EXHIBIT 4.29
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AMENDED AND RESTATED TRUST AGREEMENT
AMONG
HAWTHORNE FINANCIAL CORPORATION,
as Depositor
THE BANK OF NEW YORK,
as Property Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
as Administrative Trustees
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Dated as of November 1, 2002
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HFC CAPITAL TRUST IV
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINED TERMS........................................................................... 1
SECTION 1.1. Definitions...................................................................... 1
ARTICLE II. THE TRUST............................................................................... 10
SECTION 2.1. Name............................................................................. 10
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business...................... 10
SECTION 2.3. Initial Contribution of Trust Property; Fees, Costs and Expenses................. 11
SECTION 2.4. Purposes of Trust................................................................ 11
SECTION 2.5. Authorization to Enter into Certain Transactions................................. 11
SECTION 2.6. Assets of Trust.................................................................. 14
SECTION 2.7. Title to Trust Property.......................................................... 14
ARTICLE III. PAYMENT ACCOUNT; PAYING AGENTS.......................................................... 14
SECTION 3.1. Payment Account.................................................................. 14
SECTION 3.2. Appointment of Paying Agents..................................................... 15
ARTICLE IV. DISTRIBUTIONS; REDEMPTION............................................................... 15
SECTION 4.1. Distributions.................................................................... 15
SECTION 4.2. Redemption....................................................................... 17
SECTION 4.3. Subordination of Common Securities............................................... 19
SECTION 4.4. Payment Procedures............................................................... 20
SECTION 4.5. Withholding Tax.................................................................. 20
SECTION 4.6. Tax Returns and Other Reports.................................................... 21
SECTION 4.7. Payment of Taxes, Duties, Etc. of the Trust...................................... 21
SECTION 4.8. Payments under Indenture or Pursuant to Direct Actions........................... 21
SECTION 4.9. Exchanges........................................................................ 21
SECTION 4.10. Calculation Agent................................................................ 22
SECTION 4.11. Certain Accounting Matters....................................................... 23
ARTICLE V. SECURITIES.............................................................................. 23
SECTION 5.1. Initial Ownership................................................................ 23
SECTION 5.2. Authorized Trust Securities...................................................... 23
SECTION 5.3. Issuance of the Common Securities; Subscription and Purchase of Notes............ 23
SECTION 5.4. The Securities Certificates...................................................... 24
SECTION 5.5. Rights of Holders................................................................ 24
SECTION 5.6. Book-Entry Preferred Securities.................................................. 25
SECTION 5.7. Registration of Transfer and Exchange of Preferred Securities Certificates....... 26
SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Securities Certificates..................... 28
SECTION 5.9. Persons Deemed Holders........................................................... 28
SECTION 5.10. Cancellation..................................................................... 28
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TABLE OF CONTENTS
(Continued)
Page
SECTION 5.11. Ownership of Common Securities by Depositor...................................... 29
SECTION 5.12. Restricted Legends............................................................... 29
SECTION 5.13. Form of Certificate of Authentication............................................ 32
ARTICLE VI. MEETINGS; VOTING; ACTS OF HOLDERS....................................................... 32
SECTION 6.1. Notice of Meetings............................................................... 32
SECTION 6.2. Meetings of Holders of the Preferred Securities.................................. 33
SECTION 6.3. Voting Rights.................................................................... 33
SECTION 6.4. Proxies, Etc..................................................................... 33
SECTION 6.5. Holder Action by Written Consent................................................. 33
SECTION 6.6. Record Date for Voting and Other Purposes........................................ 34
SECTION 6.7. Acts of Holders.................................................................. 34
SECTION 6.8. Inspection of Records............................................................ 35
SECTION 6.9. Limitations on Voting Rights..................................................... 35
SECTION 6.10. Acceleration of Maturity; Rescission of Annulment; Waivers of Past Defaults...... 36
ARTICLE VII. REPRESENTATIONS AND WARRANTIES.......................................................... 38
SECTION 7.1. Representations and Warranties of the Property Trustee and the Delaware Trustee.. 38
SECTION 7.2. Representations and Warranties of Depositor...................................... 39
ARTICLE VIII. THE TRUSTEES............................................................................ 40
SECTION 8.1. Number of Trustees............................................................... 40
SECTION 8.2. Property Trustee Required........................................................ 40
SECTION 8.3. Delaware Trustee Required........................................................ 41
SECTION 8.4. Appointment of Administrative Trustees........................................... 41
SECTION 8.5. Duties and Responsibilities of the Trustees...................................... 42
SECTION 8.6. Notices of Defaults and Extensions............................................... 43
SECTION 8.7. Certain Rights of Property Trustee............................................... 44
SECTION 8.8. Delegation of Power.............................................................. 46
SECTION 8.9. May Hold Securities.............................................................. 46
SECTION 8.10. Compensation; Reimbursement; Indemnity........................................... 46
SECTION 8.11. Resignation and Removal; Appointment of Successor................................ 47
SECTION 8.12. Acceptance of Appointment by Successor........................................... 49
SECTION 8.13. Merger, Conversion, Consolidation or Succession to Business...................... 49
SECTION 8.14. Not Responsible for Recitals or Issuance of Securities........................... 49
SECTION 8.15. Property Trustee May File Proofs of Claim........................................ 49
SECTION 8.16. Reports to and from the Property Trustee......................................... 50
ARTICLE IX. TERMINATION, LIQUIDATION AND MERGER..................................................... 51
SECTION 9.1. Dissolution Upon Expiration Date................................................. 51
SECTION 9.2. Early Termination................................................................ 51
SECTION 9.3. Termination...................................................................... 51
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TABLE OF CONTENTS
(Continued)
Page
SECTION 9.4. Liquidation...................................................................... 51
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of Trust.................. 53
ARTICLE X. MISCELLANEOUS PROVISIONS................................................................ 54
SECTION 10.1. Limitation of Rights of Holders.................................................. 54
SECTION 10.2. Agreed Tax Treatment of Trust and Trust Securities............................... 55
SECTION 10.3. Amendment........................................................................ 55
SECTION 10.4. Separability..................................................................... 56
SECTION 10.5. Governing Law.................................................................... 56
SECTION 10.6. Successors....................................................................... 57
SECTION 10.7. Headings......................................................................... 57
SECTION 10.8. Reports, Notices and Demands..................................................... 57
SECTION 10.9. Agreement Not to Petition........................................................ 58
Exhibit A Certificate of Trust of HFC Capital Trust IV
Exhibit B Form of Common Securities Certificate
Exhibit C Form of Preferred Securities Certificate
Exhibit D Junior Subordinated Indenture
Exhibit E Form of Transferee Certificate to be Executed by Transferees other than QIBs
Exhibit F Form of Transferee Certificate to be Executed by QIBs
Schedule A Calculation of LIBOR
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of November 1, 2002,
among (i) Hawthorne Financial Corporation, a Delaware corporation (including any
successors or permitted assigns, the "Depositor"), (ii) The Bank of New York, a
New York banking corporation, as property trustee (in such capacity, the
"Property Trustee"), (iii) The Bank of New York (Delaware), a Delaware banking
corporation, as Delaware trustee (in such capacity, the "Delaware Trustee"),
(iv) Simone Lagomarsino, an individual, David Rosenthal, an individual and
Eileen Lyon, an individual, each of whose address is c/o Hawthorne Financial
Corporation, 2381 Rosecrans Avenue, El Segundo, California 90245, as
administrative trustees (in such capacities, each an "Administrative Trustee"
and, collectively, the "Administrative Trustees" and, together with the Property
Trustee and the Delaware Trustee, the "Trustees") and (v) the several Holders,
as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee
have heretofore created a Delaware statutory trust pursuant to the Delaware
Statutory Trust Act by entering into a Trust Agreement, dated as of October 24,
2002 (the "Original Trust Agreement"), and by executing and filing with the
Secretary of State of the State of Delaware the Certificate of Trust,
substantially in the form attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Purchase Agreement and (iii) the acquisition by the Trust
from the Depositor of all of the right, title and interest in and to the Notes;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
DEFINED TERMS
SECTION 1.1. 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 I have the meanings
assigned to them in this Article I;
(b) the words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation";
(c) all accounting terms used but not defined herein have
the meanings assigned to them in accordance with United States
generally accepted accounting principles;
(d) unless the context otherwise requires, any reference
to an "Article", a "Section", a "Schedule" or an "Exhibit" refers to an
Article, a Section, a Schedule or an Exhibit, as the case may be, of or
to this Trust Agreement;
(e) the words "hereby", "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;
(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.
