Junior Subordinated Indenture
Dated as of May 14, 1999
$12,836,000
Aggregate Principal Amount of
Floating Rate Junior Subordinated Debentures
CROSS REFERENCE TABLE
Sections 310 through 318 of the Trust Indenture Act of 1939, as amended:
Trust Indenture Indenture
Act Section Section
Section 310(a)(1)............................................... 609
(a)(2)................................................ 609
(a)(3)................................................ Not Applicable
(a)(4)................................................ Not Applicable
(b)................................................... 608,610
Section 311(a).................................................. 613
(b)................................................... 613
Section 312(a).................................................. 701
702(a)
(b)................................................... 702(b)
(c)................................................... 702(c)
Section 313(a).................................................. 703(a)
(a)(4)................................................ 101, 1004
(b)................................................... 703(a)
(c)................................................... 703(a)
(d)................................................... 703(b)
Section 314(a).................................................. 704
(b)................................................... Not Applicable
(c)(1)................................................ 102
(c)(2)................................................ 102
(c)(3)................................................ Not Applicable
(d)................................................... Not Applicable
(e)................................................... 102
Section 315(a).................................................. 601
(b)................................................... 602
(c)................................................... 601
(d)................................................... 601
(e)................................................... 514
Section 316(a).................................................. 101
(a)(1)(A)............................................. 502
512
(a)(1)(B)............................................. 513
(a)(2)................................................ Not Applicable
(b)................................................... 508
(c)................................................... 104(c)
Section 317(a)(1)............................................... 503
(a)(2)................................................ 504
(b)................................................... 1003
Section 318(a).................................................. 107
NOTE: THIS CROSS-REFERENCE TABLE DOES NOT CONSTITUTE PART OF THIS INDENTURE
AND SHALL NOT AFFECT THE INTERPRETATION OF ANY OF ITS TERMS.
2
TABLE OF CONTENTS
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions..................................................8
SECTION 102. Compliance Certificates and Opinions........................14
SECTION 103. Form of Opinion Documents Delivered to Trustee..............14
SECTION 104. Acts of Holders; Record Dates...............................15
SECTION 105. Notices, Etc., to Trustee and the Company...................16
SECTION 106. Notice to Holders; Waiver...................................16
SECTION 107. Conflict with Trust Indenture Act...........................17
SECTION 108. Effect of Headings and Table of Contents....................17
SECTION 109. Successors and Assigns......................................17
SECTION 110. Severability Clause.........................................17
SECTION 111. Benefits of Indenture.......................................17
SECTION 112. Governing Law...............................................17
SECTION 113. Non-Business Days...........................................18
ARTICLE TWO
Debenture Forms
SECTION 201. Forms Generally.............................................18
SECTION 202. Form of Face of Debenture...................................18
SECTION 203. Form of Reverse of Debenture................................21
SECTION 204. Additional Provisions Required in Global Security...........23
SECTION 205. Form of Trustee's Certificate of Authentication.............24
ARTICLE THREE
The Debentures
SECTION 301. Title and Terms; Paying Agent...............................25
SECTION 302. Denominations...............................................28
SECTION 303. Execution, Authentication, Delivery and Dating..............28
SECTION 304. Temporary Debentures........................................28
SECTION 305. Registration, Registration of Transfer and Exchange.........29
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debentures............32
SECTION 307. Payment of Interest; Interest Rights Preserved..............32
SECTION 308. Persons Deemed Owners.......................................33
SECTION 309. Cancellation................................................33
SECTION 310. Computation of Interest.....................................34
SECTION 311. Right of Set-Off............................................34
SECTION 312. Agreed Tax Treatment........................................34
SECTION 313. CUSIP Numbers...............................................34
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.....................34
SECTION 402. Application of Trust Money..................................35
SECTION 403. Legal and Covenant Defeasance of Debentures.................35
3
ARTICLE FIVE
Remedies
SECTION 501. Events of Default...........................................38
SECTION 502. Acceleration of Maturity; Rescission and Annulment..........39
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee................................40
SECTION 504. Trustee May File Proofs of Claim............................40
SECTION 505. Trustee May Enforce Claims Without Possession of
Debentures............................................41
SECTION 506. Application of Money Collected..............................41
SECTION 507. Limitation on Suits.........................................41
SECTION 508. Unconditional Right of Holders to Receive Principal
and Interest..........................................42
SECTION 509. Restoration of Rights and Remedies..........................42
SECTION 510. Rights and Remedies Cumulative..............................42
SECTION 511. Delay or Omission Not Waiver................................42
SECTION 512. Control by Holders..........................................42
SECTION 513. Waiver of Past Defaults.....................................43
SECTION 514. Undertaking for Costs.......................................43
SECTION 515. Waiver of Usury, Stay or Extension Laws.....................44
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.........................44
SECTION 602. Notice of Defaults..........................................45
SECTION 603. Certain Rights of Trustee...................................45
SECTION 604. Not Responsible for Recitals or Issuance of
Debentures............................................46
SECTION 605. May Hold Securities.........................................46
SECTION 606. Money Held in Trust.........................................46
SECTION 607. Compensation; Reimbursement; and Indemnity..................46
SECTION 608. Disqualification; Conflicting Interests.....................47
SECTION 609. Corporate Trustee Required; Eligibility.....................47
SECTION 610. Resignation and Removal; Appointment of Successor...........47
SECTION 611. Acceptance of Appointment by Successor......................48
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business..............................................49
SECTION 613. Preferential Collection of Claims Against Company...........49
SECTION 614. Appointment of Authenticating Agent.........................49
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders............................................51
SECTION 702. Preservation of Information; Communications to
Holders...............................................51
SECTION 703. Reports by Trustee..........................................52
SECTION 704. Reports by Company..........................................52
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms........52
SECTION 802. Successor Substituted.......................................53
4
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders..........53
SECTION 902. Supplemental Indentures With Consent of Holders.............54
SECTION 903. Execution of Supplemental Indentures........................54
SECTION 904. Effect of Supplemental Indentures...........................55
SECTION 905. Conformity with Trust Indenture Act.........................55
SECTION 906. Reference in Securities to Supplemental Indentures..........55
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. Payment of Principal and Interest...........................55
SECTION 1002. Maintenance of Office or Agency.............................55
SECTION 1003. Money for Debenture Payments to Be Held in Trust............56
SECTION 1004. Statement by Officers as to Compliance......................56
SECTION 1005. Additional Sums.............................................57
SECTION 1006. Additional Covenants........................................57
SECTION 1007. Waiver of Certain Covenants.................................58
ARTICLE ELEVEN
Subordination of Debentures
SECTION 1101. Debentures Subordinate to Senior Debt.......................58
SECTION 1102. Payment Over of Proceeds Upon Dissolution, Etc..............58
SECTION 1103. Prior Payment to Senior Debt Upon Acceleration
of Debentures.........................................59
SECTION 1104. No Payment When Senior Debt in Default......................60
SECTION 1105. Payment Permitted If No Default.............................60
SECTION 1106. Subrogation to Rights of Holders of Senior Debt.............60
SECTION 1107. Provisions Solely to Define Relative Rights.................60
SECTION 1108. Trustee to Effectuate Subordination.........................61
SECTION 1109. No Waiver of Subordination Provisions.......................61
SECTION 1110. Notice to Trustee...........................................61
SECTION 1111. Reliance on Judicial Order or Certificate of
Liquidating Agent.....................................62
SECTION 1112. Trustee Not Fiduciary for Holders of Senior Debt............62
SECTION 1113. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights...................................62
SECTION 1114. Article Applicable to Paying Agents.........................62
SECTION 1115. Certain Conversions or Exchanges Deemed Payment.............62
ARTICLE TWELVE
Redemption of Debentures
SECTION 1201. Applicability of this Article...............................63
SECTION 1202. Election to Redeem; Notice to Trustee.......................63
SECTION 1203. Selection by Trustee of Debentures to Be Redeemed...........63
SECTION 1204. Notice of Redemption........................................63
SECTION 1205. Deposit of Redemption Price.................................64
SECTION 1206. Debentures Payable on Redemption Date.......................64
SECTION 1207. Optional Redemption; Conditions to Optional Redemption......65
5
ARTICLE THIRTEEN
Miscellaneous
SECTION 1301. Counterparts................................................65
6
INDENTURE, dated as of May 14, 1999, between North Country Financial
Corporation, a Michigan corporation (herein called the "Company"), having its
principal office at 130 South Cedar Street, Manistique, Michigan 49854 and
Wilmington Trust Company, a banking corporation duly organized and existing
under the laws of Delaware, as Trustee (herein called the "Trustee"). Unless
otherwise defined herein, all capitalized items used herein shall have the
meanings ascribed to them in the Amended and Restated Trust Agreement between
the Company, as Depositor and Wilmington Trust Company, Ronald G. Ford, an
individual, Sherry L. Littlejohn, an individual, and Paul J. Hinkson, an
individual, as trustees, and the holders, from time to time, of undivided
beneficial interests in the assets of the Trust, dated as of May 14, 1999 (the
"Trust Agreement"), as in effect on the date hereof, the form of which is
attached as Annex A hereto.
RECITALS OF THE COMPANY
WHEREAS, North Country Capital Trust (the "Trust") will, pursuant to the
Purchase Terms Agreement dated May 7, 1999 among the Company, the Trust and
First Tennessee Capital Markets (the "Placement Agent"), issue$12,836,000
aggregate liquidation amount of its Floating Rate Capital Securities (the
"Capital Securities" and, together with the Common Securities, the "Trust
Securities") with a liquidation amount of $1,000 per Capital Security;
WHEREAS, the parties hereto desire that this Indenture be subject to the
provisions of the Trust Indenture Act of 1939, as amended, that would be
required to be part of this Indenture (if the Indenture was subject by law to
such act), and shall, to the extent applicable, be governed by such provisions;
WHEREAS, the Company is guaranteeing the payment of distributions on the
Capital Securities of the Trust and payment of the Redemption Price and payments
on liquidation with respect to the Capital Securities, to the extent provided in
the Guarantee Agreement dated as of May 14, 1999, between the Company and
Wilmington Trust Company as guarantee trustee (the "Parent Guarantee") for the
benefit of the holders of the Capital Securities;
WHEREAS, the Company wishes to sell to the Trust, and the Trust wishes to
purchase from the Company, Debentures (as defined below) in an aggregate
principal amount of $12,836,000 and in satisfaction of the purchase price for
such Debentures, the trustees of the Trust, on behalf of the Trust, wish to (i)
execute and deliver to the Company Common Securities certificates evidencing an
ownership interest in the Trust, registered in the name of the Company, in an
aggregate amount of 386 Common Securities having an aggregate liquidation amount
of $386,000 and (ii) deliver to the Company the sum of $12,836,000.
WHEREAS, the Company has duly authorized the creation and issuance of an
issue of its unsecured Floating Rate Junior Subordinated Debentures (the
"Debentures," and, individually, a "Debenture"), of substantially the tenor and
amount hereinafter set forth issued to evidence loans made to the Company of the
proceeds from the issuance by the Trust of the Capital Securities and Common
Securities, to provide the terms and conditions upon which the Debentures are to
be authenticated, issued and delivered and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make the Debentures, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debentures
by the Holder thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Debentures, as follows:
7
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. DEFINITIONS.
For all purposes of this Indenture and any indenture supplemental hereto,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings
assigned to them therein (except as otherwise expressly provided
herein or unless the context otherwise requires);
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall
mean such accounting principles which are generally accepted at the
date or time of such computation; provided, that when two or more
principles are so generally accepted, it shall mean that set of
principles consistent with those in use by the Company; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"3-Month LIBOR" has the meaning specified in Section 301.
"Act," when used with respect to any Holder, has the meaning specified in
Section 104.
"Additional Interest" means interest, if any, that shall accrue on any
interest on the Debentures the payment of which has not been made on the
applicable Interest Payment Date and which shall accrue at the Coupon Rate,
compounded quarterly (to the extent permitted by law).
"Additional Sums" has the meaning specified in Section 1005.
"Additional Taxes" means the sum of any additional taxes, duties and other
governmental charges to which the Trust has become subject from time to time as
a result of a Tax Event.
"Administrative Trustees" means each Person identified as an
"Administrative Trustee" in the Trust Agreement, solely in such Person's
capacity as Administrative Trustee of the Trust under such Trust Agreement and
not in such Person's individual capacity, or any successor administrative
trustee appointed as therein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
8
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security, the rules and procedures of the Depositary for such
Global Security, in each case to the extent applicable to such transaction and
as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Debentures.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors or such committee of the Board of Directors or officers of the
Company to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed or a day on which the Corporate Trust
Office of the Trustee, or the principal office of the Property Trustee under the
Trust Agreement, is closed for business.
"Capital Securities" has the meaning specified in the Recitals to this
Indenture.
"Capital Treatment Event" means the receipt by the Trust or the Company 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
agency thereof, or any official administrative pronouncement or judicial
interpreting or applying such laws or regulations, that there is more than an
insubstantial risk that the Capital Securities will no longer qualify as Tier 1
Capital (or the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Federal Reserve; provided, however, that a Capital Treatment
Event may not be triggered by the Company having excess cumulative preferred
capital which may not qualify as Tier 1 Capital.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities" means undivided beneficial interests in the assets of
the Trust, having a Liquidation Amount of $1,000 per Common Security and having
the rights provided therefor in the Trust Agreement.
"Common Stock" means the common stock, without par value, of the Company.
"Company" means North Country Financial Corporation, a corporation duly
organized and existing under the laws of the State of Michigan and subject to
the applicable provisions of this Indenture, shall also include its successors
and assigns.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its Vice Chairman of the Board, its President or a Vice
President, and by its Chief Financial Officer, the Controller, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
9
"Corporate Trust Office" means the principal office of the Trustee in the
City of Wilmington, Delaware, at which at any particular time its corporate
trust business shall be administered and which at the date of this Indenture is
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890.
"Corporation" includes a corporation, association, company, limited
liability company, joint-stock company or business trust.
"Coupon Rate" has the meaning specified in Section 301.
"Debenture" or "Debentures" shall have the meaning set forth in the
recitals hereto.
"Debenture Holder," "Holder of Debentures," "registered holder" or other
similar term shall mean a Person in whose name a Debenture is registered in the
Debenture Register.
"Debenture Register" and "Debenture Registrar" have the respective meanings
specified in Section 305.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Debentures issuable or issued in
whole or in part in the form of one or more Global Securities, the Person
designated as Depositary by the Company pursuant to this Indenture or any
successor thereto.
"Distributions," with respect to the Capital Securities issued by North
Country Capital Trust, means amounts payable in respect of such Capital
Securities as provided in the Trust Agreement and referred to therein as
"Distributions."
"Distribution Period" has the meaning specified in Section 301.
"Event of Default" has the meaning specified in Section 501.
"Expense Agreement" means the Expense Agreement contemplated by Section
607.
"Extension Period" has the meaning specified in Section 301.
"Global Security" means a Debenture in the form prescribed in Section 204
evidencing all or part of the Debentures, issued to the Depositary or its
nominee, and registered in the name of such Depositary or its nominee.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
10
"Government Obligations" means, with respect to the Debentures, securities
which are (i) direct obligations of the United States of America or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed by the United States of America and which, in either
case, are full faith and credit obligations of the United States of America and
are not callable or redeemable at the option of the issuer thereof and shall
also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to
any such Government Obligation or a specific payment of interest on or principal
of any such Government Obligation held by such custodian for the account of the
holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act, if any, that are deemed to be a part of
and govern this instrument and any such supplemental indenture, respectively.
"Interest Payment Date," when used with respect to any installment of
interest on a Debenture, means the date specified in such Debenture as the fixed
date on which an installment of interest with respect to the Debentures is due
and payable.
"Investment Company Event" means the receipt by the Company or 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 a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
the Trust or the Company is or will be considered an "investment company" that
is required to be registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), which Change in 1940 Act Law becomes
effective on or after the date of original issuance of the Debentures.
"Junior Subordinated Payment" has the meaning specified in Section 1102.
