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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM T-1
Statement of Eligibility Under
The Trust Indenture Act of 1939 of a
Corporation Designated to Act as Trustee
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)
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THE HERRING NATIONAL BANK
(Exact name of Trustee as specified in its charter)
75-0330569
I.R.S. Employer Identification No.
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1001 S. Harrison St.
Amarillo, Texas 79101
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(Address of principal executive offices) (Zip Code)
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Catana Gray
The Herring National Bank
1001 S. Harrison St.
Amarillo, Texas 79101
(806) 378-1810
(Name, address and telephone number of agent for service)
American Church Mortgage Company
(Issuer with respect to the Securities)
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Minnesota 41-1793975
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(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
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10237 Yellow Circle Drive
Minnetonka, Minnesota 55343
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(Address of Principal Executive Offices) (Zip Code)
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$23,000,000 - Series B Secured Investor Certificates
(Title of the Indenture Securities)
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FORM T-1
Item 1. GENERAL INFORMATION. Furnish the following information as to the
Trustee.
a) Name and address of each examining or supervising authority to which
it is subject. Comptroller of the Currency Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
b) Whether it is authorized to exercise corporate trust powers. Yes
Item 2. AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
Trustee, describe each such affiliation. None
Items3-15. Items 3-15 are not applicable because to the best of the Trustee's
knowledge, the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
Item 16. LIST OF EXHIBITS: List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. A copy of the Articles of Association of the Trustee.
2. A copy of the certificate of authority of the Trustee to commence
business.(1)
3. A copy of the certificate of authority of the Trustee to exercise corporate
trust powers. (1)
4. A copy of the existing bylaws of the Trustee.
5. A copy of each Indenture referred to in Item 4. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Trust
Indenture Act of 1939, attached as Exhibit 6.
7. Report of Condition of the Trustee as of December 31, 2003, published
pursuant to law or the requirements of its supervising or examining
authority, attached as Exhibit 7.
(1) Original and copies are currently unavailable.
Page 2
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, THE HERRING NATIONAL BANK, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Amarillo, State of Texas on the 28 day of September, 2004.
THE HERRING NATIONAL BANK
By: /s/ Catana Gray
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Catana Gray
Vice President and Manager
Page 3
Exhibit 1
THE HERRING NATIONAL BANK OF VERNON
Charter No. 7010
ARTICLES OF ASSOCIATION
For the purpose of organizing an Association to carry on the business of banking
under the laws of the United States, the undersigned do enter into the following
Articles of Association:
FIRST
The title of this Association shall be The Herring National Bank of Vernon.
SECOND
The main office of the Association shall be in Vernon, County of Wilbarger,
State of Texas. The general business of the Association shall be conducted at
its main office and its branches.
THIRD
The Board of Directors of this Association shall consist of such number of its
shareholders, not less than five nor more than twenty-five, the exact number of
Directors within such minimum and maximum limits to be fixed and determined from
time to time by resolution of the shareholders at any annual or special meeting
thereof; provided, however, that if the shareholders should fix the number of
directors at less than twenty-five, the Board of Directors may from time to time
at any regular or special meeting increase the number of Directors to not over
twenty-five; but such authority to increase the number of Directors between
shareholders' meetings shall in all events be limited to an increase of not more
than two directors in any one year.
FOURTH
The regular annual meeting of the shareholders of this Association shall be held
at its main banking house, or other convenient place duly authorized by the
Board of Directors, on such day of each year as is specified therefore in the
Bylaws.
FIFTH
The amount of authorized capital stock of this Association shall be Eight
Hundred Thousand Dollars ($800,000.00) divided into 40,000 shares of common
stock of the par value per share of Twenty Dollars ($20.00) but said capital
stock may be increased or decreased from time to time, in accordance with the
provisions of the laws of the United States.
EXHIBIT 1- Page 1
A. If the capital stock is increased by the sale of additional shares thereof,
each shareholder shall be entitled to subscribe for such additional shares in
proportion to the number of shares of said capital stock owned by him at the
time the increase is authorized by the shareholders, unless another time
subsequent to the date of the shareholders' meeting is specified in a resolution
adopted by the shareholders at the time the increase is authorized. The Board of
Directors shall have the power to prescribe a reasonable period of time within
which the preemptive rights to subscribe to the new shares of capital stock must
be exercised.