"Act" has the meaning specified in Section 6.7.
"Additional Interest" has the meaning specified in Section 1.1 of the
Indenture.
"Additional Interest Amount" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, the amount of Additional
Interest paid by the Depositor on a Like Amount of Notes for such period.
"Additional Taxes" has the meaning specified in Section 1.1 of the
Indenture.
"Additional Tax Sums" has the meaning specified in Section 10.5 of the
Indenture.
"Administrative Trustee" means each of the Persons identified as an
"Administrative Trustee" in the preamble to this Trust Agreement, solely in each
such Person's capacity as Administrative Trustee of the Trust and not in such
Person's individual capacity, or any successor Administrative 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 Depositary Procedures" means, with respect to any transfer
or transaction involving a Book-Entry Preferred Security, the rules and
procedures of the Depositary for such Book-Entry Preferred Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.
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"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction
in the premises (i) judging such Person a bankrupt or insolvent, (ii)
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, (iii) appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of such Person or of any substantial part of its property or
(iv) 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 sixty (60) consecutive days; or
(b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or 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 any such petition or to the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of such
Person or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, 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 a bankrupt or insolvent, or
the taking of corporate action by such Person in furtherance of any
such action.
"Bankruptcy Laws" means all Federal and state bankruptcy, insolvency,
reorganization and other similar laws, including the United States Bankruptcy
Code.
"Book-Entry Preferred Security" means a Preferred Security, the
ownership and transfers of which shall be made through book entries by a
Depositary.
"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 are authorized or
required by law or executive order to remain closed or (c) a day on which the
Corporate Trust Office is closed for business.
"Calculation Agent" has the meaning specified in Section 4.10.
"Capital Disqualification Event" has the meaning specified in Section
1.1 of the Indenture.
"Closing Date" has the meaning specified in the Purchase Agreement.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this Trust Agreement such Commission is not existing and performing
the duties assigned to it, then the body performing such duties at such time.
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"Common Securities Certificate" means a certificate evidencing
ownership of 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.
"Corporate Trust Office" means the principal office of the Property
Trustee at which any particular time its corporate trust business shall be
administered, which office at the date of this Trust Agreement is located at 101
Barclay Street, New York, New York 10286, Attention: Corporate Trust
Administration.
"Definitive Preferred Securities Certificates" means Preferred
Securities issued in certificated, fully registered form that are not Global
Preferred Securities.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., or any successor statute
thereto, in each case as amended from time to time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Delaware Trustee of the Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor Delaware Trustee
appointed as herein provided.
"Depositary" means an organization registered as a clearing agency
under the Exchange Act that is designated as Depositary by the Depositor or any
successor thereto. DTC will be the initial Depositary.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book-entry transfers and pledges of securities deposited with the Depositary.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement and any successors and permitted assigns.
"Depositor Affiliate" has the meaning specified in Section 4.9.
"Distribution Date" has the meaning specified in Section 4.1(a)(i).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company or any successor thereto.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or
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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 Note Event of Default; or
(b) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period
of thirty (30) days; or
(c) default by the Trust 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 those specified in clause (b) or (c) above) and continuation of
such default or breach for a period of thirty (30) days after there has
been given, by registered or certified mail, to the Trustees and to the
Depositor by the Holders of at least twenty five percent (25%) in
aggregate Liquidation Amount of the Outstanding Preferred 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 if a successor Property Trustee has not been appointed within
ninety (90) days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, and any
successor statute thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Extension Period" has the meaning specified in Section 4.1(a)(ii).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, as from time to time constituted or, if at any time after the
execution of this Trust Agreement such Board is not existing and performing the
duties now assigned to it, then the body performing such duties at such time.
"Fiscal Year" shall be the fiscal year of the Trust, which shall be the
calendar year, or such other period as is required by the Code.
"Global Preferred Security" means a Preferred Securities Certificate
evidencing ownership of Book-Entry Preferred Securities.
"Guarantee Agreement" means the Guarantee Agreement executed and
delivered by the Depositor and The Bank of New York, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement for
the benefit of the holders of the Preferred Securities, as amended from time to
time.
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"Holder" means a Person in whose name a Trust Security or Trust
Securities are registered in the Securities Register; any such Person shall be a
beneficial owner within the meaning of the Delaware Statutory Trust Act.
"Indemnified Person" has the meaning specified in Section 8.10(c).
"Indenture" means the Junior Subordinated Indenture executed and
delivered by the Depositor and the Note Trustee contemporaneously with the
execution and delivery of this Trust Agreement, for the benefit of the holders
of the Notes, a copy of which is attached hereto as Exhibit D, as amended or
supplemented from time to time.
"Indenture Redemption Price" has the meaning specified in Section
4.2(c).
"Interest Payment Date" has the meaning specified in Section 1.1 of the
Indenture.
"Investment Company Act" means the Investment Company Act of 1940, or
any successor statute thereto, in each case as amended from time to time.
"Investment Company Event" has the meaning specified in Section 1.1 of
the Indenture.
"LIBOR" has the meaning specified in Schedule A.
"LIBOR Business Day" has the meaning specified in Schedule A.
"LIBOR Determination Date" has the meaning specified in Schedule A.
"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 any Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Notes to be contemporaneously redeemed or paid at maturity in
accordance with the Indenture, the proceeds of which will be used to pay the
Redemption Price of such Trust Securities, (b) with respect to a distribution of
Notes to Holders of Trust Securities in connection with a dissolution of the
Trust, Notes having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Notes are distributed and (c) with
respect to any distribution of Additional Interest Amounts to Holders of Trust
Securities, Notes 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 on which assets are to be distributed
to Holders in accordance with Section 9.4(a) hereunder following dissolution of
the Trust.
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
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"Majority in Liquidation Amount of the Preferred Securities" means
Preferred Securities representing more than fifty percent (50%) of the aggregate
Liquidation Amount of all (or a specified group of) then Outstanding Preferred
Securities.
"Note Event of Default" means any "Event of Default" specified in
Section 5.1 of the Indenture.
"Note Redemption Date" means, with respect to any Notes to be redeemed
under the Indenture, the date fixed for redemption of such Notes under the
Indenture.
"Note Trustee" means the Person identified as the "Trustee" in the
Indenture, solely in its capacity as Trustee pursuant to the Indenture and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Trustee appointed as provided in the Indenture.
"Notes" means the Depositor's Floating Rate Junior Subordinated Notes
issued pursuant to the Indenture.
"Office of Thrift Supervision" means the Office of Thrift Supervision,
as from time to time constituted or, if at any time after the execution of this
Trust Agreement such Office is not existing and performing the duties now
assigned to it, then the body performing such duties at such time.
"Officers' Certificate" means a certificate signed by the Chief
Executive Officer, the President or an Executive Vice President, and by the
Chief Financial Officer, Treasurer or an Assistant Treasurer, of the Depositor,
and delivered to the Trustees. Any Officers' Certificate delivered with respect
to compliance with a condition or covenant provided for in this Trust Agreement
(other than the certificate provided pursuant to Section 8.16) shall include:
(a) a statement by each officer signing the Officers' Certificate that
such officer 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 such officer in rendering the Officers'
Certificate;
(c) a statement that 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 such officer, such
condition or covenant has been complied with.
"Operative Documents" means the Purchase Agreement, the Indenture, the
Trust Agreement, the Guarantee Agreement, the Notes and the Trust Securities.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Depositor or any Affiliate of the Depositor.
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"Original Issue Date" means the date of original issuance of the Trust
Securities.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to any Trust Securities, means,
as of the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Trust Securities for which payment or redemption money in the
necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent in trust for the Holders of such Trust
Securities; 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 Trust Securities have been executed and delivered
pursuant to the provisions of this Trust Agreement, unless proof
satisfactory to the Property Trustee is presented that any such Trust
Securities are held by Holders in whose hands such Trust Securities are
valid, legal and binding obligations of the Trust;
provided, that in determining whether the Holders of the requisite Liquidation
Amount of the Outstanding Preferred Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Preferred
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or of any Trustee shall be disregarded and deemed not to be Outstanding, except
that (i) in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Preferred Securities that such Trustee knows to be so owned shall be so
disregarded and (ii) the foregoing shall not apply at any time when all of the
Outstanding Preferred Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Preferred Securities so owned that 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 Preferred Securities and that the pledgee is not the
Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee.