"Maturity," when used with respect to any Debenture, means the date on
which the principal of such Debenture becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, a Vice Chairman of the Board, the President
or a Vice President, and by the Chief Financial Officer, the Controller, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial, investment or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (and who may be an employee of the Company), and who shall be
acceptable to the Trustee.
"Outstanding," when used with respect to Debentures, means, as of the date
of determination, all Debentures theretofore authenticated and delivered under
this Indenture, except: (i) Debentures theretofore canceled by the Trustee or
any Paying Agent or delivered to the Trustee or any Paying Agent for
cancellation; (ii) Debentures for whose payment or redemption money or
Governmental Obligations in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Debentures, provided that, if such
Debentures are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Debentures which have been paid pursuant to Section 306, or
in exchange for or in lieu of which other Debentures have been authenticated and
delivered pursuant to this Indenture,
11
other than any such Debentures in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Debentures are held
by Holders in whose hands such Debentures are valid, binding and legal
obligations of the Company; provided, however, that in determining whether the
Holders of the requisite principal amount of Outstanding Debentures have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Debentures owned by the Company or any other obligor upon the
Debentures or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Debentures which the
Trustee knows to be so owned shall be so disregarded. Debentures so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and that the pledgee is not the Company or any
other obligor upon the Debentures or any Affiliate of the Company or such other
obligor. Upon the written request of the Trustee, the Company shall furnish to
the Trustee promptly an Officers' Certificate listing and identifying all
Debentures, if any, known by the Company to be owned or held by or for the
account of the Company, or any other obligor on the Debentures or any Affiliate
of the Company or such obligor, and, subject to the provisions of Section 601,
the Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Debentures not
listed therein are Outstanding for the purpose of any such determination.
"Parent Guarantee" has the meaning specified in the Recitals to this
Indenture.
"Paying Agent" means any Person authorized by the Company to pay the
principal (or premium, if any) of or interest on, or other amounts in respect
of, any Debentures on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Debenture" of any particular Debenture means every previous
Debenture evidencing all or a portion of the same debt as that evidenced by such
particular Debenture; and, for the purposes of this definition, any Debenture
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Debenture shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Debenture.
"Proceeding" has the meaning specified in Section 1102.
"Property Trustee" means the commercial bank or trust company identified as
the "Property Trustee" in the Trust Agreement, solely in its capacity as
Property Trustee under such Trust Agreement and not in its individual capacity,
or its successor in interest in such capacity, or any successor property trustee
appointed as therein provided.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
promulgated under the Securities Act of 1933, as amended.
"Redemption Date," when used with respect to any Debenture to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Debenture to be redeemed,
has the meaning specified in Section 1207.
"Regular Record Date" for the interest payable on any Interest Payment Date
means, for so long as the Capital Securities remain in book-entry form, one
Business Day prior to the relevant Interest Payment Date and, in the event the
Capital Securities are not in book-entry form, the day which is fifteen days
prior to the date the relevant Interest Payment Date occurs.
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
12
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures; provided, however, that Senior
Debt shall not be deemed to include (a) any Debt of the Company which, when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Company, (b) any Debt
of the Company to any of its Subsidiaries, (c) Debt to any employee of the
Company, (d) trade accounts payable of the Company, (e) accrued liabilities
arising in the ordinary course of business of the Company, (f) the Debentures,
and (g) the Parent Guarantee.
"Special Event" means an Investment Company Event, a Tax Event, or a
Capital Treatment Event.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Debenture or any
installment of principal thereof or interest thereon, means May 14, 2029, the
date on which the principal, together with any accrued and unpaid interest, of
such Debenture or such installment of interest is due and payable, or if the
Company elects to accelerate the maturity date in accordance with Section 1207
hereof, such earlier date as the Company selects, but in no event before May 14,
2009.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Tax Event" means the receipt by the Trust or the Company 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 any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of 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 of Counsel, subject to United
States federal income tax with respect to interest income received or accrued on
the Debentures, (ii) interest payable by the Company on the Debentures is not,
or within 90 days of the date of such Opinion of Counsel will not be, deductible
by the Company, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
Opinion of Counsel, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Trust" means North Country Capital Trust, a Delaware business trust
declared and established pursuant to the Delaware Business Trust Act (12 Del.
Code Section 3801 et. seq.) by the Trust Agreement.
"Trust Agreement" has the meaning specified in the first paragraph of this
Indenture.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as amended and
as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
13
"Trust Securities" has the meaning specified in the Recitals to this
Indenture.
"Vice President," when used with respect to the Company or the Trustee,
means any duly appointed vice president, whether or not designated by a number
or a word or words added before or after the title "vice president."
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition precedent),
if any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all conditions precedent (including covenants compliance with which
constitute a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished. Every certificate or opinion delivered with respect
to compliance with a condition or covenant provided for in this Indenture (other
than the certificate provided pursuant to Section 1004) shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definitions herein relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Officers' 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.
SECTION 103. FORM OF OPINION DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
14
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee at the address
specified in Section 105 and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to him
the execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The
fact and date of the execution by any Person of any such instrument or
writing, or the authority of the Person executing the same, may also
be proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, but shall not be obligated, to fix any day as the record date for
the purpose of determining the Holders entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or
other action, or to vote on any action, authorized or permitted to be
given or taken by Holders. Except as otherwise provided herein, if not
set by the Company prior to the first solicitation of a Holder made by
any Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 701) prior to
such first solicitation or vote, as the case may be. With regard to
any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the
relevant action, whether or not such Persons continue to be Holders
after such record date; provided, however, that unless such vote or
consent is obtained from the Holders (or their duly designated
proxies) of the requisite principal amount of Outstanding Debentures
prior to the Expiration Date (as defined below), any such vote or
consent previously given shall automatically and without further
action by any Holder be canceled and of no further effect and nothing
in this paragraph shall be construed to render ineffective any action
taken by Holders of the requisite principal amount of Outstanding
Debentures on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Debentures in the manner set
forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in
the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 502, (iii) any
request to institute proceedings referred to in Section 507(2), or
(iv) any direction referred to in Section 512. If any record date is
set pursuant to this paragraph, the Holders of Outstanding Debentures
on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such
Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Debentures on such record date. Nothing in this
paragraph shall be construed to prevent
15
the Trustee from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action
taken by Holders of the requisite principal amount of Outstanding
Debentures on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Debentures in the manner set
forth in Section 106.
With respect to any record date set pursuant to this Section, the
party hereto that sets such record date may designate any date as the
"Expiration Date" and from time to time may change the Expiration Date
to any earlier or later date, provided that no such change shall be
effective unless notice of the proposed new Expiration Date is given
to the other party hereto in writing, and to each Holder of Debentures
in the manner set forth in Section 106, on or prior to the existing
Expiration Date. If an Expiration Date is not designated with respect
to any record date set pursuant to this Section, the party hereto that
set such record date shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect
thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the applicable
record date.
(d) The ownership of Debentures shall be proved by the Debenture Register
or by a certificate of the Debenture Registrar.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture issued
upon the registration of transfer thereof or in exchange therefor or
in lieu thereof in respect of anything done, omitted or suffered to be
done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Debenture.
(f) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Debenture may do so
with regard to all or any part of the principal amount of such
Debenture or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
principal amount.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Administration or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by
16
such event, at his address as it appears in the Debenture Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
Notwithstanding the non-qualification of this Indenture under the Trust
Indenture Act, if any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that would be required under such Act to be
a part of and govern this Indenture if this Indenture were to be so qualified,
the latter provision shall control. If any provision of this Indenture modifies
or excludes any provision of the Trust Indenture Act that may be so modified or
excluded, such provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be. SECTION 108. EFFECT OF HEADINGS
AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
The Company will have the right at all times to assign any of its rights or
obligations under this Indenture to a direct or indirect wholly-owned subsidiary
of the Company; provided, that, in the event of any such assignment, the Company
will remain liable for all such obligations. The Trust may not assign any of its
rights under this Indenture without the prior written consent of the Company.
This Indenture is not otherwise assignable by the parties hereto. Subject to the
foregoing, this Indenture shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, whether so expressed or not.
SECTION 110. SEVERABILITY CLAUSE.
In case any provision in this Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent and their
successors and assigns hereunder, the holders of Senior Debt, the holders of
Capital Securities (to the extent provided herein) and the Holders of
Debentures, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN WITHOUT REFERENCE TO ITS
CONFLICTS OF LAWS PROVISIONS. THIS INDENTURE IS DEEMED TO BE SUBJECT TO THE
PROVISIONS
17
OF THE TRUST INDENTURE ACT OF 1939, AS AMENDED, THAT ARE REQUIRED TO BE PART OF
THIS INDENTURE AND SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH
PROVISIONS.
SECTION 113. NON-BUSINESS DAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debenture shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Debentures) payment of interest or
principal (and premium, if any) or other amounts in respect of the Debentures
need not be made on such date, but may be made on the next succeeding Business
Day in each case (except that, if such Business Day is in the next succeeding
calendar year, payment shall be made on the immediately preceding Business Day)
in each case with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, provided that no interest
shall accrue in respect of the amounts whose payment is so delayed for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
ARTICLE TWO
Debenture Forms
SECTION 201. FORMS GENERALLY. The Debentures and the Trustee's certificates of
authentication shall be in substantially the forms set forth in this Article,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture.
The definitive Debentures shall be printed, lithographed or engraved or
produced by any combination of these or other methods, if required by any
securities exchange on which the Debentures may be listed, on a steel engraved
border or steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Debentures may be
listed, all as determined by the officers executing such Debentures, as
evidenced by their execution of such Debentures.
SECTION 202. FORM OF FACE OF DEBENTURE.
THE DEBENTURES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH DEBENTURES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT.
NORTH COUNTRY FINANCIAL CORPORATION
Floating Rate Junior Subordinated Debenture
No. 1 $__________________
North Country Financial Corporation, a Michigan corporation (herein called
the "Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to North
Country Capital Trust, the principal sum of _______________ DOLLARS
($________________) on May 14, 2029 (the "Stated Maturity").
The Company further promises to pay interest on said principal sum from May
14, 1999 or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on February 14,
May 14, August 14 and November 14 of each year, commencing August 14, 1999, at a
rate per annum of 7.50% beginning on (and including) the date of original
issuance and ending on (but excluding) August 14, 1999 and at a rate per annum
for each successive period beginning on (and including) August 14, 1999, and
each succeeding Interest Payment Date, and ending on (but
18
excluding) the next succeeding Interest Payment Date (each a "Distribution
Period"), determined by reference to 3- Month LIBOR, determined as described
below, plus 2.50% applied to the principal amount hereof, until the principal
hereof is paid or duly provided for or made available for payment, and on any
overdue principal and (without duplication) on any overdue installment of
interest at the same rate per annum, compounded quarterly, from the dates such
amounts are due until they are paid or made available for payment. As used
herein, "Determination Date" means the date that is two London Banking Days
(i.e., a day in which dealings in deposits in U. S. dollars are transacted in
the London interbank market) preceding the commencement of the relevant
Distribution Period. The amount of interest payable for any period less than a
full interest period will be computed on the basis of actual days elapsed and a
360-day year. In the event that any date on which interest is payable on this
Debenture is not a Business Day, then a payment of the interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on the date the payment was originally payable.
The interest installment so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Debenture (or one or more Predecessor Securities, as
defined in the Indenture) is registered at the close of business on the Regular
Record Date for such interest installment, which shall be fifteen days prior to
the day on which the relevant Interest Payment Date occurs. Any such interest
installment not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Debenture (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date.
"3-Month LIBOR" as used herein, means the London interbank offered rate for
three-month, Eurodollar deposits determined by the Trustee (as defined in the
Indenture) in the following order of priority: (i) the rate (expressed as a
percentage per annum) for Eurodollar deposits having a three-month maturity that
appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the particular
Determination Date ("Telerate Page 3750" means the display designated as "Page
3750" on the Dow Jones Telerate Service or such other page as may replace Page
3750 on that service or such other service or services as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollars deposits); (ii) if
such rate does not appear on Telerate Page 3750 as of 11:00 a.m. (London time)
on the Determination Date, 3-Month LIBOR will be the arithmetic mean of the
rates (expressed as percentages per annum) for Eurodollar deposits having a
three-month maturity that appear on Reruters Monitor Money Rates Page LIBO
("Reuters Page LIBO") as of 11:00 a.m. (London time) on such Determination Date;
(iii) if such rate does not appear on Reuters Page LIBO as of 11:00 a.m. (London
time) on the related Determination Date, the Trustee will request the principal
London offices of four leading banks in the London interbank market to provide
such banks' offered quotations (expressed as percentages per annum) to prime
banks in the London interbank market for Eurodollar 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; (iv) if fewer than two such quotations are provided as
requested in clause (iii) above, the Trustee will request four major New York
City banks to provide such banks' offered quotations (expressed as percentages
per annum) to leading European banks for loans in Eurodollars 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 (v)
if fewer than two such quotations are provided as requested in clause (iv)
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 Eurodollar deposits having a three-month maturity that initially
appears on Telerate Page 3750 or Reuters Page LIBO, as the cause may be, as of
11:00 a.m. (London time) on the related Determination Date is superseded on the
Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a corrected rate
between 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 (as defined in the Indenture) for any Distribution
Period will at no time be higher than the maximum rate then permitted by
Michigan law as the same may be modified by United States law.
All percentages resulting from any calculations on the Debentures will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
19
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).
So long as no event of default with respect to this Debenture has occurred
and is continuing, the Company shall have the right at any time during the term
of this Debenture, from time to time, to defer the payment of interest on such
Debenture from time to time for up to twenty consecutive quarters with respect
to each deferral period (each an "Extension Period"), during which period
interest will compound quarterly and the Company shall have the right to make
partial payments of interest on any Interest Payment Date, and at the end of
which Extension Period the Company shall pay all interest then accrued and
unpaid including any Additional Interest; provided, however, that no Extension
Period shall extend beyond the Stated Maturity of the principal of this
Debenture as then in effect; provided further that during any such Extension
Period, the Company shall not, and shall cause any Subsidiary of the Company not
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
outstanding capital stock, (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt security of the
Company ranking pari passu with or junior in interest to this Debenture or make
any guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary of the Company that by their terms rank pari passu
or junior in interest to this Debenture, (iii) sell, lease, license, transfer or
otherwise dispose of any asset or interest therein or (iv) with respect to the
Company, make any capital contributions or similar advances to its Subsidiaries;
provided, however, that the foregoing restrictions shall not prevent (a) any
such transaction (other than transactions described in clause (iv) above) in the
ordinary course of business or in immaterial amounts, (b) a reorganization of
Subsidiaries of the Company so long as the Company's percentage ownership
interest in such Subsidiaries does not decrease, (c) dividends or distributions
in Common Stock of the Company, (d) payments under the guarantee of the Company
with respect to payments of distributions and payments on liquidation or
redemption of the Capital Securities, but only in each case to the extent of
funds held by the Issuer thereof or under any other similar guarantee by the
Company with respect to any other securities of any of its Subsidiaries,
provided that the proceeds of the issuance of such securities were used to
purchase debt securities of the Company that rank pari passu with or junior to
this Debenture and (e) purchases of Common Stock of the Company in connection
with the issuance of Common Stock of the Company under any of the Company's
benefit plans for directors, officers or employees. Prior to the termination of
any such Extension Period, the Company may further defer the interest payments,
provided that no Extension Period shall exceed twenty consecutive quarters or
extend beyond the Stated Maturity of this Debenture. Upon the termination of any
such Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due, the Company may elect to begin a new
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest (to the extent that the
payment of such interest shall be legally enforceable) as provided in the
Indenture, compounded quarterly and calculated as set forth in the first
paragraph of this Debenture, from the dates on which amounts would otherwise
have been due and payable until paid or made available for payment. The Company
shall give the Trustee and the Administrative Trustees notice of its election to
begin an Extension Period at least two Business Days prior to the earliest of
(i) the date interest on this Debenture would have been payable except for the
election to begin such Extension Period or (ii) the next succeeding date such
distributions on the Trust Securities would have been payable except for the
election to begin such Extension Period.
In the event that the holders of the Capital Securities are owed 20
dividends in arrears, any individual holder has the right to ask the Trustee to
enforce its acceleration rights as outlined in the Indenture. The Trustee may or
may not elect to enforce such acceleration rights.