B. If the capital stock is increased by a stock dividend, each shareholder shall
be entitled to his proportionate amount of such increase in accordance with the
number of shares of capital stock owned by him at the time the increase is
authorized by the shareholders, unless another time subsequent to the date of
the shareholders' meeting is specified in a resolution adopted by the
shareholders at the time the increase is authorized.
SIXTH
The Board of Directors shall appoint (a) one of its members President of the
Association, (b) one of its members Chairman of the Board, (c) one or more Vice
Presidents, (d) a Secretary who shall keep minutes of the Directors and
Shareholders meetings and be responsible for authenticating the records of the
Association, and (e) such other officers and employees as may be required to
transact the business of the Association. A duly appointed officer may appoint
one or more officers or assistant officers if authorized by the Board of
Directors in accordance with the bylaws.
The Board of Directors shall have the power to:
1. Define the duties of the officers, employees, and agents of the
Association.
2. Delegate the performance of its duties, but not the responsibilities for
its duties, to the officers, employees, and the agents of the Association.
3. Fix a compensation and enter into employment contracts with its officers
and employees upon reasonable terms and conditions consistent with
applicable law.
4. Dismiss officers and employees.
5. Require bonds from officer and employees and to fix the penalty thereof.
6. Ratify written policies authorized by the Association's management or
committees of the Board.
EXHBIT 1-Page 2
7. Regulate the manner in which any increase or decrease of the capital of the
Association shall be made, provided that nothing herein shall restrict the
power of shareholders to increase or decrease the capital of the
Association in accordance with law, and nothing shall raise or lower from
the two thirds of the percentage required for shareholder approval to
increase or reduce capital.
8. Manage and administer the business affairs of the Association.
9. Adopt initial bylaws, not inconsistent with law or the Articles of
Association, from managing the business and regulating the affairs of the
Association.
10. Amend or repeal bylaws, except to the extent that the eleventh article of
these Articles of Association reverses this power for the shareholders.
11. Make contracts.
12. Generally to perform all acts that are legal for a Board of Directors to
perform.
SEVENTH
The Corporate existence of this Association shall continue until terminated in
accordance with the laws of the United States.
EIGHTH
The Board of Directors of this Association, or any three or more shareholders
owning, in the aggregate, not less than 25 percent of the stock of this
Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time,
place, and purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least ten days prior to
the date of such meeting to each shareholder of record at his address as shown
upon the books of this Association.
NINTH
Any person, his heirs, executors, or administrators may be indemnified or
reimbursed by the Association for reasonable expenses actually incurred in
connection with any action, suit, or proceeding, civil or criminal, to which he
or they shall be made a party by reason of his being or having been a director,
officer, or employee of the Association or of any firm, corporation, or
organization which he served in any such capacity at the request of the
Association: Provided, however, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding as to
which he shall finally be adjudged to have been guilty of or liable for
negligence or willful misconduct in the performance of his duties the
Association: And, provided further, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding which
has been made the subject of a compromise settlement except with the approval of
a court of competent jurisdiction, or the holders of record of a majority of the
outstanding shares of the Association, or the Board of Directors, acting by vote
of directors not parties to the same or substantially the same action, suit, or
proceeding, constituting a majority of the whole number of the directors. The
foregoing right of indemnification or
EXHIBIT 1-Page 3
reimbursement shall not be exclusive of other rights to which such person, his
heirs, executors, or administrators, may be entitled as a matter of law.
TENTH
These Articles of Association may be amended at any regular or special meeting
of the shareholders by the affirmative vote of the holders of a majority of the
stock of this Association, unless the vote of the holders of a greater amount of
stock is required by law, and in that case by the vote of the holders of such
greater amount.