"Owner" means each Person who is the beneficial owner of Book-Entry
Preferred Securities as reflected in the records of the Depositary or, if a
Depositary Participant is not the beneficial owner, then the beneficial owner as
reflected in the records of the Depositary Participant.
"Paying Agent" means any Person authorized by the Administrative
Trustees to pay Distributions or other amounts in respect of any Trust
Securities on behalf of the Trust.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee for the benefit of the Holders
in which all amounts paid in
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respect of the Notes will be held and from which the Property Trustee, through
the Paying Agent, shall make payments to the Holders in accordance with Sections
3.1, 4.1 and 4.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated association or government, or
any agency or political subdivision thereof, or any other entity of whatever
nature.
"Preferred 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.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
C.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Property Trustee of the Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor Property Trustee
appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement executed and
delivered by the Trust, the Depositor and Trapeza CDO I, LLC, as purchaser,
contemporaneously with the execution and delivery of this Trust Agreement, as
amended from time to time.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act of 1933, as amended.
"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 Note Redemption Date and the stated maturity (or
any date of principal repayment upon early maturity) of the Notes shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption or payment at maturity
of a Like Amount of Notes.
"Reference Banks" has the meaning specified in Schedule A.
"Responsible Officer" means, with respect to the Property Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the Property Trustee 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.
"Securities Act" means the Securities Act of 1933, and any successor
statute thereto, in each case as amended from time to time.
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"Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.7.
"Successor Securities" has the meaning specified in Section 9.5(a).
"Tax Event" has the meaning specified in Section 1.1 of the Indenture.
"Trust" means the Delaware statutory trust known as "HFC Capital Trust
IV," which was created on October 28, 2002 under the Delaware Statutory Trust
Act pursuant to the Original Trust Agreement and the filing of the Certificate
of Trust, and continued pursuant to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented from time to time in
accordance with the applicable provisions hereof, including all Schedules and
Exhibits.
"Trustees" means the Administrative Trustees, the Property Trustee and
the Delaware Trustee, each as defined in this Article I.
"Trust Property" means (a) the Notes, (b) any cash on deposit in, or
owing to, the Payment Account and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
ARTICLE II.
THE TRUST
SECTION 2.1. Name.
The trust continued hereby shall be known as "HFC Capital Trust IV", 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 2.2. Office of the Delaware Trustee; Principal Place of
Business.
The address of the Delaware Trustee in the State of Delaware is White
Clay Center Route 273, Newark, Delaware 19711, Attention: Corporate Trust
Administration, or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Holders, the Depositor, the
Property Trustee and the Administrative Trustees. The principal executive
10
office of the Trust is c/o Hawthorne Financial Corporation, 2381 Rosecrans
Avenue, El Segundo, California 90245, Attention: Eileen Lyon, as such address
may be changed from time to time by the Administrative Trustees following
written notice to the Holders and the other Trustees.
SECTION 2.3. Initial Contribution of Trust Property; Fees, Costs and
Expenses.
The Property Trustee acknowledges receipt from the Depositor in
connection with the Original Trust Agreement of the sum of ten dollars ($10),
which constituted the initial Trust Property. The Depositor shall pay all fees,
costs and expenses of the Trust (except with respect to the Trust Securities) as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such fees, costs and expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
fees, costs or expenses.
SECTION 2.4. Purposes of Trust.
(a) The exclusive purposes and functions of the Trust are to (i)
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Notes and (ii) engage in only those activities necessary or incidental
thereto. The Delaware Trustee, the Property Trustee and the Administrative
Trustees are trustees of the Trust, and have all the rights, powers and duties
to the extent set forth herein. The Trustees hereby acknowledge that they are
trustees of the Trust.
(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 Trust (or the Trustees acting on behalf
of 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 Holders, except as expressly provided herein,
(iii) incur any indebtedness for borrowed money or issue any other debt, (iv)
take or consent to any action that would result in the placement of a Lien on
any of the Trust Property, (v) take or consent to any action that would
reasonably be expected to cause the Trust to become taxable as a corporation or
classified as other than a grantor trust for United States federal income tax
purposes, (vi) take or consent to any action that would cause the Notes to be
treated as other than indebtedness of the Depositor for United States federal
income tax purposes or (vii) take or consent to any action that would cause the
Trust to be deemed to be an "investment company" required to be registered under
the Investment Company Act.
SECTION 2.5. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in
accordance with and subject to the terms of this Trust Agreement. In accordance
with the following provisions (i) and (ii), the 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 the following:
(i) As among the Trustees, each Administrative Trustee
shall severally have the power and authority to act on behalf of the
Trust with respect to the following matters:
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(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, such
agreements as may be necessary or desirable in connection with
the purposes and function of the Trust, including, without
limitation, a common securities subscription agreement and a
junior subordinated note subscription agreement;
(C) assisting in the sale of the Preferred
Securities in one or more transactions exempt from
registration under the Securities Act, and in compliance with
applicable state securities or blue sky laws;
(D) assisting in the sending of notices (other
than notices of default) and other information regarding the
Trust Securities and the Notes to the Holders in accordance
with this Trust Agreement;
(E) the appointment of a Paying Agent and
Securities Registrar in accordance with this Trust Agreement;
(F) execution of the Trust Securities on behalf
of the Trust in accordance with this Trust Agreement;
(G) execution and delivery of closing
certificates, if any, pursuant to the Purchase Agreement and
application for a taxpayer identification number for the
Trust;
(H) preparation and filing of all applicable tax
returns and tax information reports that are required to be
filed on behalf of the Trust;
(I) establishing a record date with respect to
all actions to be taken hereunder that require a record date
to be established, except as provided in Section 6.10(a);
(J) unless otherwise required by the Delaware
Statutory Trust Act to execute on behalf of the Trust (either
acting alone or together with the other Administrative
Trustees) any documents that such Administrative Trustee has
the power to execute pursuant to this Trust Agreement; and
(K) the taking of any action incidental to the
foregoing as such Administrative Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement.
(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 receipt and holding of legal title of
the Notes;
(B) the establishment of the Payment Account;
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(C) the collection of interest, principal and
any other payments made in respect of the Notes and the
holding of such amounts in the Payment Account;
(D) the distribution through the Paying Agent of
amounts distributable to the Holders in respect of the Trust
Securities;
(E) the exercise of all of the rights, powers
and privileges of a holder of the Notes in accordance with the
terms of this Trust Agreement;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Notes to
the Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) 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 of the Trust with the Secretary of
State of the State of Delaware; and
(I) 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 Holders (without
consideration of the effect of any such action on any
particular Holder).
(b) In connection with the issue and sale of the Preferred
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):
(i) the negotiation of the terms of, and the execution
and delivery of, the Purchase Agreement providing for the sale of the
Preferred Securities in one or more transactions exempt from
registration under the Securities Act, and in compliance with
applicable state securities or blue sky laws; and
(ii) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(c) 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 be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes, so that the Notes will be treated as indebtedness
of the Depositor for United States federal income tax purposes and so that the
Trust will not be deemed to be an "investment company" required to be registered
under the Investment Company Act. In this connection, each Administrative
Trustee is authorized to take any action, not inconsistent with applicable law,
the Certificate of Trust or this Trust Agreement, that such Administrative
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Trustee determines in his or her 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 Outstanding Preferred Securities. In
no event shall the Administrative Trustees be liable to the Trust or the Holders
for any failure to comply with this Section 2.5 to the extent that such failure
results solely from a change in law or regulation or in the interpretation
thereof.
(d) Any action taken by a Trustee in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with any
Trustee acting on behalf of the Trust, no Person shall be required to inquire
into the authority of such Trustee to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of any
Trustee as set forth in this Trust Agreement.
SECTION 2.6. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.7. Title to Trust Property.