The principal and interest (including any Additional Interest) on this
Debenture shall be payable at the office or agency as the Company may designate
from time to time for that purpose in the United States, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made, except in the case of
Debentures in global form, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Debenture Register or (ii)
by transfer to an account maintained by the Person entitled thereto as specified
in the Debenture Register; provided that proper transfer instructions have been
received by the Regular Record Date.
20
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Debt, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
holder of Senior Debt, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, North Country Financial Corporation has caused this
instrument to be duly executed under its corporate seal.
Dated:
North Country Financial Corporation
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
ATTEST:
_________________________________
SECTION 203. FORM OF REVERSE OF DEBENTURE.
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its Floating Rate Junior Subordinated Debentures (herein
called the "Debentures"), limited in aggregate principal amount to $12,836,000
issued under an Indenture, dated as of May 14, 1999 (herein called the
"Indenture"), between the Company and Wilmington Trust Company, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Trustee, the Company and the
Holders of the Debentures, and of the terms upon which the Debentures are, and
are to be, authenticated and delivered.
All terms used in this Debenture which are defined in the Indenture or in
the Trust Agreement attached as Annex A thereto shall have the meanings assigned
to them in the Indenture or the Trust Agreement, as the case may be.
At any time on or after May 14, 2009, the Company shall have the right,
subject to the terms and conditions of Article Twelve of the Indenture, to
redeem this Debenture at the option of the Company, without premium or penalty,
in whole at any time or in part from time to time, at the Redemption Price as
defined in Article 12 of the Indenture.
21
If a Special Event as defined in the Indenture shall occur and be
continuing prior to May 14, 2009, the Company shall have the right, subject to
the terms and conditions of Article Twelve of the Indenture, to redeem this
Debenture at the option of the Company, without premium or penalty, in whole but
not in part, within 90 days following the occurrence of such Special Event,
subject to the provisions of Section 1207 and other provisions of Article Twelve
of the Indenture, at the Redemption Price. Any redemption pursuant to this
paragraph will be made upon not less than 30 nor more than 60 days' notice, at
the Redemption Price. If the Debentures are only partially redeemed by the
Company, the Debentures will be redeemed pro rata.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Debentures shall occur and be
continuing, the principal of the Debentures may be declared due and payable in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for satisfaction and discharge and
defeasance at any time of the entire indebtedness of this Debenture upon
compliance by the Company with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, to modify the Indenture in a
manner affecting the rights of the Holders of the Debentures; provided that no
such modification may, without the consent of the Holder of each Outstanding
Debenture affected thereby, (i) change the fixed maturity of the Debentures or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or (ii) reduce the percentage of principal amount
of the Debentures, the Holders of which are required to consent to any such
modification of the Indenture; provided, that, so long as any of the Capital
Securities remains Outstanding, no such modification may be made that adversely
affects the Holders of the Capital Securities, and no termination of the
Indenture may occur, and no waiver of any Event of Default or compliance with
any covenant under the Indenture may be effective, without the prior consent of
the Holders of at least a majority of the aggregate Liquidation Amount (as
defined in the Trust Agreement) of the Outstanding Capital Securities unless and
until the principal of the Debentures and all accrued and unpaid interest
(including any Additional Interest) thereon have been paid in full. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Debentures at the time Outstanding, on behalf of the
Holders of all Debentures, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Debenture
shall be conclusive and binding upon such Holder and upon all future Holders of
this Debenture and of any Debenture issued upon the registration of transfer
hereof or in exchange therefore or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Debenture.
As provided in and subject to the provisions of the Indenture, if an Event
of Default with respect to the Debentures at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities may declare
the principal amount of all the Debentures to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given by Holders),
provided that, if upon an Event of Default the Trustee or such Holders fail to
declare the principal of all the Outstanding Securities to be immediately due
and payable, the holders of at least 25% in aggregate Liquidation Amount of the
Capital Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee; and upon any
such declaration the principal amount of and the accrued interest (including any
Additional Interest) on all the Debentures shall become immediately due and
payable, provided that the payment of principal and interest (including any
Additional Interest) on such Debentures shall remain subordinated to the extent
provided in Article Eleven of the Indenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
22
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Debenture is registrable in the Debenture Register,
upon surrender of this Debenture for registration of transfer at the office or
agency of Wilmington Trust Company in Wilmington, Delaware, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to
Wilmington Trust Company, as the Debenture Registrar, duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company or Wilmington Trust Company may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
SECTION 204. ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 202, 203 and 305, bear legends in substantially the
following form:
This Debenture is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of The Depository Trust
Company, a New York corporation ("DTC") or a nominee of DTC. This Debenture is
exchangeable for Debentures registered in the name of a person other than DTC or
its nominee only in the limited circumstances described in the Indenture and no
transfer of this Debenture (other than a transfer of this Debenture as a whole
by DTC to a nominee of DTC or by a nominee of DTC to DTC or another nominee of
DTC) may be registered except in limited circumstances.
Unless this Debenture is presented by an authorized representative of DTC
to North Country Financial Corporation or its agent for registration of
transfer, exchange or payment, and any Debenture issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment hereon is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.
23
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Debentures referred to in the within-mentioned
Indenture.
__________________________________
AS TRUSTEE
___________________________________
AUTHORIZED OFFICER
24
ARTICLE THREE
The Debentures
SECTION 301. TITLE AND TERMS; PAYING AGENT.
(a) The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is limited to
$15,464,000 except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Debentures pursuant to Section 304, 305, 306, 906 or 1208.
(b) The Debentures shall be known and designated as the "Floating Rate
Junior Subordinated Debentures" of the Company. Their Stated Maturity
shall be May 14, 2029, or if the Company elects to accelerate the
maturity date in accordance with Section 1207 hereof, such earlier
date as the Company selects, but in no event before May 14, 2009.
(c) Each Debenture shall bear interest for the period beginning on (and
including) the date of original issuance and ending on (but excluding)
August 14, 1999 at a rate per annum of 7.50%, and shall bear interest
for each successive period beginning on (and including) August 14,
1999, and each succeeding Interest Payment Date, and ending on (but
excluding) the next succeeding Interest Payment Date (each, a
"Distribution Period") at a rate per annum determined by reference to
the 3- Month LIBOR, determined as described in Section 301(e), plus
2.50% (the "Coupon Rate") applied to the principal amount thereof,
until the principal thereof becomes due and payable, and on any
overdue principal and to the extent that payment of such interest is
enforceable under applicable law (without duplication) on any overdue
installment of interest at the Coupon Rate compounded quarterly.
Interest shall be payable (subject to any relevant Extension Period)
quarterly in arrears on February 14, May 14, August 14 and November 14
of each year (each, an "Interest Payment Date"), with the first
installment of interest to be paid on August 14, 1999, to the Person
in whose name such Debenture or any predecessor Debenture is
registered, at the close of business on the regular record date for
such interest installment, which shall be fifteen days prior to the
relevant Interest Payment Date.
(d) The amount of interest payable for any period shall be computed on the
basis of actual days elapsed and a 360-day year. In the event that any
date on which interest is payable on the Debentures is not a Business
Day, then payment of interest payable on such date shall be made on
the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay) with the same
force and effect as if made on the date such payment was originally
payable. The amount of interest payable will be calculated by applying
the Coupon Rate to the principal amount outstanding at the
commencement of the Distribution Period and multiplying each such
amount by the actual number of days in the Distribution Period
concerned divided by 360. All percentages resulting from any
calculations on the Debentures will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upward (e.g., 9.876545%
or .09876545) being rounded to 9.87655% (or .0987655), and all dollar
amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward).
(e) "3-Month LIBOR" means the London interbank offered rate for
three-month, Eurodollar deposits determined by the Trustee in the
following order of priority:
(i) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a three-month maturity that appears on Telerate
Page 3750 as of 11:00 a.m. (London time) on the particular
Determination Date (as defined below. "Telerate Page 3750" means
the display designated as "Page 3750" on the Dow Jones Telerate
Service or such other page as may replace Page
25
3750 on that service or such other service or services as may be
nominated by the British Bankers' Association as the information
vendor for the purpose of displaying London interbank offered
rates for U.S. dollars deposits;
(ii) if such rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on the Determination Date, 3-Month LIBOR will
be the arithmetic mean of the rates (expressed as percentages per
annum) for Eurodollar deposits having a three-month maturity that
appear on Reruters Monitor Money Rates Page LIBO ("Reuters Page
LIBO") as of 11:00 a.m. (London time) on such Determination Date;
(iii) if such rate does not appear on Reuters Page LIBO as of 11:00
a.m. (London time) on the related Determination Date, the Trustee
will request the principal London offices of four leading banks
in the London interbank market to provide such banks' offered
quotations (expressed as percentages per annum) to prime banks in
the London interbank market for Eurodollar 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;
(iv) if fewer than two such quotations are provided as requested in
clause (iii) above, the Trustee will request four major New York
City banks to provide such banks' offered quotations (expressed
as percentages per annum) to leading European banks for loans in
Eurodollars 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
(v) if fewer than two such quotations are provided as requested in
clause (iv) 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
Eurodollar deposits having a three-month maturity that initially
appears on Telerate Page 3750 or Reuters Page LIBO, as the cause
may be, as of 11:00 a.m. (London time) on the related
Determination Date is superseded on the Telerate Page 3750 or
Reuters Page LIBO, as the case may be, by a corrected rate
between 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.
(vi) The Distribution Rate for any Distribution Period will at no time
be higher than the maximum rate then permitted by Michigan law as
the same may be modified by United States law.
(vii) "Determination Date" means the date that is two London Banking
Days (i.e., a day in which dealings in deposits in U.S. dollars
are transacted in the London interbank market) preceding the
particular Distribution Period for which a Distribution Rate is
being determined.
(f) The Trustee shall notify the Company, the Property Trustee and any
securities exchange or interdealer quotation system on which the
Capital Securities are listed, of the Coupon Rate and the
Determination Date for each Distribution Period, in each case as soon
as practicable after the determination thereof but in no event later
than the seventh Business Day of the relevant Distribution Period.
Failure to notify the Company, the Property Trustee or any securities
exchange or interdealer quotation system, or any defect in said
notice, shall not affect the obligation of the Company to make payment
on the Debentures at the applicable Coupon Rate. Any error in the
calculation of the Coupon Rate by the Property Trustee may be
corrected at any time by notice delivered as above provided. Upon the
request of a holder of a Capital Security, the Trustee shall provide
the Coupon Rate then in effect and, if determined, the Coupon Rate for
the next Distribution Period.
26
(g) Subject to the corrective rights set forth above, all certificates,
communications, opinions, determinations, calculations, quotations and
decisions given, expressed, made or obtained for the purposes of the
provisions relating to the payment and calculation of interest on the
Debentures and Distributions on the Capital Securities by the Trustee
or the Property Trustee will (in the absence of willful default, bad
faith and manifest error) be final, conclusive and binding on the
Trust, the Company, and all of the holders of the Debentures and the
Capital Securities, and no liability shall (in the absence of willful
default, bad faith or manifest error) attach to the Trustee or the
Property Trustee in connection with the exercise or non-exercise by
either of them or their respective powers, duties and discretion.
So long as no Event of Default hereunder has occurred and is continuing,
the Company shall have the right, at any time during the term of the Debentures,
to defer the payment of interest on such Debentures from time to time, for up to
twenty consecutive quarters (each, an "Extension Period") during which Extension
Periods interest will compound quarterly and the Company shall have the right to
make partial payments of interest on any Interest Payment Date. At the end of
any such Extension Period the Company shall pay all interest then accrued and
unpaid on the Debentures (together with Additional Interest thereon, if any, at
the rate specified for the Debentures to the extent permitted by applicable
law), provided, however, that during any such Extension Period, neither the
Company nor any Subsidiary shall (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's outstanding capital stock, (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company ranking pari passu with or junior in
interest to the Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any Subsidiary of the Company
that by their terms rank pari passu or junior in interest to the Debentures,
(iii) sell, lease, license, transfer or otherwise dispose of any asset or
interest therein or (iv) with respect to the Company, make any capital
contributions or similar advances to its Subsidiaries; provided, however, that
the foregoing restrictions shall not prevent (a) any such transaction (other
than transactions described in clause (iv) above) in the ordinary course of
business or in immaterial amounts, (b) a reorganization of Subsidiaries of the
Company so long as the Company's percentage ownership interest in such
Subsidiaries does not decrease, (c) dividends or distributions in Common Stock
of the Company, (d) payments under the guarantee of the Company with respect to
payments of distributions and payments on liquidation or redemption of the
Capital Securities, but only in each case to the extent of funds held by the
Issuer thereof or under any other similar guarantee by the Company with respect
to any other securities of any of its Subsidiaries, provided that the proceeds
of the issuance of such securities were used to purchase debt securities of the
Company that rank pari passu with or junior to this Debenture and (e) purchases
of Common Stock of the Company in connection with the issuance of Common Stock
of the Company under any of the Company's benefit plans for directors, officers
or employees. Prior to the termination of any such Extension Period, the Company
may further defer the interest payment period, provided that no Extension Period
shall exceed twenty consecutive quarters or extend beyond the Stated Maturity of
the Debentures. Upon the termination of any Extension Period and upon the
payment of all accrued and unpaid interest and any Additional Interest then due,
the Company may elect to begin a new Extension Period, subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The Company shall give the Trustee and the
Administrative Trustees notice of its election to begin any such Extension
Period.
The Trustee shall promptly give notice of the Company's election to begin
any such Extension Period to the Holders of the Outstanding Debentures.
The principal and Additional Interest, if any, and interest on the
Debentures shall be payable at the office of such Paying Agent or Paying Agents
as the Company may designate for such purpose from time to time, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made, except in the case of
Debentures in global form, (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Debenture Register or (ii)
by transfer to an account maintained by the Person entitled thereto as specified
in the Debenture Register; provided that proper transfer instructions have been
received by the Regular Record Date.
27
The Company designates Wilmington Trust Company as the initial Paying Agent
with respect to the Debentures. The Company may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent or approve a change
in the office through which any Paying Agent acts pursuant to Section 1002.
The Debentures shall be subordinated in right of payment to Senior Debt as
provided in Article Eleven.
The Debentures shall be redeemable as provided in Article Twelve.
SECTION 302. DENOMINATIONS.
The Debentures shall be issuable only in registered form, without coupons,
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Debentures shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its Chief Financial Officer, its
Chief Executive Officer, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Debentures
may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debentures executed by the Company to the
Trustee for authentication. Debentures may be authenticated on original issuance
from time to time and delivered pursuant to such procedures acceptable to the
Trustee ("Procedures") as may be specified from time to time by Company Order.
Procedures may authorize authentication and delivery pursuant to oral
instructions of the Company or a duly authorized agent, which instructions shall
be promptly confirmed in writing.
Prior to the delivery of a Debenture in any such form to the Trustee for
authentication, the Company shall deliver to the Trustee a Company Order
requesting the Trustee's authentication and delivery of all or a portion of the
Debentures, and if less than all, setting forth procedures for such
authentication. The Trustee in accordance with such Company Order shall
authenticate and deliver such Debentures as in this Indenture provided and not
otherwise.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder.
SECTION 304. TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Debentures which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Debentures in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Debentures may determine, as evidenced by their
execution of such Debentures.
28
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Debentures the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Debentures
having the same date of issuance and Stated Maturity and having the same terms
as such temporary Debentures. Until so exchanged the temporary Debentures shall
in all respects be entitled to the same benefits under this Indenture as
definitive Debentures.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee or at such other location as may be designated by the Company a register
(the register maintained in such office and in any other office or agency
designated pursuant to Section 1002 being herein sometimes collectively referred
to as the "Debenture Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of
Debentures and of transfers of Debentures. The Trustee is hereby appointed
"Debenture Registrar" for the purpose of registering Debentures and transfers of
Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture (duly endorsed
or with the form of transfer endorsed thereon duly executed) at the office of
the Debenture Registrar or at an office or agency of the Company designated
pursuant to Section 1002 for such purpose, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Debentures of any authorized denominations, of a
like tenor and aggregate principal amount, having the same date of issuance,
Stated Maturity and terms.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like tenor and aggregate
principal amount having the same date of issuance, Stated Maturity and terms,
upon surrender of the Debentures to be exchanged at such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Debentures which
the Holder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar duly executed by the
Holder thereof or his attorney duly authorized in writing. Such transfer or
exchange will be effected upon the Debenture Registrar or the Company, as the
case may be, being satisfied with the documents of title and identity of the
Person making the request.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Debentures, but the Company or the Debentures Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Debentures, other than exchanges pursuant to Section 304, 906 or
1208 not involving any transfer.