ELEVENTH
The Association's bylaws may be amended at any regular or special meeting of the
shareholders by the affirmative vote of the holders of a majority of the stock
of the Association, unless the vote of the holders of a greater amount of stock
is required by law, and in that case by the vote of the holders of such greater
amount. The shareholders, in amending, repealing, or adopting a particular bylaw
may expressly provide that the Board of Directors may not amend or repeal that
bylaw.
IN WITNESS WHEREOF, we have hereunto set our hands this 9th day of February,
1993.
I, Frances Pierce, Certify that: (1) I am the duly constituted Secretary of The
Herring National Bank of Vernon and Secretary of its Board of Directors, and as
such officer am the official custodian of its records; (2) the foregoing
Articles of Association are the Articles of Association of said Bank, and all of
them, as now lawfully in force and effect.
IN TESTIMONY WHEREOF, I have hereunto affixed my official signature and the seal
of the said Bank, in the City of Vernon, on this 9th day of February, 1993.
FRANCES PIERCE
EXHIBIT 1-Page 4
Exhibit 4
THE HERRING NATIONAL BANK
BYLAWS
ARTICLE 1
MEETINGS OF SHAREHOLDERS
Section 1.1. Annual Meetings. An annual meeting of shareholders of the
Corporation shall be held during each calendar year on such date and at such
time as shall be designated from time to time by the Board of Directors and
stated in the notice of meeting. At such meeting, the shareholders shall elect
directors and transact such other business as may properly be brought before the
meeting.
Section 1.2. Judges of Election. Every election of directors shall be managed by
three judges, who shall be appointed from among the shareholders by the Board of
Directors. The Judges of Election shall hold and conduct the election at which
they are appointed to serve; and, after the election, they shall file with the
Cashier a certificate under their hands, certifying the result thereof and the
names of the directors elected. The Judges of Election, at the request of the
Chairman of the meeting, shall act as tellers of any other vote by ballot taken
at such meeting and shall certify the result thereof.
Section 1.3. Proxies. Shareholders may vote at any meeting of the shareholders
by proxies duly authorized in writing, but no officer or employee of this
Association shall act as proxy. Proxies shall be valid only for one meeting, to
be specified therein, and any adjournments of such meeting. Proxies shall be
dated and shall be filed with the records of the meeting.
Section 1.4. Quorum. A majority of the outstanding capital stock, represented in
person or by proxy, shall constitute a quorum at any meeting of shareholders,
unless otherwise provided by law; but less than a quorum may adjourn any
meeting, from time to time, and the meeting may be held, as adjourned, without
further notice. A majority of the votes cast shall decide every questions or
manner submitted to the shareholders at any meeting, unless otherwise provided
by law or by the Articles of Association.
Section. 1.5. Telephone and Similar Meetings. If not prohibited by the Statutes
of the United States, shareholders, directors and committee members may
participate in and hold a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such meeting shall constitute
presence in person at the meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
EXHIBIT 4-Page 1
ARTICLE II
Section 2.1. Board of Directors. The Board of Directors, hereinafter referred to
as the "Board" shall have power to manage and administer the business and
affairs of the Association. Except as expressly limited by law, all corporate
powers of the Association shall be vested in and may be exercised by said Board.
All directors shall be shareholders of not less than fifty shares of common
stock in the parent corporation.
Section. 2.2. Election. In all elections of directors, each shareholder shall
have the right to vote the number of shares owned by him for as many persons as
there are directors to be elected, or to cumulate such shares and give one
candidate as many votes as the number of directors multiplied by the number of
his shares shall equal, or to distribute them on the same principle among as
many candidates as he shall think fit; and in deciding all other questions at
meetings of shareholders each shareholder shall be entitled to one vote on each
share of stock held by said shareholder.
Section 2.3. Organization Meeting. The Cashier, upon receiving the certificate
of the judges, of the result of any election, shall notify the directors-elect
of their election and of the time at which they are required to meet at the Main
Office of the Association, take the oath as required by the Statutes of the
United States, and meet for the purpose of organizing the new Board and electing
and appointing officers of the Association for the succeeding year, appointing
committees and fixing salaries for the ensuing year, appointing committees and
fixing salaries for the ensuing year. Such meeting shall be appointed to be held
on the day of the election or as soon thereafter as practicable, and in any
event, within thirty days thereof. If, at the time fixed for such meeting, there
shall not be a quorum present, the directors present may adjourn the meeting,
from time to time, until a quorum is obtained.