(a) Legal title to all Trust Property shall be vested at all times
in the Property Trustee and shall be held and administered by the Property
Trustee in trust for the benefit of the Trust and the Holders in accordance with
this Trust Agreement.
(b) The Holders shall not have any right or title to the Trust
Property 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.
ARTICLE III.
PAYMENT ACCOUNT; PAYING AGENTS
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and the Paying Agent 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 Holders
and for Distribution as herein provided.
(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 with respect to, the Notes. Amounts held in the Payment Account
shall not be invested by the Property Trustee pending distribution thereof.
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SECTION 3.2. Appointment of Paying Agents.
The Paying Agent shall initially be the Property Trustee. The Paying
Agent shall make Distributions to Holders 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 solely 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. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon thirty (30) days'
written notice to the Administrative Trustees and the Property Trustee. If the
Property Trustee 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 (which shall be a bank or trust company) to act as
Paying Agent. Such successor Paying Agent appointed by the Administrative
Trustees shall execute and deliver to the Trustees an instrument in which such
successor Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent will hold all sums, if any, held by it for payment to the
Holders in trust for the benefit of the Holders entitled thereto until such sums
shall be paid to such Holders. 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 Article VIII shall apply to the Property Trustee also in its role
as Paying Agent, for so long as the Property Trustee shall act as Paying Agent
and, to the extent applicable, to any other Paying Agent appointed hereunder.
Any reference in this Trust Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests
in the Trust Property, and Distributions (including any Additional Interest
Amounts) will be made on the Trust Securities at the rate and on the dates that
payments of interest (including any Additional Interest) are made on the Notes.
Accordingly:
(i) Distributions on the Trust Securities shall be
cumulative, and shall accumulate whether or not there are funds of the
Trust available for the payment of Distributions. Distributions shall
accumulate from November 1, 2002, and, except as provided in clause
(ii) below, shall be payable semi-annually in arrears on May 15th and
November 15th of each year, commencing on May 15, 2003. If any date on
which a Distribution is otherwise payable on the Trust Securities is
not a Business Day, then the payment of such Distribution shall be made
on the next succeeding Business Day (and no interest shall accrue in
respect of the amounts whose payment is so delayed for the period from
and after each such date until the next succeeding Business Day),
except that, if such Business Day falls 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
15
effect as if made on such date (each date on which Distributions are
payable in accordance with this Section 4.1(a)(i), a "Distribution
Date");
(ii) in the event (and to the extent) that the Depositor
exercises its right under the Indenture to defer the payment of
interest on the Notes, Distributions on the Trust Securities shall be
deferred. Under the Indenture, so long as no Note Event of Default has
occurred and is continuing, the Depositor shall have the right, at any
time and from time to time during the term of the Notes, to defer the
payment of interest on the Notes for a period of up to ten (10)
consecutive semi-annual interest payment periods (each such extended
interest payment period, an "Extension Period"), during which Extension
Period no interest on the Notes shall be due and payable (except any
Additional Tax Sums that may be due and payable). No interest on the
Notes 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 payment of such interest would be
legally enforceable) at the rate equal to LIBOR plus 3.35% per annum,
provided, that, the applicable interest rate shall not exceed 12.0%
through the Interest Payment Date in November, 2007, compounded
semiannually, from the dates on which amounts would have otherwise been
due and payable until paid or until funds for the payment thereof have
been made available for payment. If Distributions are deferred, the
deferred Distributions (including Additional Interest Amounts) shall be
paid on the date that the related Extension Period terminates, to
Holders of the Trust Securities as they appear on the books and records
of the Trust on the record date immediately preceding such termination
date.
(iii) Distributions shall accumulate in respect of the
Trust Securities at a variable rate equal to LIBOR plus 3.35% of the
Liquidation Amount of the Trust Securities, such rate being the rate of
interest payable on the Notes, provided, that, the applicable
Distribution rate shall not exceed 12.0% through the Distribution Date
in November, 2007. LIBOR shall be determined by the Calculation Agent
in accordance with Schedule A. The amount of Distributions payable for
any period less than a full Distribution period shall be computed on
the basis of a 360-day year and the actual number of days elapsed in
the relevant Distribution period. The amount of Distributions payable
for any period shall include any Additional Interest Amounts in respect
of such period; and
(iv) Distributions on the Trust Securities shall be made
by the Paying Agent from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Trust has funds then
on hand and 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 at the close of business on the fifteenth
day (whether or not a Business Day) preceding the relevant Distribution Date.
Distributions payable on any Trust Securities that are not punctually paid on
any Distribution Date as a result of the Depositor having failed to make an
interest payment under the Notes will cease to be payable to the Person in whose
name such Trust Securities are registered on the
16
relevant record date, and such defaulted Distributions and any Additional
Interest Amounts will instead be payable to the Person in whose name such Trust
Securities are registered on the special record date, or other specified date
for determining Holders entitled to such defaulted Distribution and Additional
Interest Amount, established in the same manner, and on the same date, as such
is established with respect to the Notes under the Indenture.
SECTION 4.2. Redemption.
(a) On each Note Redemption Date and on the stated maturity (or
any date of principal repayment upon early maturity) of the Notes and on each
other date on (or in respect of) which any principal on the Notes is repaid, the
Trust will be required to redeem a Like Amount of Trust Securities 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 thirty (30) nor more
than sixty (60) days prior to the Redemption Date to each Holder of Trust
Securities to be redeemed, at such Holder's address appearing in the Securities
Register. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or, if the Redemption Price
cannot be calculated prior to the time the notice is required to be
sent, the estimate of the Redemption Price provided pursuant to the
Indenture, as calculated by the Depositor, together with a statement
that it is an estimate and that the actual Redemption Price will be
calculated by the Calculation Agent on the fifth Business Day prior to
the Redemption Date (and if an estimate is provided, a further notice
shall be sent of the actual Redemption Price on the date that such
Redemption Price is calculated);
(iii) if less than all the Outstanding Trust Securities are
to be redeemed, the identification (and, in the case of partial
redemption, the respective) and Liquidation Amounts of the particular
Trust Securities to be redeemed;
(iv) that on the Redemption Date, the Redemption Price
will become due and payable upon each such Trust Security, or portion
thereof, to be redeemed and that Distributions thereon will cease to
accumulate on such Trust Security or such portion, as the case may be,
on and after said date, except as provided in Section 4.2(d);
(v) the place or places where the Trust Securities are to
be surrendered for the payment of the Redemption Price; and
(vi) such other provisions as the Property Trustee deems
relevant.
(c) The Trust Securities (or portion thereof) redeemed on each
Redemption Date shall be redeemed at the Redemption Price with the proceeds from
the contemporaneous redemption or payment at maturity of Notes. Redemptions of
the Trust Securities (or portion thereof) shall be made and the Redemption Price
shall be payable on each Redemption Date only to the extent that the Trust has
funds then on hand and available in the Payment Account for the payment of such
Redemption Price. Under the Indenture, the Notes may be redeemed by the
Depositor on
17
any Interest Payment Date, at the Depositor's option, on or after November 15,
2007, in whole or in part, from time to time at a redemption price equal to one
hundred percent (100%) of the principal amount thereof, together, in the case of
any such redemption, with accrued interest, including any Additional Interest,
to but excluding the date fixed for redemption (the "Indenture Redemption
Price"); provided, that the Depositor shall have received the prior approval of
the Office of Thrift Supervision if then required. The Notes may also be
redeemed by the Depositor, at its option, in whole but not in part, upon the
occurrence of a Capital Disqualification Event, an Investment Company Event or a
Tax Event at the Indenture Redemption Price.