Notwithstanding any other provision in this Indenture, a Global Security
may not be exchanged in whole or in part for Debentures registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security, or a nominee
thereof, unless (i) such Depository advises the Company in writing that such
Depositary is no longer willing or able to continue as Depositary with respect
to such Global Security, and the Depositary is unable to locate a qualified
successor, (ii) there shall have occurred and be continuing an Event of Default,
or (iii) the Company determines in its sole discretion not to have the
Debentures represented by one or more Global Securities and so advises the
Depositary in writing.
29
If a Global Security is to be exchanged for Debentures or canceled in
whole, it shall be surrendered by or on behalf by or on behalf of the Depositary
or its nominee to the Debenture Registrar for exchange or cancellation as
provided herein. If a Global Security is to be exchanged for Debentures or
canceled in part, or if a beneficial interest that is represented by a Global
Security is to be transferred to another Debenture Holder whose beneficial
interest will be represented by another Global Security, then either (i) such
Global Security shall be surrendered for exchange or cancellation as provided
herein or (ii) the aggregate principal amount of the applicable Global Security
shall be reduced (and, in the case of a transfer of beneficial interests to
another Global Security, such other Global Security shall be increased) by an
amount equal to the portion thereof to be so exchanged, cancelled or transferred
by means of an appropriate adjustment made on the records of the Debenture
Registrar, whereupon the Company, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of the Global Security by the Depositary the Company shall, subject hereto, sign
and make available for delivery any executed Debentures or Global Securities
delivered to it issuable in exchange for such Global Securities (or any portion
thereof) in accordance with the instructions of the Depositary. The Company
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions.
Neither the Company nor the Debenture Registrar shall be required, pursuant
to the provisions of this Section, to register the transfer of or exchange any
Debenture so selected for redemption in whole or in part, except, in the case of
any Debenture to be redeemed in part, any portion thereof not to be redeemed.
Notwithstanding any other provision of this Indenture, transfers and
exchanges of Debentures and beneficial interests in a Global Security shall be
made only as follows:
(a) Non-Global Security to Non-Global Security. A Debenture that
is not a Global Security may be transferred, in whole or in
part, to a Person who takes delivery in the form of another
Debenture that is not a Global Security.
(b) Exchanges Between Global Security and Non-Global Security. A
beneficial interest in the Global Security may be exchanged
for a Debenture that is not a Global Security only as provided
above.
(c) Limitations Relating to Principal Amount. Notwithstanding any
other provision of this Indenture and unless otherwise
specified as permitted by this Indenture, Debentures or
portions thereof may be transferred or exchanged only in
principal amounts of not less than $100,000 and integral
multiples of $1,000 in excess thereof. Any transfer, exchange
or other disposition of Debentures in contravention hereof
shall be deemed to be void and of no legal effect whatsoever,
any such transferee shall be deemed not to be the Holder or
owner of any beneficial interest in such Debentures for any
purpose, including but not limited to the receipt of interest
payable on such Debentures, and such transferee shall be
deemed to have no interest whatsoever in such Debentures.
(d) Restricted Debentures Legend
(i) Except as set forth in this Section 305, all
Debentures shall bear a restricted Debentures legend
substantially in the following form:
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS DEBENTURE 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, SUCH REGISTRATION.
30
THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS DEBENTURE, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH NORTH COUNTRY FINANCIAL CORPORATION (THE
"COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS DEBENTURE (OR
ANY PREDECESSOR OF THIS DEBENTURE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) AS LONG AS THIS DEBENTURE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
DEBENTURE 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 (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR
(E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR
OTHER INFORMATION SATISFACTORY TO IT, AND (ii) PURSUANT TO CLAUSE (D) TO REQUIRE
THAT THE TRANSFEROR DELIVER TO THE COMPANY A LETTER FROM THE TRANSFEREE
SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED MAY 7,
1999. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
(ii) Subject to the following paragraphs of this Section
305(e), a new Debenture (other than a Global
Security) that does not bear a restricted Debentures
legend may be issued in exchange for or in lieu of a
restricted Debenture or any portion thereof that
bears such a legend if, in the Company's judgment,
placing such a legend upon such new Debenture is not
necessary to ensure compliance with the registration
requirements of the Securities Act, and a new
Debenture shall be authenticated and delivered as
provided in this Section 305.
(iii) Notwithstanding the foregoing provisions of this
Section 305(e), a successor Debenture of a Debenture
that does not bear a restricted Debentures legend
shall not bear such form of legend unless the Company
has reasonable cause to believe that such successor
Debenture is a "restricted Debenture" within the
meaning of Rule 144 under the Securities Act, in
which case a new Debenture bearing a restricted
Debentures legend in exchange for such successor
Debenture as provided in this Section 305.
(iv) Upon any sale or transfer of a restricted Debenture
(including any restricted Debenture represented by a
Global Security) pursuant to an effective
registration statement under the Securities Act or
pursuant to Rule 144 under the Securities Act after
such registration ceases to be effective: (A) in the
case of any restricted Debenture that is a definitive
Debenture, the Debenture Registrar shall permit the
Holder thereof to exchange such Restricted Debenture
for a definitive Debenture that does not bear the
Restricted Debentures Legend and rescind any
restriction on the transfer of such Restricted
Debenture; and (B) in the case of any Restricted
Debenture that is represented by a Global Security,
the Debenture Registrar shall permit the Holder of
such Global Security to exchange such Global Security
for another Global Security that does not bear the
Restricted Debentures Legend.
(v) If restricted Debentures are being presented or
surrendered for transfer or exchange then there shall
be (if so required by the Company), (A) if such
restricted Debentures are being delivered to the
Debenture Registrar by a Holder for registration in
the name of such Holder,
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without transfer, a certification from such Holder to
that effect; or (B) if such restricted Debentures are
being transferred and if the Company or Debenture
Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the
restrictions set forth in the restricted Debentures
legend.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES.
If any mutilated Debenture is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Debenture of like tenor and
aggregate principal amount and bearing a number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Debenture and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Debenture has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Debenture, a new Debenture of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest and Additional Interest on any Debenture which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Debenture (or one or more Predecessor
Debentures) is registered at the close of business on the Regular Record Date
for such interest payment except that, unless otherwise provided in the
Debentures, interest and any Additional Interest payable on the Stated Maturity
of the principal of a Debenture shall be paid to the Person to whom principal is
paid.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for (except during an Extension Period), on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) are registered at the
close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each
Debenture and the date of the proposed payment, and at the
same
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time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of
such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date
and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as
it appears in the Debenture Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close
of business on such Special Record Date.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debenture shall carry the rights to interest accrued
and unpaid, and to accrue (including in each such case Additional Interest),
which were carried by such other Debenture.
SECTION 308. PERSONS DEEMED OWNERS.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name such Debenture is registered as the owner of such
Debenture for the purpose of receiving payment of principal of and (subject to
Section 307) interest (including Additional Interest) on such Debenture and for
all other purposes whatsoever, whether or not such Debenture be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
The Depositary or its nominee, as the registered owner of each Global
Security, shall be considered the Holder of the Debentures represented by a
Global Security for all purposes under this Indenture and the Debentures, and
owners of beneficial interests in a Global Security shall not be entitled to
have any of the individual Debentures represented by a Global Security
registered in their names, shall not receive nor be entitled to receive physical
delivery of any such Debentures in definitive form and shall not be considered
the Holders thereof under this Indenture. Accordingly, any such owner's
beneficial interest in a Global Security shall be shown only on, and the
transfer of such interest shall be effected only through, records maintained by
the Depositary or its nominee. The Debenture Registrar shall be entitled to deal
with the Depositary for all purposes of this Indenture relating to the Global
Securities as the sole Holder of Global Securities and shall have no obligations
to the owners thereof. Neither the Property Trustee nor the Debenture Registrar
shall have any liability in respect of any transfers effected by the Depositary.
The rights of owners of beneficial interests in a Global Security shall be
exercised only through the Depositary and shall be limited to those established
by law and agreements between such owners and the Depositary. Neither the
Depositary nor its nominee will consent or vote with respect to the Debentures.
Under its usual procedures, the Depositary or its nominee would mail an Omnibus
Proxy to the Company as soon as possible after the relevant record date. The
Omnibus Proxy assigns the consenting or voting rights of the Depositary or its
nominee to those Holders, identified in a listing attached to such Omnibus
Proxy, to whose accounts the Debentures are credited on such record date.
SECTION 309. CANCELLATION.
All Debentures surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and any such Debentures and Debentures surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Debentures previously authenticated and delivered hereunder which the Company
may
33
have acquired in any manner whatsoever, and all Debentures so delivered shall be
promptly canceled by the Trustee. No Debentures shall be authenticated in lieu
of or in exchange for any Debentures canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Debentures held by
the Trustee shall be disposed of as directed by a Company Order.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Debentures payable for any full quarter shall be computed
on the basis of actual days elapsed in such period and a 360-day year.
SECTION 311. RIGHT OF SET-OFF.
Notwithstanding anything to the contrary in the Indenture, the Company
shall have the right to set-off any payment it is otherwise required to make
hereunder with respect to any Debenture and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Parent Guarantee or under Section 508 hereof.
SECTION 312. AGREED TAX TREATMENT.
Each Debenture issued hereunder shall provide that the Company and, by its
acceptance of a Debenture or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, such Debenture agree that for
United States federal, state and local tax purposes it is intended that such
Debenture constitute indebtedness.
SECTION 313. CUSIP NUMBERS.
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall, upon Company Request, cease to be of further effect
and the Company will be deemed to have satisfied and discharged this Indenture
(except as to any surviving rights of registration of transfer or exchange of
Debentures herein expressly provided for and as otherwise provided in this
Section 401) and the Trustee, on written demand of and at the expense of the
Company, shall execute instruments supplied by the Company acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Debentures theretofore authenticated and
delivered (other than (i) Debentures which have been
destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii)
Debentures for whose payment money has theretofore
been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for
cancellation; or
34
(B) all such Debentures not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year of the
date of deposit, and the Company, in the
case of (i) or (ii) above, has deposited
or caused to be deposited with the
Trustee cash or cash equivalents or
Government Obligations, as trust funds
in trust for the purpose, an amount
sufficient to pay and discharge the
entire indebtedness on such Debentures
not theretofore delivered to the Trustee
for cancellation, for principal and
interest (including Additional Interest)
to the date of such deposit (in the case
of Debentures which have become due and
payable) or to the Stated Maturity or
Redemption Date, as the case may be and
the Company has delivered to The Trust
an Opinion of Counsel as set forth in
Section 403(d)(i);
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authentication Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 or money or Government
Obligations deposited with the Trustee pursuant to Section 403, or received by
the Trustee in respect of Government Obligations deposited with the Trustee,
pursuant to Section 403, shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Debentures and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest (including
any Additional Interest) for the payment of which such money or obligations have
been deposited with or received by the Trustee.
SECTION 403. LEGAL AND COVENANT DEFEASANCE.
(a) On and after the date the Company shall have fulfilled the conditions
of Section 403(c), it shall be deemed to have paid and discharged the
entire Indebtedness represented by any Debentures, or any portion of
the principal amount thereof, and satisfied its obligations under this
Indenture with respect thereto (hereinafter, "Legal Defeasance"). Such
Debentures shall thereafter be deemed to be "Outstanding" solely for
the purposes of Section 402 hereof and the following provisions of
this Indenture shall survive with respect thereto: (i) the rights of
Holders of such Debentures to receive, solely from the trust fund
described in Section 403(c), payments in respect of the principal of,
premium, if any, and interest on such Debentures when such payments
are due, or on the redemption date, as the case may be, and (ii) the
obligations of the Company and the Trustee with respect to such
Debentures under Sections 304, 305, 306, 1204, 1002, 1003, 607 and 614
and this Article Four. The Company may elect to effect a Legal
Defeasance under this Section 403(a) notwithstanding the prior
election to effect a Covenant Defeasance under Section 403(b) with
respect to Debentures or portions thereof.
35
(b) The Company shall be released from its obligations under the covenants
contained in Sections 1004, 1005 and, 1006 and Article Eight with
respect to any Debentures or any portion of the principal amount
thereof, on and after the date the conditions in Section 403(c) are
satisfied (hereinafter, "Covenant Defeasance"). Such Debentures or
portions thereof shall thereafter be deemed not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. In the event of a Covenant Defeasance, the Company
may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of
Default under Section 501(3) with respect to such Debentures or
portions thereof, but, except as specified above, the remainder of
this Indenture and such Debentures or portions thereof shall continue
to be in full force and effect.
(c) The following shall be the conditions to any defeasance under this
Section 403:
(i) there shall have been irrevocably deposited with the Trustee, in
trust: (1) money in an amount which shall be sufficient or (2)
Government Obligations, which shall not contain provisions
permitting the redemption or other prepayment thereof at the
option of the issuer thereof, the principal of and the interest
on which when due, without any regard to reinvestment thereof
will provide moneys which, together with the money, if any,
deposited with or held by the Trustee, shall be sufficient, or
(3) a combination of (1) or (2) which shall be sufficient, to pay
when due the principal and interest, if any, due and to become
due on such Debentures or portions thereof; provided, however,
that (a) in the case of the provision for payment or redemption
of less than all the Debentures, such Debentures or portions
thereof shall have been selected by the Debenture Registrar as
provided herein and, in the case of a redemption, the notice
requisite to the validity of such redemption shall have been
given or irrevocable authority shall have been given by the
Company to the Trustee to give such notice, under arrangements
satisfactory to the Trustee and (b) such money or the proceeds of
such Government Obligations shall either (i) have been on deposit
with the Trustee for a period of at least 90 days, or (ii) the
Trustee shall have received an Opinion of Counsel reasonably
satisfactory in form to the Trustee to the effect that payments
to Holders with such moneys as proceeds are not recoverable as a
preference under any applicable United States federal or state
law relating to bankruptcy, insolvency, receivership, winding-
up, liquidation, reorganization or relief of debtors;
(ii) if such deposit shall have been made prior to the Maturity of
such Debentures, the Company shall have delivered to the Trustee
a Company Order stating that the money and Government Obligations
deposited with the Trustee in accordance with this Section shall
be held by the Trustee, in trust, as provided in Section 402;
(iii) if Government Obligations shall have been deposited with the
Trustee, the Company shall have delivered to the Trustee an
opinion of an independent public accountant of nationally
recognized standing, selected by the Company, to the effect that
the requirements set forth in clause (i) above have been
satisfied;
(iv) the Company shall have delivered to the Trustee an Opinion of
Counsel in the form described in Section 403(d); and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein relating to either the Legal
Defeasance under Section 403(a) or the Covenant Defeasance under
Section 403(b), as the case may be, have been complied with.
36
(d)
(i) In the case of Legal Defeasance under Section 403(a), the Opinion
of Counsel referred to in Section 403(c) shall be in a form
reasonably satisfactory to the Trustee and shall be (a)
accompanied by a ruling of the Internal Revenue Service issued to
the Company, or (b) based on a change in law or regulation
occurring after the date hereof, to the effect that the Holders
will not realize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance but will realize
income, gain or loss on the Debentures, including payments of
interest thereon, in the same amounts and in the same manner and
at the same time as would have been the case if such Legal
Defeasance had not occurred; and
(ii) In the case of Covenant Defeasance under Section 403(b), the
Opinion of Counsel referred to in Section 403(c) shall be in a
form reasonably satisfactory to the Trustee and to the effect
that the Holders will not realize income, gain or loss for
federal income tax purposes as a result of such Covenant
Defeasance but will realize income, gain or loss on the
Debentures, including payments of interest thereon, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred.