Section 2.4. Number. The Board shall consist of not less than five nor more than
ten shareholders, the exact number within such minimum and maximum limits to be
fixed and determined in accordance with the Articles of Association. Except as
otherwise provided herein, all directors shall hold office for one year until
their successors are elected and have qualified in accordance with the Statutes
of the United States.
Section 2.4(a). Eligibility and Retirement. No person shall be eligible for
election as a director if such person shall have attained the age of 70 at the
date of the annual meeting; provided, however, any person, including but not
limited to persons 70 years of age may be appointed by the bank as an advisory
member to act in advisory capacities without the power of final decisions in
matters concerning the business of the bank. Provided, further, however, any
person including but not limited to, persons 75 years of age may be appointed by
the bank as an honorary member to act in advisory capacities without the power
of final decision in matters concerning the business of the bank. This bylaw may
not be amended or repealed by a vote of the Board of Directors.
Section 2.5. Regular Meetings. The regular meetings of the Board of Directors
shall be held without notice, on the second Tuesday of each month at the Main
Office. When any regular
EXHIBIT 4-Page 2
meeting of the Board falls upon a holiday, the meeting shall be held on the next
business day unless the Board shall designate some other day.
Section 2.6. Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board or the President on one day's notice to each
director, either personally or by mail or by telegram. Special meetings shall be
called by the President or Secretary in like manner and on like notice on the
written request of two directors. Except as otherwise expressly provided by
statute, Articles of Association, or these Bylaws, neither the business to be
transacted at, nor the purpose of, any special meeting need to be specified in a
notice or waiver of notice.
Section 2.7. Quorum: Majority Vote. At meetings of the Board of Directors a
majority of the number of directors fixed by the Articles of Association shall
constitute a quorum for the transaction of business. The act of a majority of
the directors present at the meeting at which a quorum is present shall be the
act of the Board of Directors, except as otherwise specifically provided by
statute. The Articles of Association, or these Bylaws. If a quorum is not
present at a meeting of the Board of Directors, the directors present may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum is present.
Section 2.8. Removal. Any director may be removed either for or without cause at
any special or annual meeting of the shareholders, by the affirmative vote of a
majority in number of shares of the shareholders present, in person or by proxy,
at such meeting and entitled to vote for the election of such director if notice
of intention to act upon such matter shall have been given in the notice calling
such meeting.
Section 2.9. Vacancies. Any vacancy or increase in the number thereof in
accordance with Article II in the Board of Directors, shall be filled through
appointment by a majority of the remaining directors then in office, though less
than a quorum of the Board of Directors and a director so appointed shall hold
his place until the next election and until his successor has qualified in
accordance with the Statutes of the United States, unless removed in accordance
with the bylaws of the Association.
Section 2.10. Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Association in any other
capacity and receiving compensation therefore. Members of the executive
committee or of special or standing committees may, by resolution of the Board
of Directors, be allowed like compensation for attending committee meetings.
Section 2.11. Procedure. The Board of Directors shall keep regular minutes of
its proceedings. The minutes shall be placed in the minute book of the
Association.
Section 2.12. Action Without Meeting. If not prohibited by the Statutes of the
United States, any action required or permitted to be taken at a meeting of the
Board of Directors may be taken without a meeting if a consent in writing,
setting forth the action so taken, is signed by all the
EXHIBIT 4- Page 3
members of the Board of Directors. Such consent shall have the same force and
effect as a unanimous vote at a meeting. The signed consent, or a signed copy,
shall be placed in the minute book. The consent may be in more than one
counterpart so long as each director signs one of the counterparts.