(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then by 10:00 A.M., New York City time, on
the Redemption Date, the Depositor shall deposit sufficient funds with the
Property Trustee to pay the Redemption Price. If such deposit has been made by
such time, then by 12:00 noon, New York City time, on the Redemption Date, the
Property Trustee will, with respect to Book-Entry Preferred Securities,
irrevocably deposit with the Depositary for such Book-Entry Preferred
Securities, to the extent available therefor, funds sufficient to pay the
applicable Redemption Price and will give such Depositary irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities. With respect to Preferred Securities that are not
Book-Entry Preferred Securities, the Property Trustee will irrevocably deposit
with the Paying Agent, to the extent available therefor, funds sufficient to pay
the applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities (or portion thereof) called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register 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 Holders
holding Trust Securities (or portion thereof) so called for redemption will
cease, except the right of such Holders 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, and, in the case of a partial redemption,
the right of such Holders to receive a new Trust Security or Securities of
authorized denominations, in aggregate Liquidation Amount equal to the
unredeemed portion of such Trust Security or Securities, and such Securities (or
portion thereof) called for redemption will cease to be Outstanding. In the
event that any date on which any Redemption Price is payable is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding Business Day (and no interest shall accrue in respect of the
amounts whose payment is so delayed for the period from and after each such date
until the next succeeding Business Day), except that, if such Business Day falls
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 such date. In the event that payment of the Redemption Price in
respect of any Trust Securities (or portion thereof) called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee Agreement, Distributions on such Trust
Securities(or portion thereof) will continue to accumulate, as set forth in
Section 4.1, from the Redemption Date originally established by the Trust for
such Trust Securities(or portion thereof) 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.
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(e) Subject to Section 4.3(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated pro
rata to the Common Securities and the Preferred Securities based upon the
relative aggregate Liquidation Amounts of the Common Securities and the
Preferred Securities. The Preferred Securities to be redeemed shall be redeemed
on a pro rata basis based upon their respective Liquidation Amounts not more
than sixty (60) days prior to the Redemption Date by the Property Trustee from
the Outstanding Preferred Securities not previously called for redemption;
provided, however, that with respect to Holders that would be required to hold
less than one hundred (100) but more than zero (0) Trust Securities as a result
of such redemption, the Trust shall redeem Trust Securities of each such Holder
so that after such redemption such Holder shall hold either one hundred (100)
Trust Securities or such Holder no longer holds any Trust Securities, and shall
use such method (including, without limitation, by lot) as the Trust shall deem
fair and appropriate; and provided, further, that so long as the Preferred
Securities are Book-Entry Preferred Securities, such selection shall be made in
accordance with the Applicable Depositary Procedures for the Preferred
Securities by such Depositary. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Preferred Securities (or portion thereof)
selected for redemption and, in the case of any Preferred Securities selected
for partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of this Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Preferred Securities shall relate, in
the case of any Preferred Securities redeemed or to be redeemed only in part, to
the portion of the aggregate Liquidation Amount of Preferred Securities that has
been or is to be redeemed.
(f) The Trust in issuing the Trust Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall
indicate the "CUSIP" numbers of the Trust Securities in notices of redemption
and related materials 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 Trust Securities or as contained in any notice
of redemption and related materials.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional Interest
Amounts) on, the Redemption Price of and the Liquidation Distribution in respect
of, the Trust Securities, as applicable, shall be made, pro rata among the
Common Securities and the Preferred Securities based on the Liquidation Amount
of the respective Trust Securities; provided, that if on any Distribution Date,
Redemption Date or Liquidation Date an Event of Default shall have occurred and
be continuing, no payment of any Distribution (including any Additional Interest
Amounts) on, 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 any Additional
Interest Amounts) on all Outstanding Preferred 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
Preferred 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 Preferred Securities, shall have been made or provided for, and
all funds immediately available to the Property Trustee
19
shall first be applied to the payment in full in cash of all Distributions
(including any Additional Interest Amounts) on, or the Redemption Price of or
the Liquidation Distribution in respect of, the Preferred Securities then due
and payable.
(b) In the case of the occurrence of any Event of Default, the
Holders of the Common Securities shall have no right to act with respect to any
such Event of Default under this Trust Agreement until all such Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until all such Events of Default under this Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not on behalf of the Holders of the
Common Securities, and only the Holders of all the Preferred Securities will
have the right to direct the Property Trustee to act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including any Additional Interest Amounts),
the Redemption Price, Liquidation Amount or any other amounts in respect of the
Preferred Securities shall be made by wire transfer at such place and to such
account at a banking institution in the United States as may be designated in
writing at least ten (10) Business Days prior to the date for payment by the
Person entitled thereto unless proper written transfer instructions have not
been received by the relevant record date, in which case such payments shall be
made by check mailed to the address of such Person as such address shall appear
in the Securities Register. If any Preferred Securities are held by a
Depositary, such Distributions thereon shall be made to the Depositary in
immediately available funds. 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 all the Common Securities.
SECTION 4.5. Withholding Tax.
The Trust and the Administrative Trustees shall comply with all
withholding and backup withholding tax requirements under United States federal,
state and local law. The Administrative Trustees on behalf of the Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding and backup
withholding tax with respect to each Holder and any representations and forms as
shall reasonably be requested by the Administrative Trustees on behalf of the
Trust to assist it in determining the extent of, and in fulfilling, its
withholding and backup withholding tax obligations. The Administrative Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding and backup withholding tax is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay over
any amounts to any jurisdiction with respect to Distributions or allocations to
any Holder, the amount withheld shall be deemed to be a Distribution in the
amount of the withholding to the Holder. In the event of any claimed
overwithholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from actual
Distributions made, the Administrative Trustees on behalf of the Trust may
reduce subsequent Distributions by the amount of such required withholding.
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SECTION 4.6. Tax Returns and Other Reports.
(a) The Administrative Trustees shall prepare (or cause to be
prepared) at the principal office of the Trust in the United States, as defined
for purposes of Treasury regulations section 301.7701-7, at the Depositor's
expense, and file, all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. The Administrative Trustees shall prepare at the principal office of the
Trust in the United States, as defined for purposes of Treasury regulations
section 301.7701-7, and furnish (or cause to be prepared and furnished), by
January 31 in each taxable year of the Trust to each Holder all Internal Revenue
Service forms and returns required to be provided by the Trust. The
Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing.
(b) So long as the Property Trustee is the Holder of the Notes,
the Administrative Trustees will cause the Depositor's reports on Form H-(b)11
to be delivered to the Property Trustee promptly following their filing with the
Office of Thrift Supervision.
SECTION 4.7. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Notes of Additional Tax Sums and upon the
written direction of the Administrative Trustees, the Property Trustee shall
promptly pay, solely out of monies on deposit pursuant to this Trust Agreement,
any Additional Taxes imposed on the Trust by the United States or any other
taxing authority.
SECTION 4.8. Payments under Indenture or Pursuant to Direct Actions.
Any amount payable hereunder to any Holder of Preferred Securities
shall be reduced by the amount of any corresponding payment such Holder (or any
Owner with respect thereto) has directly received pursuant to Section 5.8 of the
Indenture or Section 6.10(b) of this Trust Agreement.
SECTION 4.9. Exchanges.
(a) If at any time the Depositor or any of its Affiliates (in
either case, a "Depositor Affiliate") is the Owner or Holder of any Preferred
Securities, such Depositor Affiliate shall have the right to deliver to the
Property Trustee all or such portion of its Preferred Securities as it elects
and receive, in exchange therefor, a Like Amount of Notes. Such election (i)
shall be exercisable effective on any Distribution Date by such Depositor
Affiliate delivering to the Property Trustee a written notice of such election
specifying the Liquidation Amount of Preferred Securities with respect to which
such election is being made and the Distribution Date on which such exchange
shall occur, which Distribution Date shall be not less than ten (10) Business
Days after the date of receipt by the Property Trustee of such election notice
and (ii) shall be conditioned upon such Depositor Affiliate having delivered or
caused to be delivered to the Property Trustee or its designee the Preferred
Securities that are the subject of such election by 10:00 A.M. New York time, on
the Distribution Date on which such exchange is to occur. After the exchange,
such Preferred Securities will be canceled and will no longer be deemed to be
Outstanding and all rights of the Depositor Affiliate with respect to such
Preferred Securities will cease.
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(b) In the case of an exchange described in Section 4.9(a), the
Property Trustee on behalf of the Trust will, on the date of such exchange,
exchange Notes having a principal amount equal to a proportional amount of the
aggregate Liquidation Amount of the Outstanding Common Securities, based on the
ratio of the aggregate Liquidation Amount of the Preferred Securities exchanged
pursuant to Section 4.9(a) divided by the aggregate Liquidation Amount of the
Preferred Securities Outstanding immediately prior to such exchange, for such
proportional amount of Common Securities held by the Depositor (which
contemporaneously shall be canceled and no longer be deemed to be Outstanding);
provided, that the Depositor delivers or causes to be delivered to the Property
Trustee or its designee the required amount of Common Securities to be exchanged
by 10:00 A.M. New York time, on the Distribution Date on which such exchange is
to occur.