(e) In the event that the Company effects a Legal Defeasance, upon receipt
by the Trustee of money or Government Obligations, or both, in
accordance with Section 403(c), together with the documents required
by such paragraph, the Trustee shall, upon receipt of a Company
Request, acknowledge in writing that the Debentures or portions
thereof with respect to which such deposit was made are deemed to have
been paid for all purposes of this Indenture and that the entire
indebtedness of the Company in respect thereof is deemed to have been
satisfied and discharged.
(f) If payment of less than all of the Debentures is to be provided for in
the manner and with the effect provided in this Section, the Debenture
Registrar shall select such Debentures, or portions of principal
amount thereof in the manner specified by Section 1203.
(g) In the event that Debentures which shall be deemed to have been paid
as a result of a Legal Defeasance (or with respect to which a Covenant
Defeasance has been effected) do not mature and are not to be redeemed
within the 60-day period commencing with the date of the deposit with
the Trustee of moneys or Government Obligations, the Company shall, as
promptly as practicable, give a notice, in the same manner as a notice
of redemption with respect to such Debentures, to the Holders of such
Debentures to the effect that such deposit has been made and the
effect thereof.
(h) The Company shall pay, and shall indemnify the Trustee and each Holder
of Debentures which are deemed to have been paid as provided in this
Section against any tax, fee or other charge imposed on or assessed
against the Government Obligations deposited with the Trustee or the
principal or interest received by the Trustee in respect of such
Government Obligations.
(i) Anything herein to the contrary notwithstanding, if, at any time
after a Legal Defeasance or a Covenant Defeasance is effected
pursuant to this Section (without regard to the provisions of
this paragraph (i)), the Trustee shall be required to return the
money or Government Obligations, or combination thereof,
deposited with it to the Company or its representative under any
applicable federal or state bankruptcy, insolvency or other
similar law, the indebtedness of the Company in respect of such
Debentures shall thereupon be deemed retroactively not to have
been satisfied and discharged, as aforesaid, and to remain
Outstanding, or, as the case may be, the obligations under the
above-mentioned covenants in respect of such Debentures shall
thereupon be deemed retroactively not to have been released.
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ARTICLE FIVE
Remedies
SECTION 501. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the following
events that has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be occasioned by the provisions of Article
Eleven or 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):
(1) failure for 30 days to pay any interest on the Debentures
(including Additional Interest, if any) when due (subject to
the deferral of any due date in the case of an Extension
Period); or
(2) failure to pay any principal on the Debentures when due
whether at Stated Maturity, upon redemption, by declaration or
otherwise; provided, however, that a valid extension of
maturity of such Debentures in accordance with the terms of
this Indenture shall not constitute a default in the payment
of principal; or
(3) failure to observe or perform in any material respect any
other covenant herein for 90 days after written notice
requiring the Company to remedy the same to the Company from
the Trustee or to the Company and the Trustee from the holders
of at least 25% in aggregate principal amount of the
Outstanding Debentures; or
(4) entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar
law or (B) a decree or order adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company under any applicable federal
or state law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of
the Company or of substantially all of the property of the
Company, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days; or
(5) (A) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or
insolvent, or (B) the consent by the Company or to the entry
of a decree or order for relief in respect of itself in an
involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company, or (C) the filing by
the Company of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state
law, or (D) the consent by the Company to the filing of such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of
all or substantially all of the property of the Company, or
(E) the making by the Company of an assignment for the benefit
of creditors, (F) the taking of corporate action by the
Company in furtherance of any such action; or
(6) The Trust shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence,
except in connection with (A) the distribution of Debentures
to holders of Trust Securities in liquidation of their
interests in the Trust; (B) the redemption of all of the
outstanding Trust Securities of the Trust; or (c) certain
mergers, consolidations or amalgamations, each as permitted by
the Trust Agreement.
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SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in Section
501(4), 501(5) or 501(6)) occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures shall have the right to declare the principal (or
specific portion thereof) of and the interest on all the Debentures, and any
other amount payable under the Indenture, to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given by Holders)
provided, that if upon an Event of Default, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the Outstanding Debentures fail
to declare such amounts to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of Capital Securities then Outstanding
shall have such right, by a notice in writing to the Company and the Trustee;
and upon any such declaration such principal amount (or specified portion
thereof) of and the accrued interest (including any Additional Interest) on all
the Debentures shall become immediately due and payable. If an Event of Default
specified in Section 501(4), 501(5) or 501(6) occurs, the principal amount of
all the Debentures shall automatically, and without any declaration or other
action on the part of the Trustee or any Holder, become immediately due and
payable. Payment of principal and interest (including any Additional Interest)
on such Debentures shall remain subordinated to the extent provided in Article
Eleven.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in aggregate principal amount of the Outstanding Debentures, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay:
(A) all overdue installments of interest (including any Additional
Interest) on all Debentures,
(B) the principal of any Debentures which have become due
otherwise than by such declaration of acceleration and
interest and Additional Interest, if any, thereon at the rate
borne by the Debentures, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
(2) all Events of Default, other than the non-payment of the principal of
Debentures which has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
If the Holders of a majority in principal amount of the outstanding
Debentures fail to annul such declaration and waive such default, the holders of
a majority in aggregate Liquidation Amount of the Capital Securities may rescind
and annul such declaration and its consequences, subject to the foregoing
conditions.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Debentures
all or part of which are represented by a Global Security, a record date shall
be established for determining Holders of Outstanding Securities entitled to
join in such notice, which record date shall be at the close of business on the
day the 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 which 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
39
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
which has been canceled pursuant to the proviso to the preceding sentence, in
which event a new record date shall be established pursuant to the provisions of
this Section 502.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Debenture when such
interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of any Debenture
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Debentures, the whole amount then due and payable
on such Debentures for principal and interest (including any Additional
Interest), and, in addition thereto, all amounts owing the Trustee under Section
607. Payment of principal and interest (including any Additional Interest) on
such Debentures shall remain subordinated to the extent provided in Article
Eleven notwithstanding that such amount shall become immediately due and payable
as herein provided.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Debentures and collect the
monies adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Debentures, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debentures or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Debentures
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal (and premium, if any) or
interest (including Additional Interest)) shall be entitled and empowered, by
intervention in such proceeding or otherwise, (i) to file and prove a claim for
the whole amount of principal and interest (including any Additional Interest)
owing and unpaid in respect to the Debentures and to file such other papers or
documents as may be necessary or advisable and to take any and all actions as
are authorized under the Trust Indenture Act in order to have the claims of the
Holders and any predecessor to the Trustee under Section 607 allowed in any such
judicial proceedings, and (ii) in particular, the Trustee shall be authorized to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section 506; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee for distribution in accordance with
Section 506 and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it and any predecessor Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the
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Debentures or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBENTURES.
All rights of action and claims under this Indenture or the Debentures may
be prosecuted and enforced by the Trustee without the possession of any of the
Debentures or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, subject to
Article Eleven and after provision for payment of all the amounts owing the
Trustee and any predecessor Trustee under Section 607, its agents and counsel,
be for the ratable benefit of the Holders of the Debentures in respect of which
such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Subject to Article Eleven, any money or property collected or to be applied
by the Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money or property on account of principal or interest (including any
Additional Interest), upon presentation of the Debentures and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for principal and
interest (including any Additional Interest) on the Debentures in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and
payable on such Debentures for principal and interest (including any Additional
Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Debenture shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver, assignee, trustee, liquidator, sequestrator or other
similar official or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Debentures shall have made written request
to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders
of a majority in aggregate principal amount of the Outstanding
Debentures;
41
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all the Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Debenture shall have the right, which is absolute and unconditional, to receive
payment of the principal of and (subject to Section 307) interest (including any
Additional Interest) on such Debenture on the respective Stated Maturities
expressed in such Debenture (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder. Any holder of
the Capital Securities shall have the right, upon the occurrence of an Event of
Default described in Section 501(1) or 501(2) hereof, to institute a suit
directly against the Company for enforcement of payment to such holder of
principal of and (subject to Section 307) interest (including any Additional
Interest) on the Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Securities held by such holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee, or any Holder or any holder of Capital Securities has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee, such Holder or such holder of Capital
Securities, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee, the Holders and the holders of Capital
Securities shall be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Trustee, such
Holder and such holder of Capital Securities shall continue as though no such
proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debentures in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debentures in the last paragraph of Section
306, no delay or omission of the Trustee or of any Holder of any Debenture or
any holder of any Capital Security to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Holders and the
right and remedy given to the holders of Capital Securities by Section 508 may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders or the holders of Capital Securities, as the case may
be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in aggregate principal amount of the Outstanding
Debentures shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
42
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) subject to the provisions of Section 601, the Trustee shall
have the right to decline to follow such direction if the
Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so
directed would be unjustly prejudicial to the Holders not
joining in any such direction or would involve the Trustee in
personal liability.
Upon receipt by the Trustee of any written notice directing the time, method or
place of conducting any such proceeding or exercising any such trust or power,
with respect to Debentures all or part of which are represented by a Global
Security, a record date shall be established for determining Holders of
Outstanding Debentures entitled to join in such notice, which record date shall
be at the close of business on the day the 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 the Holders of a
majority in principal amount of the Outstanding Debentures shall have joined in
such notice prior to the day which is 90 days after such record date, such
notice 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
notice identical to a notice which has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section.
SECTION 513. WAIVER OF PAST DEFAULTS.
Subject to Sections 902 and 1010 hereof, the Holders of not less than a
majority in aggregate principal amount of the Outstanding Debentures affected
thereby may waive any past default hereunder and its consequences, except a
default: (1) in the payment of the principal or interest (including any
Additional Interest) on any Debenture (unless such default has been cured and a
sum sufficient to pay all matured installments of interest (including any
Additional Interest) and principal due otherwise than by acceleration has been
deposited with the Trustee); or (2) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended without the consent of
the Holder of each Outstanding Debenture affected. If the Holders of such
Debentures fail to waive such default, the holders of not less than a majority
in aggregate Liquidation Amount of the Capital Securities shall have such right.
Any such waiver shall be deemed to be on behalf of the Holders of all the
Debentures or, in the case of a waiver by holders of Capital Securities, by all
holders of Capital Securities.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Debenture by
his acceptance thereof shall be deemed to have agreed that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs against any such party litigant including
reasonable attorneys' fees, in the manner and to the extent provided in the
Trust Indenture Act having due regard to the merits and good faith of the claims
or defenses made by such party litigants; but the provisions of this Section
shall not apply to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
aggregate principal amount of the Outstanding Debentures, or to any suit
instituted by any Holder for the enforcement of the payment of the principal or
interest (including any Additional Interest) on any Debenture on or after the
respective Stated Maturities expressed in such Debenture.
43
SECTION 515. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by this
Indenture and the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in
this Indenture, and no implied covenants or
obligations shall be read into this Indenture against
the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of
any such certificates or opinions which by any
provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or
not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct
except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good
faith in accordance with the direction of Holders
pursuant to Section 512 relating
44
to the time, method and place of conducting any
proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the
Trustee under this Indenture with respect to the
Debentures.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if there
shall be reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee charged with the administration of this Indenture of the occurrence of
any default hereunder, the Trustee shall transmit by mail to all Holders of
Debentures, as their names and addresses appear in the Debentures Register,
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that except in the case of a
default in the payment of the principal of interest (including any Additional
Interest) on any Debenture, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the interests of the
Holders of Debentures; provided, further, that in the case of any default of the
character specified in Section 501(3), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default. For purposes of this Section,
the Trustee shall be deemed to have actual knowledge of a default if it has
received written notice of such default in the manner contemplated by Section
105.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, security, note,
other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder,
the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely
upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the
written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this
Indenture, unless such
45
Holders shall have offered to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, indenture, Debenture, note,
other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by
agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES.
The recitals contained herein and in the Debentures, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of the Debentures or the proceeds thereof.
SECTION 605. MAY HOLD DEBENTURES.
The Trustee, any Authenticating Agent, any Paying Agent, any Debenture
Registrar, or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Debentures and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Debenture
Registrar, or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
SECTION 607. COMPENSATION; REIMBURSEMENT; AND INDEMNITY.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to
time agree in writing for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of
an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad
faith; and
46
(3) to indemnify the Trustee for, and to hold it harmless against,
any and all loss, damage, claim, liability, action, suit, cost
or expense (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) of any
kind and nature whatsoever incurred without negligence or bad
faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties
hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties
hereunder.
In addition, the Company hereby agrees to pay all amounts owing under
Section 8.06 of the Trust Agreement and to enter into and perform an Expense
Agreement substantially in the Form of Exhibit B to this Indenture. To secure
the Company's payment obligations under this Section 607, the Trustee shall have
a lien against all money or property held or collected by the Trustee, which
shall be entitled to the priority set forth in Section 506 hereof.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 501(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, Section 310(b) the Trust Indenture Act and this Indenture.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act (as if such Act were
applicable to this Indenture) to act as such and has a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority. If such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section and to the extent
permitted by the Trust Indenture Act (as if such Act were applicable to this
Indenture), the combined capital and surplus of such Person shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article. Neither
the Company nor any Person directly or indirectly controlling, controlled by or
under common control with the Company shall serve as Trustee for the Debentures
issued hereunder.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor
Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company and the Holders. If an instrument of
acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in aggregate principal amount of the Outstanding
Debentures, delivered to the Trustee and to the Company.
(d) If at any time:
47
(1) the Trustee shall fail to comply with Section 608
after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a
Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or
any public officer shall take charge or control of
the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Debenture for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee
for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If the Company fails to
appoint a successor Trustee within thirty (30) days of such
resignation, removal, or incapability, or the occurrence of
such vacancy, the retiring Trustee may, subject to Section
514, petition any court of competent jurisdiction for the
appointment of a successor Trustee. If, within one year after
such resignation, removal or incapability, or the occurrence
of such vacancy, a successor Trustee shall be appointed by Act
of the Holders of a majority in aggregate principal amount of
the Outstanding Debentures delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee
appointed by the Company or any court. If no successor Trustee
shall have been so appointed by the Company or the Holders and
accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Debenture for at
least six months may, subject to Section 514, on behalf of
himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor
Trustee to all Holders in the manner provided in Section 106.
Each notice shall include the name of the successor Trustee
and the address of its Corporate Trust Office.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; provided that, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in this Section.
In case of the appointment hereunder of a successor Trustee, the Company,
the retiring Trustee and each successor Trustee shall execute and deliver an
indenture supplemental hereto wherein each successor Trustee shall accept such
appointment and which shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee; and
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upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, and duties
of the retiring Trustee; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Debentures shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Debentures so authenticated, and in case any
Debentures shall not have been authenticated, any successor to the Trustee may
authenticate such Debentures either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Debentures or in this Indenture that the certificate of the Trustee will have.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents which shall be
authorized to act on behalf of the Trustee to authenticate Debentures issued
upon original issue and upon exchange, registration or transfer or partial
redemption thereof, and Debentures so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Debentures by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State, Territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at lease annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which an Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or such Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Debentures.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment is made pursuant to this Section, the Debentures may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
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This is one of the Debentures referred to in the within mentioned
Indenture.
Dated: ______________________
Wilmington Trust Company,
By: ________________________________
As Authentication Agent
By: ________________________________
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee:
(a) quarterly, not later than April 15, July 15, October 15 and
January 15 in each year, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the
Holders of the Debentures as of such March 31, June 30,
September 30 and December 31, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
In each case to the extent such information is in the possession or control
of the Company and has not otherwise been received by the Trustee in its
capacity as Debenture Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee as
provided in Section 701 and the names and addresses of Holders
received by the Trustee in its capacity as Debenture
Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so
furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and duties of the
Trustee, shall be as provided by the Trust Indenture Act (as
if such Act were applicable to this Indenture).
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall
be held accountable by reason of any disclosure of information
as to names and addresses of Holders made
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pursuant to the provisions of the Trust Indenture Act (as if
such Act were applicable to this Indenture).