ARTICLE III
Section 3.1. Loans and Discount Committee. There shall be a Loan and Discount
Committee composed of three directors, appointed by the Board annually or more
often. The Discount committee shall have power to discount and purchase bills,
notes, and other evidence of debts, to buy and sell bills of exchange, to
examine and approve loans and discounts, to exercise authority regarding loans
and discounts, and to exercise, when the Board is not in session, all other
powers of the Board that may lawfully be delegated. The Loan and Discount
Committee shall keep minutes of its meetings, and such minutes shall be
submitted at the next regular meeting of the Board of Directors at which a
quorum is present, and any action taken by the Board with respect thereto shall
be entered in minutes of the Board.
Section 3.2. Audit and Compliance Committee. There shall be an Audit and
Compliance Committee composed of not less than six directors appointed by the
Board annually or more often, whose duty it shall be to make an examination
every six months into the affairs of the Association, and to report the result
of such examination in writing to the Board at the next regular meeting
thereafter. Such report shall state whether the Association is in a sound
condition, whether adequate internal audit controls and procedures are being
maintained and shall recommend to the Board such changes in the manner of doing
business or conducting the affairs of the Association as shall be deemed
advisable.
Section 3.3. Executive Committee. The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate an Executive Committee. The
Executive Committee shall consist of three or more directors, one of whom shall
be the President. The Executive Committee shall serve at the pleasure of the
Board of Directors.
Section 3.3(a) Authority. The Executive Committee, to the extent provided in
such resolution, shall have and may exercise all of the authority of the Board
of Directors in the management of the business and affairs of the corporation. A
vacancy occurring in the Executive Committee may be filled by the Board of
Directors in the manner provided for original designation. Time, place and
notice of Executive Committee meetings shall be determined by the Executive
Committee.
Section 3.3(b) Quorum; Majority Vote. At meetings of the Executive Committee, a
majority of the number of members designated by the Board of Directors shall
constitute a quorum for the transaction of business. The act of a majority of
the members present at any meeting at which a quorum is present shall be the act
of the Executive Committee, except as otherwise specifically provided by the
laws of the United States, or these Bylaws. If a quorum is not present at a
meeting of the Executive Committee the members present may adjourn the meeting
from time to time, without notice other than an announcement at the meeting,
until a quorum is present. The Executive Committee shall keep regular minutes of
its proceedings and report the same to the
EXHIBIT 4-Page 4
Board of Directors when required. The minutes of the proceedings of the
Executive Committee shall be placed in the minute book of the Association.
Section 3.3(c). Action Without Meeting. Any action required or permitted to be
taken at a meeting of the Executive Committee may be taken without a meeting if
a consent in writing, setting forth the action so taken, is signed by all the
members of the Executive Committee. Such consent shall have the same force and
effect as an unanimous vote at a meeting. The signed consent, or a signed copy,
shall be placed in the minute book. The designation of an Executive Committee
and the delegation of authority to it shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility imposed upon it or him
by law.
Section. 3.3(d). Legal Counsel. The Executive Committee may exercise the Board
of Directors' authority to retain legal counsel to represent the Association. No
officer of the Association may retain legal counsel to represent the Association
without the prior consent of the Executive Committee of Board of Directors.
Section 3.4. Other Committees. The Board of Directors may appoint, from time to
time, from its own members, other committees of one or more persons for such
purposes and with such powers as the Board may determine.
ARTICLE IV
Officers and Employees
Section 4.1. Chairman of the Board. The Board of Directors shall appoint one of
its members to be Chairman of the Board to serve at the pleasure of the Board.
He shall preside at all meetings of the Board of Directors. The Chairman of the
Board shall supervise the carrying out of the policies adopted or approved by
the Board. He shall have general executive powers, as well as the specific
powers conferred by these Bylaws. He shall also have and may exercise such
further powers and duties as from time to time may be conferred upon, or
assigned to him by the board of Directors.
Section 4.2. Vice Chairman of the Board. The Board of Directors shall appoint
one of its members to be Vice Chairman of the Board to serve at the pleasure of
the Board. In the absence of the Chairman of the Board, he shall preside at any
meeting of the Board. The Vice Chairman of the Board will have the power and the
authority (subject to the approval of the Board) to nominate the Directors to
Committees of the Board as well as have such powers and duties as from time to
time may be conferred upon, or assigned to him by the Board of Directors.