SECTION 4.10. Calculation Agent.
(a) The Property Trustee shall initially, and for so long as it
holds any of the Notes, be the Calculation Agent for purposes of determining
LIBOR for each Distribution Date. The Calculation Agent may be removed by the
Administrative Trustees at any time. If the Calculation Agent is unable or
unwilling to act as such or is removed by the Administrative Trustees, the
Administrative Trustees will promptly appoint as a replacement Calculation Agent
the London office of a leading bank which is engaged in transactions in
six-month Eurodollar deposits in the international Eurodollar market and which
does not control or is not controlled by or under common control with the
Administrative Trustee or its Affiliates. The Calculation Agent may not resign
its duties without a successor having been duly appointed.
(b) The Calculation Agent shall be required to agree that, as soon
as possible after 11:00 a.m. (London time) on each LIBOR Determination Date, but
in no event later than 11:00 a.m. (London time) on the Business Day immediately
following each LIBOR Determination Date, the Calculation Agent will calculate
the interest rate (rounded to the nearest cent, with half a cent being rounded
upwards) for the related Distribution Date, and will communicate such rate and
amount to the Depositor, Trustee, each Paying Agent and the Depositary. The
Calculation Agent will also specify to the Administrative Trustee the quotations
upon which the foregoing rates and amounts are based and, in any event, the
Calculation Agent shall notify the Administrative Trustee before 5:00 p.m.
(London time) on each LIBOR Determination Date that either: (i) it has
determined or is in the process of determining the foregoing rates and amounts
or (ii) it has not determined and is not in the process of determining the
foregoing rates and amounts, together with its reasons therefor. The Calculation
Agent's determination of the foregoing rates and amounts for any Distribution
Date will (in the absence of manifest error) be final and binding upon all
parties. For the sole purpose of calculating the interest rate for the Trust
Securities, "Business Day" shall be defined as any day on which dealings in
deposits in Dollars are transacted in the London interbank market.
SECTION 4.11. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept at the principal office
of the Trust in the United States, as defined for purposes of Treasury
Regulations section 301.7701-7, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The
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books of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.
(b) The Administrative Trustees shall either (i), if the Depositor
is then subject to such reporting requirements, cause each Form 10-K and Form
10-Q prepared by the Depositor and filed with the Commission in accordance with
the Exchange Act to be delivered to each Holder, with a copy to the Property
Trustee, within thirty (30) days after the filing thereof or (ii) cause to be
prepared at the principal office of the Trust in the United States, as defined
for purposes of Treasury Regulations section 301.7701-7, and delivered to each
of the Holders, with a copy to the Property Trustee, within ninety (90) days
after the end of each Fiscal Year, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Trust shall maintain one or more bank accounts in the
United States, as defined for purposes of Treasury Regulations section
301.7701-7, in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Notes held by the Property
Trustee shall be made directly to the Payment Account and no other funds of the
Trust shall be deposited in the Payment Account. The sole signatories for such
accounts (including the Payment Account) shall be designated by the Property
Trustee.
ARTICLE V.
SECURITIES
SECTION 5.1. Initial Ownership.
Upon the creation of the Trust and the contribution by the Depositor
referred to in Section 2.3 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 5.2. Authorized Trust Securities.
The Trust shall be authorized to issue one series of Preferred
Securities having an aggregate Liquidation Amount of $15,000,000 and one series
of Common Securities having an aggregate Liquidation Amount of $464,000.
SECTION 5.3. Issuance of the Common Securities; Subscription and
Purchase of Notes.
On the Closing Date, an Administrative Trustee, on behalf of the Trust,
shall execute and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, evidencing an aggregate of 464 Common
Securities having an aggregate Liquidation Amount of $464,000, against receipt
by the Trust of the aggregate purchase price of such Common Securities of
$464,000. Contemporaneously therewith and with the sale by the Trust to the
Holders of an aggregate of 15,000 Preferred Securities having an aggregate
Liquidation Amount of $15,000,000, an Administrative Trustee, on behalf of the
Trust, shall subscribe for and purchase from the Depositor Notes, to be
registered in the name of the Property Trustee on behalf of the Trust and having
an aggregate principal amount equal to $15,464,000, and, in
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satisfaction of the purchase price for such Notes, the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the sum of $14,6250,000
(being the aggregate amount paid by the Holders for the Preferred Securities,
net of the discount, and the amount paid by the Depositor for the Common
Securities).
SECTION 5.4. The Securities Certificates.
(a) The Preferred Securities Certificates shall be issued in
minimum denominations of $100,000 Liquidation Amount and integral multiples of
$1,000 in excess thereof, and the Common Securities Certificates shall be issued
in minimum denominations of $10,000 Liquidation Amount and integral multiples of
$1,000 in excess thereof. The Securities Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of at least one
Administrative Trustee. Securities Certificates bearing the signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign such Securities Certificates 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 Securities Certificates or did not have
such authority at the date of delivery of such Securities Certificates.
(b) On the Closing Date, upon the written order of an authorized
officer of the Depositor, the Administrative Trustees shall cause Securities
Certificates to be executed on behalf of the Trust and delivered, without
further corporate action by the Depositor, in authorized denominations.
(c) The Preferred Securities issued on the Original Issue Date
shall be in definitive form. Upon the election of the Holder after their
original issuance, which election need not be in writing, Preferred Securities
shall be Book-Entry Preferred Securities issued in the form of one or more
Global Preferred Securities registered in the name of the Depositary, or its
nominee and deposited with the Depositary or a custodian for the Depositary for
credit by the Depositary to the respective accounts of the Depositary
Participants thereof (or such other accounts as they may direct).
(d) A Preferred Security shall not be valid until authenticated by
the manual signature of an Authorized Officer of the Property Trustee. Such
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Trust Agreement. Upon written order of the Trust signed
by one Administrative Trustee, the Property Trustee shall authenticate the
Preferred Securities for original issue. The Property Trustee may appoint an
authenticating agent that is a U.S. Person acceptable to the Trust to
authenticate the Preferred Securities. A Common Security need not be so
authenticated and shall be valid upon execution by one or more Administrative
Trustees. The form of this certificate of authentication can be found in Section
5.13.
SECTION 5.5. Rights of Holders.
The Trust Securities shall have no preemptive or similar rights and
when issued and delivered to Holders against payment of the purchase price
therefor will be fully paid and non-assessable by the Trust. Except as provided
in Section 5.11(b), the Holders of the Trust
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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.
SECTION 5.6. Book-Entry Preferred Securities.
(a) No Global Preferred Security may be exchanged, in whole or in
part, for Definitive Preferred Securities Certificates, and no transfer of a
Global Preferred Security, in whole or in part, may be, registered in the name
of any Person other than the Depositary for such Global Preferred Security or a
nominee thereof unless (i) the Depositary advises the Administrative Trustees
and the Property Trustee in writing that the Depositary is no longer willing or
able properly to discharge its responsibilities with respect to the Global
Preferred Security, and no qualified successor is appointed by the
Administrative Trustees within ninety (90) days of receipt of such notice, (ii)
the Depositary ceases to be a clearing agency registered under the Exchange Act
and the Administrative Trustees fail to appoint a qualified successor within
ninety (90) days of obtaining knowledge of such event, (iii) the Administrative
Trustees at their option advise the Property Trustee in writing that the Trust
elects to terminate the book-entry system through the Depositary or (iv) a Note
Event of Default has occurred and is continuing. Upon the occurrence of any
event specified in clause (i), (ii), (iii) or (iv) above, the Administrative
Trustees shall notify the Depositary and instruct the Depositary to notify all
Owners of Book-Entry Preferred Securities, the Delaware Trustee and the Property
Trustee of the occurrence of such event and of the availability of the
Definitive Preferred Securities Certificates to Owners of the Preferred
Securities requesting the same. Upon the issuance of Definitive Preferred
Securities Certificates, the Trustees shall recognize the Holders of the
Definitive Preferred Securities Certificates as Holders.