SECTION 703. REPORTS BY TRUSTEE.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act (as if such Act
were applicable to this Indenture) at the times and in the
manner provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of
not more than 12 months shall be transmitted no later than
July 15 in each calendar year, commencing with the first July
15th after the first issuance of Debentures under this
Indenture.
SECTION 704. REPORTS BY COMPANY.
The Company is required to deliver annually to the Trustee a certificate
stating whether or not to the best knowledge of the signers thereof the Company
is in default in the performance, observance or fulfillment of or compliance
with any of the material terms, provisions, covenants and conditions of this
Indenture (without regard to any period of grace or requirement of notice
provided under this Indenture) and, if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
The Company shall also file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act. The Company also shall
comply with the other provisions of Trust Indenture Act Section 314(a) (as if
such Act were applicable to this Indenture).
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not without the consent of the holders of the Outstanding
Debentures consolidate with or merge into any other Person or convey, transfer
or lease its properties and assets substantially as an entirety to any Person,
and the Company shall not permit any Person to consolidate with or merge into
the Company or convey, transfer, lease or otherwise dispose of its properties
and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the Person
formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation,
partnership, trust or other entity, shall be organized and
validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest (including any Additional
Interest) on all the Debentures and the performance or
observance of every covenant of this Indenture and the
Debentures on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time
or both, would become an Event of Default, shall have happened
and be continuing;
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(3) such consolidation or merger or conveyance, transfer or lease
of properties or assets of the Company is permitted under the
Trust Agreement and the Parent Guarantee and does not give
rise to any breach or violation of, the Trust Agreement or the
Parent Guarantee; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease complies
with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied
with; and the Trustee, subject to Section 601, may rely upon
such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this
Section.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company with
or into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein; and in the event of any such
conveyance, transfer or lease, the Company shall be discharged from all
obligations and covenants under this Indenture and the Debentures and may be
dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Debentures issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Debentures which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication pursuant to such provisions and
any Debentures which such successor Person thereafter shall cause to be signed
and delivered to the Trustee on its behalf for the purpose pursuant to such
provisions. All the Debentures so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures has been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Debentures thereafter to be
issued as may be appropriate.
ARTICLE NINE
Supplemental Indentures
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of
the Company herein and in the Debentures; or
(2) to convey, transfer, assign, mortgage or pledge any property
to or with the Trustee or to surrender any right or power
herein conferred upon the Company; or
(3) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred
upon the Company; or
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(4) to add any additional Events of Default; or
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect
to matters or questions arising under this Indenture, provided
that such action pursuant to this clause (5) shall not
materially adversely affect the interests of the Holders of
the Debentures or, so long as any of the Capital Securities
shall remain outstanding, the holders of the Capital
Securities; or
(6) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Debentures, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner provisions adversely affecting the rights of the Holders
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Debenture affected
thereby,
(1) except to the extent permitted and subject to the conditions
set forth in Section 301 with respect to the extension of
interest payment period of the Debentures, extend the Stated
Maturity of, the principal of, or any installment of interest
(including any Additional Interest) on, any Debenture, or
reduce the principal amount thereof or the rate of interest
thereon, or change the place of payment where, or the coin or
currency in which, any Debenture or interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or modify the provisions of this
Indenture with respect to the subordination of the Debentures
in a manner adverse to the Holders, or
(2) reduce the percentage in aggregate principal amount of the
Outstanding Debentures, the consent of the Holders of which is
required for any such supplemental indenture, or the consent
of whose Holders is required for any waiver (of compliance
with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1007, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of
each Outstanding Debenture affected thereby;
provided, that, so long as any of the Capital Securities remain outstanding, no
such modification shall be made that requires the consent of the holders of the
Debentures, and no termination of this Indenture shall occur, and no waiver of
any Event of Default shall be effective, without the prior consent of the
holders of at least a majority of the aggregate Liquidation Amount of the
Outstanding Capital Securities and that if the consent of the Holder of each
Debenture is required, such modification shall not be effective until each
Holder of Outstanding Debentures has consented thereto.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that
54
the execution of such supplemental indenture is authorized or permitted by this
Indenture, and that all conditions precedent have been complied with. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debentures theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Debentures.
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. PAYMENT OF PRINCIPAL AND INTEREST.
The Company covenants and agrees for the benefit of the Debentures that it
will duly and punctually pay the principal of (and premium, if any) and interest
(including any Additional Interest) on the Debentures in accordance with the
terms of the Debentures and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in Wilmington, Delaware, an office or agency
where Debentures may be presented or surrendered for payment, where Debentures
may be surrendered for registration of transfer or exchange, and where notices
and demands to or upon the Company in respect of the Debentures and this
Indenture may be served. The Company initially appoints the Trustee, acting
through its Corporate Trust Office, as its agent for said purposes. The Company
will give prompt written notice to the Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in the United States) where the Debentures may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in the United States for such purposes. The Company will give prompt
written notice to the Trustee of any such designation and any change in the
location of any such office or agency.
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SECTION 1003. MONEY FOR DEBENTURE PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal (and premium, if any) of or interest
(including any Additional Interest), on any of the Debentures, segregate and
hold in trust for the benefit of the Persons entitled thereto a sum sufficient
to pay the principal or interest (including any Additional Interest) so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to 10:00 a.m. New York City time on each due date of the principal of or
interest (including any Additional Interest) on any Debentures, deposit with a
Paying Agent a sum sufficient to pay the principal or interest (including any
Additional Interest) so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal (and premium, if any) or
interest (including any Additional Interest), and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its failure so to
act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will (i) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent, (ii) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest (including any Additional
Interest) on Debentures in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided, (iii) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures) in the making of any payment of principal
(and premium, if any) or interest (including any Additional Interest), and (iv)
at any time during the continuance of any such default by the Company (or any
other obligor upon the Debentures) in the making of any payment of principal
(and premium, if any) or interest, upon written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by the Company or any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or interest (including
any Additional Interest) on any Debenture and remaining unclaimed for two years
after such principal or interest has become due and payable shall (unless
otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be repaid to the Company or (if then held by the
Company) shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be discharged from such trust
and the Holder of such Debenture shall thereafter look, as a general unsecured
creditor, only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
SECTION 1004. STATEMENT BY OFFICERS AS TO COMPLIANCE.
The Company will deliver to the Trustee, within 120 days after the end of
each calendar year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding calendar year, stating whether or not to the
best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and, if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
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SECTION 1005. ADDITIONAL SUMS.
If and so long as (i) the Trust is the Holder of all of the Outstanding
Debentures, (ii) a Tax Event shall have occurred and be continuing and (iii) the
Company shall not have redeemed the Debentures pursuant to Section 1201 or
terminated the Trust pursuant to Section 9.02(b) of the Trust Agreement, the
Company shall pay to the Trust (and its permitted successors or assigns under
the Trust Agreement) for so long as the Trust (or its permitted successor or
assignee) is the registered holder of any Debentures, such additional amounts as
may be necessary in order that the amount of distributions (including any
Additional Amounts (as defined in the Trust Agreement)) then due and payable by
the Trust on the Capital Securities and Common Securities that at any time
remain outstanding in accordance with the terms thereof shall not be reduced as
a result of any Additional Taxes arising from such Tax Event (the "Additional
Sums"). Whenever in this Indenture or the Debentures there is a reference in any
context to the payment of principal of or interest on the Debentures, such
mention shall be deemed to include mention of the payments of the Additional
Sums provided for in this paragraph to the extent that, in such context,
Additional Sums are, were or would be payable in respect thereof pursuant to the
provisions of this paragraph and express mention of the payment of Additional
Sums (if applicable) in any provisions hereof shall not be construed as
excluding Additional Sums in those provisions hereof where such express mention
is not made, provided, however, that the deferral of interest payments pursuant
to Section 301 or the Debentures shall not defer the payment of any Additional
Sums that may be due and payable.
SECTION 1006. ADDITIONAL COVENANTS.
The Company covenants and agrees with each Holder of Debentures that if at
any time (a) there shall have occurred and be continuing any event that, with
the giving of notice or the lapse of time or both, would constitute an Event of
Default hereunder and in respect of which the Company shall not have taken
reasonable steps to cure, (b) the Company shall be in default with respect to
its payment of any obligations under the Parent Guarantee or (c) the Company
shall have given notice of its selection of an Extension Period as provided
herein and shall not have rescinded such notice and such Extension Period, or
any extension thereof, shall be continuing, then it shall not, and it will not
permit any Subsidiary of the Company to, (1) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of the Company's outstanding capital stock, (2) make any
payment of principal, interest or on or repay, repurchase or redeem any debt
securities that rank pari passu with or junior to the Debentures or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary of the Company that by their terms rank pari passu
or junior in interest to the Debentures, (3) sell, lease, license, transfer or
otherwise dispose of any asset or interest therein or (4) with respect to the
Company, make any capital contributions or similar advances to its Subsidiaries;
provided, however, that the foregoing restrictions shall not prevent (A) any
such transaction (other than transactions described in clause (4) above) in the
ordinary course of business or in immaterial amounts, (B) a reorganization of
Subsidiaries of the Company, so long as the Company's percentage ownership
interest in such Subsidiaries does not decrease, (C) dividends or distributions
in Common Stock of the Company, (D) payments under the Parent Guarantee or any
similar guarantee by the Company with respect any other securities of any of its
Subsidiaries; provided that the proceeds of the issuance of such securities were
used to purchase debt securities of the Company that rank pari passu with or
junior to this Debenture and (E) purchases of Common Stock of the Company
related to the issuance of Common Stock of the Company under any of the
Company's benefit plans for its directors, officers or employees.
The Company also covenants, for so long as Capital Debentures remain
outstanding, (i) to maintain directly or indirectly 100% ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Company hereunder may succeed to the Company's ownership of such Common
Securities, (ii) not to voluntarily dissolve, wind-up or liquidate the Trust,
except (a) in connection with a distribution of the Debentures to the holders of
Capital Securities in liquidation of the Trust or (b) in connection with certain
mergers, consolidations or amalgamations permitted by the Trust Agreement, and
(iii) to use its reasonable efforts, consistent with the terms and provisions of
the Trust Agreement, to cause the Trust to remain a statutory business trust and
to be classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes, except in connection
with a distribution of the Debentures to the holders of Capital Securities in
liquidation of the Trust.
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SECTION 1007. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 301 for
Debentures, the Company may, with respect to the Debentures, omit in any
particular instance to comply with any term, provision or condition set forth in
any covenant provided pursuant to Section 901(2) for the benefit of the Holders
if before or after the time for such compliance the Holders of at least a
majority in aggregate principal amount of the Outstanding Debentures shall, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
term, provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
Subordination of Debentures
SECTION 1101. DEBENTURES SUBORDINATE TO SENIOR DEBT.
The Company covenants and agrees, and each Holder of a Debenture, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article (subject to Article Four), the
payment of the principal of (and premium, if any) and interest (including any
Additional Interest) on each and all of the Debentures are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
amounts then due and payable in respect of all Senior Debt.
The Trustee and the Holders shall take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Debt or consent to the filing of a financing statement with respect hereto) as
may, in the opinion of counsel designated by the holders of a majority in
principal amount of the Senior Debt at the time outstanding, be necessary or
appropriate to assure the effectiveness of the subordination effected by these
provisions.
The provisions of Sections 1102, 1103 and 1104 hereof shall not impair any
rights, interests, remedies or powers of any secured creditor of the Company in
respect of any security interest the creation of which is not prohibited by the
provisions of this Indenture.
The securing of any obligations of the Company, otherwise ranking on a
parity with the Debentures or ranking junior to the Debentures, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Debentures or ranking junior to the Debentures.
SECTION 1102. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the case of the pendency of (a) any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company, its creditors or its
property, (b) any proceeding for the liquidation, dissolution or other winding
up of the Company, voluntary or involuntary, whether or not involving insolvency
or bankruptcy proceedings, (c) any assignment by the Company for the benefit of
creditors or (d) any other marshaling of the assets of the Company, (each such
event, if any, herein sometimes referred to as a "Proceeding"), then the holders
of Senior Debt shall be entitled to receive payment in full of principal of (and
premium, if any) and interest, if any, on such Senior Debt (including any
interest thereon accruing after the commencement of any such Proceeding), or
provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Debentures are entitled to receive or retain any payment or
distribution of any kind or character, whether in cash, property or securities
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any other Debt of the Company (including the
Debentures) subordinated to the payment of the Debentures, such payment or
distribution being hereinafter referred to as a "Junior Subordinated Payment"),
on account of principal of or interest (including any Additional Interest) on
the Debentures or on account of the purchase or other acquisition of Debentures
by the Company or any Subsidiary and to that end the holders of Senior Debt
shall be entitled to receive, for application to the payment
58
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, including any Junior Subordinated Payment, which may be
payable or deliverable in respect of the Debentures in any such Proceeding.
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Debt, the Holders of the Debentures, together with the
holders of any obligations of the Company ranking on a parity with the
Debentures, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
and interest on the Debentures and such other obligations before any payment or
other distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock or any obligations of the Company ranking junior to
the Debentures and such other obligations.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Debenture shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company for application to the payment
of all Senior Debt remaining unpaid, to the extent necessary to pay all Senior
Debt in full, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or distribution
of any kind or character, whether in cash, property or securities" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment which securities are subordinated in right of
payment to all then outstanding Senior Debt at least to the same extent as the
Debentures are so subordinated as provided in this Article. The consolidation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the sale of all or
substantially all of its properties and assets as an entirety to another Person
upon the terms and conditions set forth in Article Eight shall not be deemed a
Proceeding for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by sale such properties and assets as an entirety, as the case may be, shall, as
a part of such consolidation, merger, or sale comply with the conditions set
forth in Article Eight.
SECTION 1103. PRIOR PAYMENT TO SENIOR DEBT UPON ACCELERATION OF DEBENTURES.
In the event that any Debentures are declared due and payable before their
Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Debentures so become due and payable shall to the
extent required under the terms of such Senior Debt be entitled to receive
payment in full of all amounts due on or in respect of such Senior Debt, or
provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Debentures are entitled to receive any payment or distribution of
any kind or character, whether in cash, properties or securities (including any
Junior Subordinated Payment) by the Company on account of the principal of or
interest (including any Additional Interest) on the Debentures or on account of
the purchase or other acquisition of Debentures by the Company or any
Subsidiary.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Debenture prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 1102 would be applicable.
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SECTION 1104. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT.
In the event and during the continuation of any default in the payment of
principal of or interest on any Senior Debt, when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by declaration
of acceleration or otherwise, then, upon written notice of such default to the
Company by the holders of Senior Debt or any trustee therefor, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist, then no payment or distribution of any kind or character, whether in
cash, properties or securities (including any Junior Subordinated Payment) shall
be made by the Company on account of principal of or interest (including any
Additional Interest), if any, on the Debentures or on account of the purchase or
other acquisition of Debentures by the Company or any Subsidiary.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Debenture prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 1102 would be applicable.
SECTION 1105. PAYMENT PERMITTED IF NO DEFAULT.
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Debentures shall prevent (a) the Company, at any time except during the
pendency of any Proceeding referred to in Section 1102 or under the conditions
described in Sections 1103 and 1104, from making payments at any time of
principal of or interest on the Debentures, or (b) the application by the
Trustee of any money or Government Obligations deposited with it hereunder to
the payment of or on account of the principal of or interest (including any
Additional Interest) on the Debentures or the retention of such payment by the
Holders, if, at the time of such application by the Trustee, it did not have
knowledge that such payment would have been prohibited by the provisions of this
Article.
SECTION 1106. SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT.
Subject to the payment in full of all amounts due or to become due on all
Senior Debt, or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of the Senior Debt, the
Holders of the Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the provisions
of this Article (equally and ratably with the holders of all indebtedness of the
Company which by its express terms is subordinated to Senior Debt of the Company
to substantially the same extent as the Debentures are subordinated to the
Senior Debt and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt) to the rights of
the holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of and
interest on the Debentures shall be paid in full. For purposes of such
subrogation or assignment, no payments or distributions to the holders of the
Senior Debt of any cash, property or securities to which the Holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Debt by Holders of the Debentures or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt, and the
Holders of the Debentures, be deemed to be a payment or distribution by the
Company to or on account of the Senior Debt.