Section 4.3. President. The Board of Directors shall appoint one of its members
to be President of the Association. In the absence of the Chairman and
Vice-Chairman he shall preside at any meeting of the Board. The President shall
have general executive powers, and shall have and may exercise any and all other
powers and duties pertaining by law, regulation, or practice, to the office of
President, or imposed by these Bylaws. He shall also have and may exercise such
other power and duties as from time to time may be conferred upon or assigned to
him by the Board of Directors.
EXHIBIT 4-Page 5
Section 4.4. Vice President. The Board of Directors may appoint one or more Vice
Presidents. Each Vice President shall have such powers and duties as may be
assigned to him by the Board of Directors. One Vice President shall be
designated by the Board of Directors, in the absence of the President, to
perform all the duties of the President.
Section 4.5. Secretary. The Board of Directors shall appoint a Secretary,
Cashier, or other designated officer who shall be Secretary of the Board and of
the Association, and shall keep accurate minutes required by these Bylaws to be
given. He shall be custodian of the corporate seal, records, documents and
papers of the Association. He shall provide for the keeping of proper records of
all transactions of the Association. He shall have and may exercise any and all
other powers and duties pertaining by law, regulation or practice, to the office
of Cashier, or imposed by these Bylaws. He shall also perform such other duties
as may be assigned to him, from time to time, by the Board of Directors.
Section 4.6. Other Officers. The Board of Directors may appoint one or more
Assistant Vice Presidents, one or more Assistant Secretaries, one or more
Assistant Cashiers, and such other officers and Attorneys-in-fact as from time
to time may appear to the Board of Directors to be required or desirable to
transact the business of the Association. Such officers shall respectively
exercise such powers and perform such duties as pertain to their several
officers, or as may be conferred upon, or assigned to, them by the Board of
Directors, the Chairman of Board, or the President.
Section 4.7. Clerks and Agents. The Board of Directors may appoint, from time to
time, such Paying Tellers, Receiving Tellers, Note Tellers, Vault Custodians,
bookkeepers and other clerks, agents and employees as it may deem advisable for
the prompt and orderly transaction of the business of the Association, define
their duties, fix their salaries to be paid them and dismiss them. Subject to
the authority of the Board of Directors, the President, or any other officer of
the Association authorized by him may appoint and dismiss all or any clerks,
agents and employees and prescribe their duties and the conditions of their
employments, and from time to time fix their compensation.
Section 4.8. Tenure of Office. Unless otherwise specified by the Board at the
time of election or appointment, or in an employment contract approved by the
Board, each officer's and agent's term shall end at the first meeting of
directors after the next annual meeting of shareholders. He shall serve until
the end of his term or, if earlier, his death, resignation. Or removal.
Section 4.9. Removal. Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in its judgement the
best interest of the corporation will be served thereby. Such removal shall be
without prejudice or the contract rights, if any, of the person so removed.
Election or appointment or an officer or agent shall not of itself create
contract rights.
Section 4.10. Vacancies. Any vacancy occurring in any office of the Association
may be filled by the Board of Directors.
EXHIBIT 4-Page 6
ARTICLE V
Stock and Stock Certificates
Section 5.1. Shareholder's List. The President and Cashier shall cause to be
kept at all times a full and correct list of the names and residences of all the
shareholders in the Association, and the number of shares held by each, in the
office where its business is transacted.
Section 5.2. Transfers. Shares of stock shall be transferable on the books of
the Association and a transfer book shall be kept in which all transfers of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to his shares, succeed to all rights and liabilities of the
prior holder of such shares.
Section 5.3. Stock Certificates. Certificates of stock shall bear the signature
of the President (which may be engraved, printed or impressed) and shall be
signed manually or by facsimile process by the Secretary, Assistant Secretary,
Cashier, Assistant Cashier or any other officer appointed by the Board of
Directors for that purpose, to be known as an Authorized Officer, and the seal
of the Association shall be engraved thereon. Each certificate shall recite on
its face that the stock represented thereby is transferable only upon the books
of the Association properly endorsed.