(b) If any Global Preferred Security is to be exchanged for
Definitive Preferred Securities Certificates or canceled in part, or if any
Definitive Preferred Securities Certificate is to be exchanged in whole or in
part for any Global Preferred Security, then either (i) such Global Preferred
Security shall be so surrendered for exchange or cancellation as provided in
this Article V or (ii) the aggregate Liquidation Amount represented by such
Global Preferred Security shall be reduced, subject to Section 5.4, or increased
by an amount equal to the Liquidation Amount represented by that portion of the
Global Preferred Security to be so exchanged or canceled, or equal to the
Liquidation Amount represented by such Definitive Preferred Securities
Certificates to be so exchanged for any Global Preferred Security, as the case
may be, by means of an appropriate adjustment made on the records of the
Securities Registrar, whereupon the Property Trustee, in accordance with the
Applicable Depositary Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender to the Administrative Trustees or the Securities
Registrar of any Global Preferred Security or Securities by the Depositary,
accompanied by registration instructions, the Administrative Trustees, or any
one of them, shall execute the Definitive Preferred Securities Certificates in
accordance with the instructions of the Depositary. None of the Securities
Registrar or the Trustees shall 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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(c) Every Definitive Preferred Securities Certificate executed and
delivered upon registration or transfer of, or in exchange for or in lieu of, a
Global Preferred Security or any portion thereof shall be executed and delivered
in the form of, and shall be, a Global Preferred Security, unless such
Definitive Preferred Securities Certificate is registered in the name of a
Person other than the Depositary for such Global Preferred Security or a nominee
thereof.
(d) The Depositary or its nominee, as registered owner of a Global
Preferred Security, shall be the Holder of such Global Preferred Security for
all purposes under this Trust Agreement and the Global Preferred Security, and
Owners with respect to a Global Preferred Security shall hold such interests
pursuant to the Applicable Depositary Procedures. The Securities Registrar and
the Trustees shall be entitled to deal with the Depositary for all purposes of
this Trust Agreement relating to the Global Preferred Securities (including the
payment of the Liquidation Amount of and Distributions on the Book-Entry
Preferred Securities represented thereby and the giving of instructions or
directions by Owners of Book-Entry Preferred Securities represented thereby and
the giving of notices) as the sole Holder of the Book-Entry Preferred Securities
represented thereby and shall have no obligations to the Owners thereof. None of
the Trustees nor the Securities Registrar shall have any liability in respect of
any transfers effected by the Depositary.
(e) The rights of the Owners of the Book-Entry Preferred
Securities shall be exercised only through the Depositary and shall be limited
to those established by law, the Applicable Depositary Procedures and agreements
between such Owners and the Depositary and/or the Depositary Participants;
provided, solely for the purpose of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided for
in this Trust Agreement, so long as Definitive Preferred Security Certificates
have not been issued pursuant to Section 5.4(a), the Trustees may conclusively
rely on, and shall be fully protected in relying on, any written instrument
(including a proxy) delivered to the Property Trustee by the Depositary setting
forth the Owners' votes or assigning the right to vote on any matter to any
other Persons either in whole or in part. Unless and until Definitive Preferred
Securities Certificates are issued pursuant to Section 5.4(a), the initial
Depositary will make book-entry transfers among the Depositary Participants and
receive and transmit payments on the Preferred Securities to such Depositary
Participants, and none of the Depositor or the Trustees shall have any
responsibility or obligation with respect thereto.
(f) To the extent that a notice or other communication to the
Holders is required under this Trust Agreement, for so long as Preferred
Securities are represented by a Global Preferred Security, the Trustees shall
give all such notices and communications to the Depositary, and shall have no
obligations to the Owners.
SECTION 5.7. Registration of Transfer and Exchange of Preferred
Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept, at the
Corporate Trust Office, a register or registers (the "Securities Register") in
which the registrar and transfer agent with respect to the Trust Securities (the
"Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates and registration of transfers
and exchanges of
26
Preferred Securities Certificates as herein provided. The Person acting as the
Property Trustee shall at all times also be the Securities Registrar. The
provisions of Article VIII shall apply to the Property Trustee in its role as
Securities Registrar.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.7(f), the Administrative Trustees or any one of them shall execute by manual
or facsimile signature and deliver to the Property Trustee, and the Property
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Preferred Securities Certificates in authorized
denominations of a like aggregate Liquidation Amount as may be required by this
Trust Agreement dated the date of execution by such Administrative Trustee or
Trustees. At the option of a Holder, Preferred Securities Certificates may be
exchanged for other Preferred Securities Certificates in authorized
denominations and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificate to be exchanged at the office or agency
maintained pursuant to Section 5.7(f). Whenever any Preferred Securities
Certificates are so surrendered for exchange, the Administrative Trustees or any
one of them shall execute by manual or facsimile signature and deliver to the
Property Trustee, and the Property Trustee shall authenticate and deliver, the
Preferred Securities Certificates that the Holder making the exchange is
entitled to receive.
(c) The Securities Registrar shall not be required, (i) to issue,
register the transfer of or exchange any Preferred Security during a period
beginning at the opening of business fifteen (15) days before the day of
selection for redemption of such Preferred Securities pursuant to Article IV and
ending at the close of business on the day of mailing of the notice of
redemption or (ii) to register the transfer of or exchange any Preferred
Security so selected for redemption in whole or in part, except, in the case of
any such Preferred Security to be redeemed in part, any portion thereof not to
be redeemed.
(d) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Securities Registrar duly executed by the Holder or such Holder's attorney duly
authorized in writing and (i) if such Preferred Securities Certificate is being
transferred otherwise than to a QIB, accompanied by a certificate of the
transferee substantially in the form set forth as Exhibit E hereto or (ii) if
such Preferred Securities Certificate is being transferred to a QIB, accompanied
by a certificate of the transferor substantially in the form set forth as
Exhibit F hereto.
(e) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the Property
Trustee on behalf of the Trust may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Preferred Securities Certificates.
(f) The Administrative Trustees shall designate an office or
offices or agency or agencies where Preferred Securities Certificates may be
surrendered for registration of transfer or exchange. The Depositor initially
designates the Corporate Trust Office as its office and agency for such
purposes. The Administrative Trustees shall give prompt written notice to the
Depositor, the Property Trustee and to the Holders of any change in the location
of any such office or agency.
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SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Securities
Certificates.
(a) If any mutilated Securities Certificate shall be surrendered
to the Securities Registrar together with such security or indemnity as may be
required by the Securities Registrar and the Administrative Trustees to save
each of them harmless, the Administrative Trustees, or any one of them, on
behalf of the Trust, shall execute and make available for delivery in exchange
therefor a new Securities Certificate of like class, tenor and denomination.
(b) If the Securities Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Securities Certificate and
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 Securities Certificate
shall have been acquired by a protected purchaser, the Administrative Trustees,
or any one of them, on behalf of the Trust, shall execute and make available for
delivery, and, with respect to Preferred Securities, the Property Trustee shall
authenticate, in exchange for or in lieu of any such destroyed, lost or stolen
Securities Certificate, a new Securities Certificate of like class, tenor and
denomination.
(c) In connection with the issuance of any new Securities
Certificate under this Section 5.8, 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.
(d) Any duplicate Securities Certificate issued pursuant to this
Section 5.8 shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Trust corresponding to that evidenced by the
mutilated, lost, stolen or destroyed Securities Certificate, as if originally
issued, whether or not the lost, stolen or destroyed Securities Certificate
shall be found at any time.
(e) If any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Depositor in its discretion
may, instead of issuing a new Security, pay such Security.
(f) The provisions of this Section 5.8 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement of mutilated, destroyed, lost or stolen Securities Certificates.
SECTION 5.9. Persons Deemed Holders.
The Trustees and the Securities Registrar shall each treat the Person
in whose name any Securities Certificate shall be registered in the Securities
Register as the owner of such Securities Certificate for the purpose of
receiving Distributions and for all other purposes whatsoever, and none of the
Trustees and the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.10. Cancellation.