SECTION 1107. PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Debentures on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Debentures is intended to or
shall (a) impair, as between the Company and the Holders of the Debentures, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Debentures the principal of and interest (including any
Additional Interest) on the Debentures as and
60
when the same shall become due and payable in accordance with their terms; or
(b) affect the relative rights against the Company of the Holders of the
Debentures and creditors of the Company other than their rights in relation to
the holders of Senior Debt; or (c) prevent the Trustee or the Holder of any
Debenture (or to the extent expressly provided herein, the holder of any Capital
Security) from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture including, without limitation, filing and
voting claims in any Proceeding, subject to the rights, if any, under this
Article of the holders of Senior Debt to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1108. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Debenture by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination provided in this
Article and appoints the Trustee his or her attorney-in-fact for any and all
such purpose.
SECTION 1109. NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Debt may, at any time and from to time, without
the consent of or notice to the Trustee or the Holders of the Debentures,
without incurring responsibility to such Holders of the Debentures and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of such Holders of the Debentures to the holders of Senior
Debt, do any one or more of the following: (i) change the manner, place or terms
of payment or extend the time of payment of, or renew or alter, Senior Debt, or
otherwise amend or supplement in any manner Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (iii) release any Person liable in
any manner for the collection of Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 1110. NOTICE TO TRUSTEE.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company that would prohibit the making of any payment to or by the
Trustee in respect of the Debentures. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment to or by the Trustee in respect of the Debentures, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor (whether or not the facts contained in such notice are true); provided,
however, that if the Trustee shall not have received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, without
limitation, the payment of the principal of or interest (including any
Additional Interest) on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing such
Person to be a holder of Senior Debt (or a trustee or attorney-in-fact therefor)
to establish that such notice has been given by a holder of Senior Debt (or a
trustee or attorney-in-fact therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Debt to participate in any payment or distribution
pursuant to this Article, the Trustee may request
61
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Debt held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 1111. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article Six, and the
Holders of the Debentures shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Debentures, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
SECTION 1112. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be
liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Debentures or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
SECTION 1113. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article in respect of any Senior Debt which may at any time
held by it, to the same extent as any other holder of Senior Debt, and nothing
in this Indenture shall deprive the Trustee of any of its rights as such holder.
SECTION 1114. ARTICLE APPLICABLE TO PAYING AGENTS.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee.
SECTION 1115. CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT.
For the purposes of this Article only, (a) the issuance and delivery of
junior securities upon exchange of Debentures shall not be deemed to constitute
a payment or distribution on account of the principal of or interest (including
any Additional Interest) on Debentures or on account of the purchase or other
acquisition of Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities) upon exchange of a
Debenture shall be deemed to constitute payment on account of the principal of
such security. For the purposes of this Section, the term "junior securities"
means (i) shares of any stock of any class of the Company and (ii) securities of
the Company which are subordinated in right of payment to all Senior Debt which
may be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article.
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ARTICLE TWELVE
Redemption of Debentures
SECTION 1201. APPLICABILITY OF THIS ARTICLE.
Redemption of Debentures as permitted or required by any form of Debenture
issued pursuant to this Indenture shall be made in accordance with such form of
Debenture and this Article; provided, however, that if any provision of any such
form of Debenture shall conflict with any provision of this Article, the
provision of such form of Debenture shall govern. Except as otherwise set forth
in the form of Debenture, each Debenture shall be subject to partial redemption
only in the amount of $1,000, or integral multiples thereof; provided, however,
that in no event shall the Trustee redeem a number of Debentures from a
Debenture Holder if as a result of such redemption, such Debenture Holder would
own Debentures having an aggregate amount equal to or greater than $1,000 but
less than $100,000.
SECTION 1202. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Debentures shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company, the Company shall, at least 45 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Debentures to be redeemed provided that, for so long as the Debentures are
held by the Trust, such notice shall be given not less than 90 nor more than 180
days prior to such Redemption Date (unless a shorter notice shall be
satisfactory to the Property Trustee). In the case of any redemption of
Debentures prior to the expiration of any restriction on such redemption
provided in the terms of such Debentures, the Company shall furnish the Trustee
with an Officers' Certificate and an Opinion of Counsel evidencing compliance
with such restriction.
SECTION 1203. SELECTION BY TRUSTEE OF DEBENTURES TO BE REDEEMED.
If less than all the Debentures are to be redeemed, the particular
Debentures to be redeemed shall be selected not more than 75 days prior to the
Redemption Date by the Trustee, from the Outstanding Debentures not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of a portion
of the principal amount of any Debenture, provided that the unredeemed portion
of the principal amount of any Debenture shall be in an authorized denomination
(which shall not be less than the minimum authorized denomination) for such
security.
The Trustee shall promptly notify the Company in writing of the Debentures
selected for partial redemption and the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Debentures shall relate, in the
case of any Debenture redeemed or to be redeemed only in part, to the portion of
the principal amount of such Debenture which has been or is to be redeemed.
SECTION 1204. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Debentures to be redeemed, at the address of such Holder as it
appears in the Debenture Register.
All notices of redemption shall identify the Debentures to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date;
63
(2) the Redemption Price;
(3) if less than all Outstanding Debentures are to be redeemed,
the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Debentures
to be redeemed;
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Debenture or portion thereof,
and that interest thereon, if any, shall cease to accrue on
and after said date; and
(5) the place or places where such Debentures are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Debentures to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Debenture designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture.
SECTION 1205. DEPOSIT OF REDEMPTION PRICE.
Prior to 10:00 a.m. New York City time on the Redemption Date specified in
the notice of redemption, the Company shall deposit with the Trustee or with a
Paying Agent (or, if the Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of money sufficient to
pay the Redemption Price, with any interest, of all the Debentures (or portions
thereof) so called for redemption.
SECTION 1206. DEBENTURES PAYABLE ON REDEMPTION DATE.
If any notice of redemption has been given as provided in Section 1204, the
Debentures or portion of Debentures with respect to which such notice has been
given shall become due and payable on the Redemption Date at the place or places
stated in such notice and at the Redemption Price therein specified, together
with accrued interest to but excluding the Redemption Date, and from and after
such date (unless the Company shall default in the payment of the Redemption
Price and accrued interest) such Debentures shall cease to bear interest. On
presentation and surrender of such Debentures at a place of payment in said
notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the Redemption Price, together with accrued
interest to but excluding the Redemption Date; provided, however, that
installments of interest (including any Additional Interest) whose corresponding
Interest Payment Date is on or prior to the Redemption Date will be payable to
the Holders of such Debentures, or one or more Predecessor Debentures,
registered as such at the close of business on the relevant record dates
according to their terms and the provisions of Section 307.
Upon presentation of any Debenture redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof, at
the expense of the Company, a new Debenture or Debentures, of authorized
denominations, in aggregate principal amount equal to the unredeemed portion of
the Debenture so presented and having the same date of issuance, Stated Maturity
and terms. If a Global Security is so surrendered, such new Debenture will also
be a new Global Security.
If any Debenture called for redemption shall not be so paid upon surrender
thereof for redemption, the principal on such Debenture shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Debenture.
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SECTION 1207. OPTIONAL REDEMPTION; CONDITIONS TO OPTIONAL REDEMPTION.
The Company, at its option, may redeem the Debentures (i) on or after May
14, 2009, in whole at any time or in part from time to time, subject to the
prior approval of the Federal Reserve if then required under the applicable
capital guidelines or policies of the Federal Reserve, or (ii) upon the
occurrence and during the continuation of a Special Event, at any time within
ninety (90) days following the occurrence of a Special Event in respect of the
Trust, in whole (but not in part), in each case at a redemption price equal to
100% of the principal amount thereof plus any accrued or unpaid interest,
including Additional Interest, if any, to but excluding the Redemption Date (the
"Redemption Price").
ARTICLE THIRTEEN
Miscellaneous
SECTION 1301. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
[signatures appear on the following page]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
NORTH COUNTRY FINANCIAL CORPORATION
By: /s/ Ronald G. Ford
[Seal] Name: Ronald G. Ford
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY
By: /s/ Emmett R. Harmon
[Seal]
Name: Emmett R. Harmon
Title: Vice President
66
STATE OF MICHIGAN ss.
ss.
COUNTY OF SCHOOLCRAFT ss.
On the ____ day of _____, 1999, before me personally came Ronald G. Ford,
to me known, who, being by me duly sworn, did depose and say that he is the
President and Chief Executive Officer of North Country Financial Corporation,
one of the corporations described in and which executed the foregoing
instrument; and that he signed his name thereto by authority of the Board of
Directors of such corporation.
By: ____________________________________
STATE OF DELAWARE ss.
ss.
COUNTY OF New Castle ss.
On the 14th day of May, 1999, before me personally came Emmett R. Harmon,
to me known, who, being by me duly sworn, did depose and say that he is the Vice
President of Wilmington Trust Company, a Delaware banking corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by authority of the Board of Directors of such corporation.
By: /s/ Denise Ann Hoppie
::ODMA\PCDOCS\GRR\267789\3
67
EXHIBIT 10.8
GUARANTEE AGREEMENT
Between
North Country Financial Corporation
(as Guarantor)
and
Wilmington Trust Company
(as Guarantee Trustee)
dated as of
May 14, 1999
CROSS-REFERENCE TABLE*
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
310(a)...................................................................4.01(a)
310(b).............................................................4.01(c), 2.08
310(c)..............................................................Inapplicable
311(a)...................................................................2.02(b)
311(b) ..................................................................2.02(b)
311(c)..............................................................Inapplicable
312(a) ..................................................................2.02(a)
312(b)...................................................................2.02(b)
313 ........................................................................2.03
314(a)......................................................................2.04
314(b)..............................................................Inapplicable
314(c)......................................................................2.05
314(d)..............................................................Inapplicable
314(e)..........................................................1.01, 2.05, 3.02
314(f)................................................................2.01, 3.02
315(a)...................................................................3.01(d)
315(b)......................................................................2.07
315(c)......................................................................3.01
315(d)...................................................................3.01(d)
316(a).............................................................5.04(a), 2.06
316(b)......................................................................5.03
316(c)......................................................................2.02
317(a)..............................................................Inapplicable
317(b)..............................................................Inapplicable
318(a)...................................................................2.01(b)
318(b)......................................................................2.01
318(c)...................................................................2.01(a)
_______________
*This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS........................................................2
SECTION 1.01. DEFINITIONS............................................2
ARTICLE II - TRUST INDENTURE ACT...............................................5
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.......................5
SECTION 2.02. LISTS OF HOLDERS.......................................6
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE.......................6
SECTION 2.04. PERIODIC REPORTS TO GUARANTEE TRUSTEE..................6
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT. .....................................6
SECTION 2.06. EVENTS OF DEFAULT; WAIVER..............................6
SECTION 2.07. EVENT OF DEFAULT; NOTICE...............................7
SECTION 2.08. CONFLICTING INTERESTS..................................7
ARTICLE III - POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE...................7
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.............7
SECTION 3.02. CERTAIN RIGHTS OF GUARANTEE TRUSTEE....................9
SECTION 3.03. INDEMNITY.............................................10
ARTICLE IV - GUARANTEE TRUSTEE................................................11
SECTION 4.01. GUARANTEE TRUSTEE; ELIGIBILITY........................11
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF
GUARANTEE TRUSTEE..............................11
ARTICLE V - GUARANTEE.........................................................12
SECTION 5.01. GUARANTEE.............................................12
SECTION 5.02. WAIVER OF NOTICE AND DEMAND...........................12
SECTION 5.03. OBLIGATIONS NOT AFFECTED..............................12
SECTION 5.04. RIGHTS OF HOLDERS.....................................13
SECTION 5.05. GUARANTEE OF PAYMENT..................................14
SECTION 5.06. SUBROGATION...........................................14
SECTION 5.07. INDEPENDENT OBLIGATIONS...............................14
ARTICLE VI - COVENANTS AND SUBORDINATION......................................14
SECTION 6.01. COVENANTS.............................................14
SECTION 6.02. SUBORDINATION.........................................15
SECTION 6.03. PARI PASSU GUARANTEES.................................15
ARTICLE VII - TERMINATION.....................................................15
SECTION 7.01. TERMINATION...........................................15
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ARTICLE VIII - MISCELLANEOUS..................................................16
SECTION 8.01. SUCCESSORS AND ASSIGNS................................16
SECTION 8.02. AMENDMENTS............................................16
SECTION 8.03. NOTICES...............................................16
SECTION 8.04. BENEFIT...............................................18
SECTION 8.05. INTERPRETATION........................................18
SECTION 8.06. GOVERNING LAW.........................................18
SECTION 8.07. COUNTERPARTS..........................................18
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of May 14, 1999, is executed and
delivered by North Country Financial Corporation, a Michigan corporation (the
"Guarantor"), to Wilmington Trust Company, a Delaware banking corporation, as
trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Capital Securities (as defined herein) of North
Country Capital Trust, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of May 14, 1999 among the Trustees of the Issuer named
therein, the Guarantor, as Depositor (as defined in the Trust Agreement), and
the Holders, from time to time, of undivided beneficial interests in the assets
of the Trust, the Issuer is issuing $12,450,000 aggregate liquidation amount of
its Floating Rate Capital Securities (liquidation amount $1,000 per capital
security) (the "Capital Securities" and, together with the Common Securities,
the "Trust Securities") and $386,000 aggregate liquidation amount of its Common
Securities, each representing ownership interests in the assets of the Issuer
and having the terms set forth in the Trust Agreement;
WHEREAS, the Trust Securities will be issued by the Issuer and the proceeds
thereof will be used to purchase the Debentures (as defined in the Trust
Agreement) of the Guarantor which will be deposited with Wilmington Trust
Company, as Property Trustee under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Capital Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by each Holder of Capital
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Capital Securities.
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. As used in this Guarantee Agreement, the terms
set forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement as
in effect on the date hereof unless otherwise indicated.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the
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purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Capital Securities" has the meaning specified in the recitals to this
Guarantee Agreement.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer (liquidation amount $1,000 per
Common Security).
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable for, directly or indirectly,
as obligor or otherwise.
"Event of Default" means (i) a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"Guarantee" or "Guarantee Agreement" means this Guarantee Agreement, dated
as of May 14, 1999, between North Country Financial Corporation and the
Guarantee Trustee.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Capital Securities, to the extent not paid or
made by or on behalf of the Issuer: (i) any accumulated and unpaid Distributions
(as defined in the Trust Agreement) required to be paid on the Capital
Securities, to the extent the Issuer shall have funds available therefor at such
time; (ii) the Redemption Price (as defined in the Trust Agreement) with respect
to the Capital Securities called for redemption by the Issuer to the extent the
Issuer shall have funds available therefor at such time; and (iii) upon a
voluntary or involuntary dissolution, winding-up or liquidation of the Issuer
(other than in connection with the distribution of Debentures to the Holders or
a redemption of all of the Capital Securities), the lesser of (a) the
Liquidation Distribution (as defined in the Trust Agreement) to the extent the
Issuer shall have funds available therefor at such time, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer after satisfaction of liabilities to creditors of the
Issuer as required by applicable law.
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"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Capital Securities; provided, however, that in determining
whether the holders of the requisite percentage of Capital Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee or any Affiliate of the Guarantor or the
Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of May 14,
1999, between the Guarantor and Wilmington Trust Company, as trustee.
"Majority in Liquidation Amount of the Capital Securities" means, except as
provided by the Trust Indenture Act, Capital Securities representing more than
50% of the liquidation amount of all then outstanding Capital Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman of the Board, Vice Chairman of the Board, Chief
Investment Officer, Chief Executive Officer, the President or a Vice President,
and by the Chief Financial Officer, Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of such Person, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement that each officer signing the Officers' 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 Officers'
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.