Section 5.4. Lost, Stolen, or Destroyed Certificates. The corporation shall
issue a new certificate in place of any certificate for shares previously issued
subject to the conditions set forth in Section 5.4(a). and Section 5.5.
Section 5.4(a) Requirements. The registered owner of the certificate shall
furnish proof in affidavit form that it has been lost, destroyed or wrongfully
taken; and requests the issuance of a new certificate before the corporation has
notice that the certificate has been acquired by a purchaser for value in good
faith and without notice of an adverse claim and gives a bond in such form, and
with such surety or sureties, with fixed or open in such form, and with such
surety or sureties, with fixed or open penalty, as the Association may direct,
to indemnify the Association against any claim that may be made on account of
the alleged loss, destruction or theft of the certificate; and satisfies any
other reasonable requirements imposed by the Association. When a certificate has
been lost, apparently destroyed or wrongfully taken, and the holder of record
fails to notify the Association within a reasonable time after he has notice of
it, and the corporation registers a transfer of the shares represented by the
certificate before receiving such notification, the holder of record is
precluded from making any claim against the Association for the transfer or for
a new certificate.
Section 5.5. Registered Owner. Prior to due presentment for registration of
transfer of a certificate for shares, the Association may treat the registered
owner as the person exclusively entitled to vote, to receive notices and
otherwise to exercise all the rights and powers of a shareholder.
EXHIBIT 4-Page 7
ARTICLE VI
Corporate Seal
The President, the Cashier, the Secretary or any Assistant Cashier or Assistant
Secretary, or other officer thereunto designated by the Board of Directors,
shall have authority to affix the corporate seal to any document requiring such
seal, and to attest the same. Such seal shall be substantially in the following
form:
[imprint of seal]
ARTICLE VII
Miscellaneous Provisions
Section 7.1. Fiscal Year. The fiscal year of the Association shall be the
calendar year.
Section 7.2. Execution of Instruments. All agreements, indentures, mortgages,
deeds, conveyances, transfers, certificates, declarations, receipts, discharges,
releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds, undertakings, proxies and other instruments or documents, may
be signed, executed, acknowledged, verified, delivered or accepted on behalf of
the Association by the Chairman of the Board, or the President, or any Vice
President, or the Secretary, or the Cashier, or by any of said officers. Any
such instruments may also be executed, acknowledged, verified, delivered or
accepted on behalf of the Association in such other manner and by such other
officers as the Board of Directors may from time to time direct. The provisions
of this Section 7.2 are supplementary to any other provision of these Bylaws.
Section 7.3. Records. The Articles of the Association, the Bylaws, the
proceedings of all meetings of the shareholders, the proceedings of the Board of
Directors and standing committees of the Board shall be recorded in appropriate
minute books provided for that purpose. The minutes of each meeting shall be
signed by the Secretary, Cashier or other officers appointed to act as Secretary
of the meeting.
Section 7.4. Banking Hours. Banking hours of The Herring National Bank and its
various branches shall be set by the Board of Directors. Banking hours of the
EXHIBIT 4-Page 8
main office of the Association may or may not be consistent with those set at
the various branches. Banking hours at all locations will comply with national
banking regulations.
ARTICLE VIII
Bylaws
Section 8.1. Inspection. A copy of the Bylaws, with all amendments thereto,
shall at all times be kept in a convenient place at the Office of the
Association, and shall be open for inspection to all shareholders, during
banking hours.
Section 8.2. Amendments. These Bylaws may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holder of a majority
of the stock of the Association, unless the vote of the holders of a greater
amount of stock is required by law and in that case by the vote of the holders
of such greater amount. The shareholders, in amending, repealing, or adopting a
particular Bylaw may expressly provide that the Board of Directors may not amend
or repeal that Bylaw. This Bylaw may not be amended of repealed by a vote of the
Board of Directors.
ARTICLE IX
Fiduciary Activities
Section 9.1. Governance. The Vice Chairman shall appoint (subject to the
approval of the Board of Directors) those Committees which the Board of
Directors deem necessary to implement, transact and monitor the fiduciary duties
of the Association in accordance with the applicable laws of the State of Texas
and the United States.