"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.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, any financial services
officer or any other officer of the Corporate Trust Administration
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Department of the Guarantee 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.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Guarantee or to other Debt which is pari
passu with, or subordinated to, the Guarantee; provided, however, that Senior
Debt shall not be deemed to include: (a) any Debt of the Guarantor which, when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, was without recourse to the Guarantor; (b) any
Debt of the Guarantor to any of its Subsidiaries (as defined in the Indenture);
(c) Debt to any employee of the Guarantor; (d) trade accounts payable of the
Guarantor; (e) accrued liabilities arising in the ordinary course of business of
the Guarantor; (f) the Debentures; and (g) the Guarantee.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act, which are required to be part of this Guarantee
Agreement, and this Guarantee shall be governed by such provisions as
if such Act applied to this Guarantee.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act through operation of
Section 318(c) thereof, such imposed duties shall control. If any
provision of this Guarantee Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or
excluded, such provision shall be deemed to apply to this Guarantee
Agreement as so modified or excluded, as the case may be.
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SECTION 2.02. LISTS OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (i) quarterly, not later than April 15, July 15, October 15
and January 15 in each year, a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the
Holders of the Capital Securities ("List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (ii) at such
other times as the Guarantee Trustee may request in writing, within 30
days after the receipt by the Guarantor of any such request, a List of
Holders as of a date not more than 15 days prior to the time such list
is furnished, in each case to the extent such information is in the
possession or control of the Guarantor and has not otherwise been
received by the Guarantee Trustee in its capacity as such. The
Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under Sections
311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Not later than July 15 of
each year, commencing July 15, 1999, the Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.04. PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act as if such Act were
applicable to this Guarantee.
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
liquidation amount of the Capital Securities may, by vote, on behalf of the
Holders of all of 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 Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
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SECTION 2.07. EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to
the Holders of the Capital Securities, notices of all Events of
Default known to the Guarantee Trustee, unless such Event of Default
has been cured before the giving of such notice, provided that, except
in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Capital Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received
written notice, or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained actual
knowledge, of such Event of Default.
SECTION 2.08. CONFLICTING INTERESTS. The Trust Agreement and the Indenture
shall be deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders of the Capital Securities, and the
Guarantee Trustee shall not transfer this Guarantee Agreement to any
Person except a Holder of Capital Securities exercising his or her
rights pursuant to Section 5.04(iv) of the Amended and Restated Trust
Agreement dated May 14, 1999, or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to
act as Successor Guarantee Trustee. The right, title and interest of
the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee
of its appointment hereunder, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders of the Capital Securities.
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(c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be
read into this Guarantee Agreement against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.06), the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent individual would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this
Guarantee Agreement (including pursuant to Section 2.01),
and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming
to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any
provision hereof or of the Trust Indenture Act are
specifically required to be furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Guarantee Agreement or the Trust
Indenture Act, as applicable;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Capital Securities relating
to the time, method and place of conducting any
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proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.02. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) The Guarantee Trustee may rely and shall be fully protected in
acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document reasonably
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be
promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may (at the expense of the Guarantor)
consult with legal counsel, and the written advice or opinion of
such legal counsel with respect to legal matters shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion. Such legal counsel
may be legal counsel to the Guarantor or any of its Affiliates
and may be one of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of
competent jurisdiction.
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(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in
the position of the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested
by the Guarantee Trustee; provided that, nothing contained in
this Section 3.02(a)(v) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Guarantee Trustee shall
not be responsible for any misconduct or negligence on the part
of any such agent or attorney appointed with due care by it
hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders of the Capital Securities, (B) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee 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 Guarantee 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 Guarantee Trustee shall be
construed to be a duty to act in accordance with such power and
authority.
SECTION 3.03. INDEMNITY. The Guarantor agrees to indemnify the Guarantee
Trustee for, and to hold it harmless against, any loss, damage, claims,
liability, penalty or expense incurred
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without negligence or bad faith on the part of the Guarantee Trustee, arising
out of or in connection with the acceptance or administration of this Guarantee
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Guarantee Trustee will not claim or exact any
lien or charge on any Guarantee Payments as a result of any amount due to it
under this Guarantee Agreement.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that would be eligible pursuant to the Trust
Indenture Act (as if such Act were applicable hereto) to act as
such and has a combined capital and surplus of at least Fifty
Million U.S. Dollars ($50,000,000), and shall be a corporation
meeting the requirements of Section 310(a) of the Trust Indenture
Act. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of a supervising
or examining authority, then, for the purposes of this Section
4.01(a)(ii) and to the extent permitted by the Trust Indenture
Act, 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 Guarantee Trustee shall cease to be eligible to so
act under Section 4.01(a), the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture
Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF GUARANTEE TRUSTEE.
(a) Subject to Section 4.02(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
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(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and
delivered to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor
Guarantee Trustee has been appointed and has accepted such appointment
by an instrument in writing executed by such Successor Guarantee
Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 30 days
after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of the Issuer), as and when due,
regardless of any defense (other than the defense of payment), right of set-off
or counterclaim which the Issuer may have or assert. The Guarantor's obligation
to make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
SECTION 5.02. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.03. OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or
11
condition relating to the Capital Securities or Common Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any
interest payment period on the Debentures as so provided in the
Indenture), Redemption Price, Liquidation Distribution or any other
sums payable under the terms of the Capital Securities or Common
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital
Securities or Common Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital
Securities or any action on the part of the Issuer granting indulgence
or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Capital Securities
or the Common Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor (other than
payment of the underlying obligation), it being the intent of this
Section 5.03 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.04. RIGHTS OF HOLDERS. The Guarantor expressly acknowledges that
: (a) this Guarantee Agreement will be deposited with the Guarantee Trustee to
be held for the benefit of the Holders; (b) the Guarantee Trustee has the right
to enforce this Guarantee Agreement on behalf of the Holders; (c) the Holders of
a Majority in Liquidation Amount of the Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (d) any Holder of Capital Securities may, to the extent
permissible under applicable law, institute a legal proceeding
12
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Guarantee
Trustee, the Issuer or any other Person.
SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement creates a
guarantee of payment and not a guarantee of collection. This Guarantee Agreement
will not be discharged except by payment of the Guaranty Payments in full
(without duplication of amounts theretofore paid by the Issuer or upon
distribution of Debentures to Holders as provided in the Trust Agreement).
SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.01; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Issuer with
respect to the Capital Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.01. COVENANTS. So long as any Capital Securities remain
outstanding, in the event (a) the Guarantor shall be in default with respect to
its Guarantee Payments hereunder, (b) there shall have occurred and be
continuing any Event of Default under the Indenture or (c) the Guarantor shall
have given notice of its selection of an Extension Period (as defined in the
Indenture) and such period, or any extension thereof, is continuing, the
Guarantor shall not, and shall cause its Subsidiaries (as defined in the
Indenture) not to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
the Guarantor's outstanding capital stock, (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities that rank pari passu with or junior to the Debentures or make any
guarantee payments with respect to the foregoing, (iii) sell, lease, license,
transfer or otherwise dispose of any asset or interest therein or (iv) with
respect to the Guarantor, make any capital contributions or similar advances to
any Subsidiaries; provided, however, that nothing shall prevent (A) any such
transaction in the ordinary course of business or in immaterial amounts (other
than transactions described in clause (iv) above), (B) reorganizations of
Subsidiaries, so long as the Guarantor's percentage ownership interest in such
Subsidiaries does not decrease, (C) dividends or
13
distributions in common stock of the Guarantor, (D) payments hereunder, or under
any similar guarantee by the Guarantor with respect to any other securities of
any of its Subsidiaries; provided that the proceeds of the issuance of such
securities were used to purchase debt securities of the Guarantor that rank pari
passu with or junior to the Debentures and (E) purchases of common stock of the
Guarantor related to the rights under any of the Guarantor's benefit plans for
its directors, officers or employees.
SECTION 6.02. SUBORDINATION. The obligations of the Guarantor under this
Guarantee Agreement will constitute unsecured obligations of the Guarantor and
will rank subordinate and junior in right of payment to all Senior Debt of the
Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article Eleven of the Indenture
will apply, mutatis mutandis, to the obligations of the Guarantor hereunder. The
obligations of the Guarantor hereunder do not constitute Senior Debt (as defined
in the Indenture) of the Guarantor.
SECTION 6.03. PARI PASSU GUARANTEES. The obligations of the Guarantor under
this Guarantee Agreement shall rank pari passu with the obligations of the
Guarantor under (a) any similar guarantee agreements issued by the Guarantor on
behalf of the holders of preferred or capital securities issued by a business
trust or similar entity whose common securities are owned, directly or
indirectly, by the Guarantor, (b) the Indenture and the Debentures issued
thereunder; (c) the Expense Agreement (as defined in the Trust Agreement) and
any similar expense agreements entered into by the Guarantor in connection with
the offering of capital securities issued by a business trust or similar entity
whose common securities are owned, directly or indirectly, by the Guarantor, and
(d) any other security, guarantee or other agreement or obligation that is
expressly stated to rank pari passu with the obligations of the Guarantor under
this Guarantee Agreement or with any obligation that ranks pari passu with the
obligations of the Guarantor under this Guarantee Agreement.
ARTICLE VII
TERMINATION
SECTION 7.01. TERMINATION. This Guarantee Agreement shall terminate and be
of no further force and effect upon (a) full payment of the Redemption Price of
all Capital Securities, (b) subject to Federal Reserve approval, if then
required under the applicable capital guidelines or policies of the Federal
Reserve, the distribution of Debentures to Holders of Capital Securities in
exchange for all of the Capital Securities or (c) full payment of the amounts
payable in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Capital Securities or this
Guarantee Agreement. Guarantor will indemnify each Holder and hold it harmless
from and against any loss it may suffer in such circumstance.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Capital Securities then outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor or a
conveyance, transfer or lease of the Guarantor's properties that, in either
case, is permitted under Article Eight of the Indenture and pursuant to which
the successor or assignee agrees in writing to perform the Guarantor's
obligations hereunder, the Guarantor shall not assign its obligations hereunder,
and any purported assignment other than in accordance with this provision shall
be void.
SECTION 8.02. AMENDMENTS. Except with respect to any changes that do not
adversely affect the rights of Holders in any material respect (in which case no
consent of Holders will be required), this Guarantee Agreement may be amended
only with the prior approval of the Holders of not less than a Majority in
liquidation amount of the outstanding Capital Securities. The provisions of
Article VI of the Trust Agreement concerning meetings of Holders shall apply to
the giving of such approval.
SECTION 8.03. NOTICES. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantor, to the address or telecopy number
set forth below or such other address as the Guarantor may
give notice of to the Guarantee Trustee:
North Country Financial Corporation
130 South Cedar Street
Manistique, Michigan 49854
Facsimile No: (906) 341-8702
Attention: Ronald G. Ford
with a copy to:
Varnum, Riddering, Schmidt & Howlett LLP
Bridgewater Place
P.O. Box 352
Grand Rapids, Michigan 49501-0352
Facsimile No: (616) 336-7000
Attention: Donald L. Johnson
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(b) if given to the Issuer, at the address or telecopy number set
forth below or such other address as the Issuer may give
notice of to the Guarantee Trustee:
North Country Capital Trust
130 South Cedar Street
Manistique, Michigan 49854
Facsimile No: (906) 341-8702
Attention: Administrative Trustee
with copies to:
Varnum, Riddering, Schmidt & Howlett LLP
Bridgewater Place
P.O. Box 352
Grand Rapids, Michigan 49501-0352
Facsimile No: (616) 336-7000
Attention: Donald L. Johnson
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Facsimile No: (302) 651-8882
Attention: Corporate Trust Administration
(c) if given to the Guarantee Trustee, at the Guarantee Trustee's
address or telecopy number set forth below:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Facsimile No: (302) 651-8882
Attention: Corporate Trust Administration
(d) if given to any Holder of Capital Securities, at the address
set forth on the books and records of the Issuer.
All notices hereunder 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.
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SECTION 8.04. BENEFIT. This Guarantee Agreement is solely for the benefit
of the Holders, and is not separately transferable from the Capital Securities,
subject to Section 3.01(a).
SECTION 8.05. INTERPRETATION. In this Guarantee Agreement, unless the
context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings
assigned to them in Section 1.01 unless otherwise indicated;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee
Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise
requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
MICHIGAN.
SECTION 8.07. COUNTERPARTS. This instrument may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
17
This GUARANTEE AGREEMENT is executed as of the day and year first above
written.
NORTH COUNTRY FINANCIAL WILMINGTON TRUST COMPANY,
CORPORATION as Guarantee Trustee
By: /s/ Ronald G. Ford By: /s/ Emmett R. Harmon
Name: Ronald G. Ford Name: Emmett R. Harmon
Title: President and Chief Executive
Officer Title: Vice President
::ODMA\PCDOCS\GRR\267786\4
18
EXHIBIT 10.9
AGREEMENT AS TO EXPENSES AND LIABILITIES
THIS AGREEMENT is dated as of May 14, 1999, between North Country Financial
Corporation, a Michigan corporation ("NCFC"), and North Country Capital Trust, a
Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive Debentures from, NCFC and to issue and sell
Floating Rate Capital Securities (the "Capital Securities") with such powers,
preferences and special rights and restrictions as are set forth in the Amended
and Restated Trust Agreement of the Trust dated as of May 14, 1999, as the same
may be amended from time to time (the "Trust Agreement");
WHEREAS, NCFC will directly or indirectly own all of the Common Securities
of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Capital Securities, which purchase NCFC hereby agrees shall benefit NCFC and
which purchase NCFC acknowledges will be made in reliance upon the execution and
delivery of this Agreement, NCFC, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
ARTICLE I
Section 1. 1. Guarantee by NCFC.
Subject to the terms and conditions hereof, NCFC, including in its capacity
as holder of the Common Securities, hereby irrevocably and unconditionally
guarantees to each person or entity to whom the Trust is now or hereafter
becomes indebted or liable (the "Beneficiaries") the full payment when and as
due, of any and all Obligations (as hereinafter defined) to such Beneficiaries.
As used herein, "Obligations" means any costs, expenses or liabilities of the
Trust other than obligations of the Trust to pay to holders of any Capital
Securities or other similar interests in the Trust the amounts due such holders
pursuant to the terms of the Capital Securities or such other similar interests,
as the case may be. This Agreement is intended to be for the benefit of, and to
be enforceable by, all such Beneficiaries, whether or not such Beneficiaries
have received notice hereof.
Section 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Capital Securities (whether upon redemption,
liquidation, exchange or otherwise) and (b) the date on which there are no
Beneficiaries remaining; provided, however, that this Agreement shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
holder of Capital Securities or any Beneficiary must restore payment of any sums
paid under the Capital Securities, under any obligation, under the Guarantee
Agreement dated the date hereof by NCFC and Wilmington Trust Company as
guarantee trustee or under this Agreement for any reason whatsoever. This
Agreement is continuing, irrevocable, unconditional and absolute.
Section 1.3. Waiver of Notice.
NCFC hereby waives notice of acceptance of this Agreement and of any
obligation to which it applies or may apply, and NCFC hereby waives presentment,
demand for payment, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
Section 1.4. No Impairment.
The obligations, covenants, agreements and duties of NCFC under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the obligations or for the performance of any other obligation under,
arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, NCFC with respect to the happening of any of the foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against NCFC, and NCFC
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before proceeding against NCFC.
ARTICLE II
Section 2. 1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of NCFC and shall
inure to the benefit of the Beneficiaries.
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Capital Securities of any
series are
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outstanding, this Agreement shall not be modified or amended in any manner
adverse to such Beneficiary or to the holders of the Capital Securities.
Section 2.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the same by facsimile
transmission (confirmed by mail), telex, or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or upon
receipt of an answer back, if sent by telex):
North Country Capital Trust
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Facsimile No.: 302-651-1576
Attention: Corporate Trust Department
North Country Financial Corporation
130 South Cedar Street
Manistique, MI 49854
Facsimile No.: 906-341-8702
Attention: Chief Executive Officer
Section 2.4. This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Michigan (without regard
to conflict of laws principles).
[Signatures are on the following page]
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THIS AGREEMENT is executed as of the day and year first above written.
NORTH COUNTRY FINANCIAL CORPORATION
By: /s/ Ronald G. Ford
Ronald G. Ford
Chief Executive Officer
NORTH COUNTRY CAPITAL TRUST
By: /s/ Ronald G. Ford
Name: Ronald G. Ford
Title: Administrative Trustee
::ODMA\PCDOCS\GRR\292878\1
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