Section 9.2. Trust Audit Committee. The Vice Chairman shall appoint (subject to
the approval of the Board of Directors) a Trust Audit Committee composed of
directors, exclusive of any active officer of the Association. The Trust Audit
Committee shall also at least once during each calendar year and within 15
months of the last such audit make suitable audits of the Association's
fiduciary activities or cause suitable audits to be made by auditors responsible
only to the Board of Directors and at such time ascertain whether fiduciary
powers have been administered according to law, Part 9 of the Regulations of the
Comptroller of Currency and sound fiduciary principles.
Section 9.3. Trust Policy Committee. The Vice Chairman shall appoint (subject to
the approval of the Board of Directors) a Trust Policy Committee of the
Association composed of members who shall be capable and experienced officers
and directors of the Association. The Trust Policy Committee shall cause to be
written a Policy Manual outlining the fiduciary policies of the Association. The
Policy Manual and all additions and deletions to the Manual shall be presented
to the Board of Directors for approval.
Section 9.4. Trust Operations Committee. The Vice Chairman shall appoint
(subject to the approval of the Board of Directors) a Trust Operations Committee
of the Association composed
EXHIBIT 4-Page 9
of members who shall be capable and experienced officers or directors of the
Association. The Trust Operations Committee shall meet as often as necessary to
review acceptance or termination of fiduciary accounts, discretionary
distributions, annual fiduciary account reviews, all other business which may
come before the committee and enact those policies and procedures outlined in
the Policy Manual. All actions of the Trust Operations Committee shall be
entered in the minutes of this Committee's meetings. The Trust Operations
Committee shall report to the Trust Policy Committee no less than semi-annually.
Section 9.5. Fiduciary Files. There shall be maintained by the Association all
fiduciary records necessary to assure that its fiduciary responsibilities have
been properly undertaken and discharged.
Section 9.6. Trust Investments. Funds held in a fiduciary capacity shall be
invested according to the instrument establishing the fiduciary relationship and
local law. Where such instrument does not specify the character and class of
investments to be made and does not vest in the Association a discretion in the
matter, funds held pursuant to such instrument shall be invested in investments
in which corporate fiduciaries may invest under local law.
IN WITNESS WHEREOF, we have hereunto set our hands this ______ day of
_____________, 1996.
IN TESTIMONY WHEREOF, I Donna Stribling, Secretary of The Herring National Bank,
have hereunto affixed my official signature and the seal of the said Bank, in
the City of Vernon, on this _____ day of __________________, 1996.
------------------------------------
Donna Stribling,
Secretary
APPROVED BY:
- -----------------------------------
Curtis Johnson,
President
EXHIBIT 4-Page 10
Exhibit 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, THE HERRING NATIONAL BANK hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: September 28, 2004
THE HERRING NATIONAL BANK
By: /s/ Catanta Gray
---------------------------------------------
Catana Gray
Vice President and Manager
EXHIBIT 6 - Page 1
Exhibit 7
The Herring National Bank
Statement of Financial Condition
As of 12/31/2003
Assets
Cash in Vaults and Due from Banks $ 12,237,000
U.S. Government Agencies & Other Obligations 8,146,000
State, County, and Municipal Bonds and Warrants 13,345,000
All Other Securities 13,080,000
Federal Funds Sold 7,293,000
Loans and Discounts 257,275,000
Banking Premises, Furniture and Fixtures 4,189,000
Other Assets 17,393,000
-------------
Total Assets $332,958,000
Liabilities
Deposits $299,202,000
Other Liabilities 4,314,000
-------------
Total Liabilities $303,516,000
Capital Stock $ 1,000,000
Surplus 9,449,000
Undivided Profits 18,993,000
----------
Total Capital 29,442,000
Total Liabilities and Capital $332,958,000
To the best of the undersigned's determination, as of the date hereof, the above
financial information is true and correct.
THE HERRING NATIONAL BANK
By: /s/ Catana Gray
------------------------------------------------------
Catana Gray
Vice President and Manager
Date: September 28, 2004
EXHIBIT 7 - Page 1