All Preferred Securities Certificates surrendered for registration of
transfer or exchange or for payment shall, if surrendered to any Person other
than the Property Trustee, be delivered to
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the Property Trustee, and any such Preferred Securities Certificates and
Preferred Securities Certificates surrendered directly to the Property Trustee
for any such purpose shall be promptly canceled by it. The Administrative
Trustees may at any time deliver to the Property Trustee for cancellation any
Preferred Securities Certificates previously delivered hereunder that the
Administrative Trustees may have acquired in any manner whatsoever, and all
Preferred Securities Certificates so delivered shall be promptly canceled by the
Property Trustee. No Preferred Securities Certificates shall be executed and
delivered in lieu of or in exchange for any Preferred Securities Certificates
canceled as provided in this Section 5.10, except as expressly permitted by this
Trust Agreement. All canceled Preferred Securities Certificates shall be
disposed of by the Property Trustee in accordance with its customary practices
and the Property Trustee shall deliver to the Administrative Trustees a
certificate of such disposition.
SECTION 5.11. Ownership of Common Securities by Depositor.
(a) On the Closing Date, the Depositor shall acquire, and
thereafter shall retain, beneficial and record ownership of the Common
Securities. Neither the Depositor nor any successor Holder of the Common
Securities may transfer less than all the Common Securities, and the Depositor
or any such successor Holder may transfer the Common Securities only (i) in
connection with a consolidation or merger of the Depositor into another Person,
or any conveyance, transfer or lease by the Depositor of its properties and
assets substantially as an entirety to any Person (in which event such Common
Securities will be transferred to such surviving entity, transferee or lessee,
as the case may be), pursuant to Section 8.1 of the Indenture or (ii) to the
Depositor or an Affiliate of the Depositor, in each such case in compliance with
applicable law (including the Securities Act, and applicable state securities
and blue sky laws). To the fullest extent permitted by law, any attempted
transfer of the Common Securities other than as set forth in the immediately
preceding sentence shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating substantially "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE
WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."
(b) Any Holder of the Common Securities shall be liable for the
debts and obligations of the Trust in the manner and to the extent set forth
with respect to the Depositor and agrees that it shall be subject to all
liabilities to which the Depositor may be subject and, prior to becoming such a
Holder, shall deliver to the Administrative Trustees an instrument of assumption
satisfactory to such Trustees.
SECTION 5.12. Restricted Legends.
(a) Each Preferred Security Certificate shall bear a legend in
substantially the following form:
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS PREFERRED SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY
TRUST COMPANY ("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS
EXCHANGEABLE FOR SECURITIES
29
REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND NO
TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS
PREFERRED SECURITY 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 PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO HFC CAPITAL TRUST IV OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS 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.]
THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH
PREFERRED SECURITIES OR ANY INTEREST THEREIN, MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY PREFERRED
SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED
SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE
SECURITIES ACT.
THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE
AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH
PREFERRED SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED
ONLY (I) TO THE TRUST, (II) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III) 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 THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF AN "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, (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (V)
PURSUANT TO AN
30
EXEMPTION FROM THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF (III) OR (V), SUBJECT
TO THE RIGHT OF THE TRUST AND THE DEPOSITOR TO REQUIRE AN OPINION OF
COUNSEL AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (B) THE
HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED SECURITIES FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN
$100,000. ANY ATTEMPTED TRANSFER OF PREFERRED SECURITIES, OR ANY
INTEREST THEREIN, IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF
LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH PREFERRED
SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF PRINCIPAL OF OR INTEREST ON SUCH PREFERRED SECURITIES, OR ANY
INTEREST THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE
NO INTEREST WHATSOEVER IN SUCH PREFERRED SECURITIES.
THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS ACCEPTANCE
HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT
AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"),
OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF
ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED SECURITY OR ANY
INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS
SECURITY, OR ANY INTEREST THEREIN, IS NOT PROHIBITED BY SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THE PREFERRED SECURITIES OR ANY
INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION
4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON
BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
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ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE
SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED
TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR
WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE
FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC")."
(b) The above legend shall not be removed from any of the
Preferred Securities Certificates unless there is delivered to the Property
Trustee and the Depositor satisfactory evidence, which may include an opinion of
counsel, as may be reasonably required to ensure that any future transfers
thereof may be made without restriction under the provisions of the Securities
Act and other applicable law. Upon provision of such satisfactory evidence, one
or more of the Administrative Trustees on behalf of the Trust shall execute and
deliver to the Property Trustee, and the Property Trustee shall deliver, at the
written direction of the Administrative Trustees and the Depositor, Preferred
Securities Certificates that do not bear the legend.
SECTION 5.13. Form of Certificate of Authentication.
The Property Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
Dated: The Bank of New York, not in its individual
capacity, but solely as Property Trustee
By: _______________________________________
Authorized officer
ARTICLE VI.
MEETINGS; VOTING; ACTS OF HOLDERS
SECTION 6.1. Notice of Meetings.
Notice of all meetings of the Holders of the Preferred Securities,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.8 to each Holder of Preferred
Securities, at such Holder's registered address, at least fifteen (15) days and
not more than ninety (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.
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SECTION 6.2. Meetings of Holders of the Preferred Securities.
(a) No annual meeting of Holders is required to be held. The
Property Trustee, however, shall call a meeting of the Holders of the Preferred
Securities to vote on any matter upon the written request of the Holders of at
least twenty five percent (25%) in aggregate Liquidation Amount of the
Outstanding Preferred Securities and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of the Holders of
the Preferred Securities to vote on any matters as to which such Holders are
entitled to vote.
(b) The Holders of at least a Majority in Liquidation Amount of
the Preferred Securities, present in person or by proxy, shall constitute a
quorum at any meeting of the Holders of the Preferred Securities.
(c) If a quorum is present at a meeting, an affirmative vote by
the Holders present, in person or by proxy, holding Preferred Securities
representing at least a Majority in Liquidation Amount of the Preferred
Securities held by the Holders present, either in person or by proxy, at such
meeting shall constitute the action of the Holders of the Preferred Securities,
unless this Trust Agreement requires a lesser or greater number of affirmative
votes.
SECTION 6.3. Voting Rights.
Holders shall be entitled to one vote for each $10,000 of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.
SECTION 6.4. Proxies, Etc.
At any meeting of Holders, any Holder 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 Holders
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 Holder 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 6.5. Holder Action by Written Consent.
Any action that may be taken by Holders at a meeting may be taken
without a meeting and without prior notice if Holders holding at least a
Majority in Liquidation Amount of all Preferred Securities entitled to vote in
respect of such action (or such lesser or greater proportion thereof as shall be
required by any other provision of this Trust Agreement) shall consent to the
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action in writing; provided, that notice of such action is promptly provided to
the Holders of Preferred Securities that did not consent to such action. Any
action that may be taken by the Holders of all the Common Securities may be
taken without a meeting and without prior notice if such Holders shall consent
to the action in writing.
SECTION 6.6. Record Date for Voting and Other Purposes.
Except as provided in Section 6.10(a), for the purposes of determining
the Holders who are entitled to notice of and to vote at any meeting or to act
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 may from time to time fix a date, not more than ninety (90) days prior
to the date of any meeting of Holders or the payment of a Distribution or other
action, as the case may be, as a record date for the determination of the
identity of the Holders of record for such purposes.
SECTION 6.7. Acts of Holders.
(a) 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 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 thereof 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 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
Trust Agreement and conclusive in favor of the Trustees, if made in the manner
provided in this Section 6.7.
(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 such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's 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 that any Trustee receiving the same
deems sufficient.
(c) The ownership of Trust Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Trust Security shall bind
every future Holder of the same Trust Security and the Holder 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, the Administrative Trustees or the Trust in reliance
thereon, whether or not notation of such action is made upon such Trust
Security.
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(e) Without limiting the foregoing, a Holder 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.
(f) If any dispute shall arise among the Holders or the Trustees
with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, notice, consent, waiver or other Act of such
Holder or Trustee under this Article VI, then the determination of such matter
by the Property Trustee shall be conclusive with respect to such matter.
SECTION 6.8. Inspection of Records.
Upon reasonable written notice to the Administrative Trustees and the
Property Trustee, the records of the Trust shall be open to inspection by any
Holder during normal business hours for any purpose reasonably related to such
Holder's interest as a Holder.
SECTION 6.9. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in
the Indenture and as otherwise required by law, no Holder of Preferred
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 Securities Certificates, be construed so as to constitute the Holders
from time to time as partners or members of an association.
(b) So long as any Notes are held by the Property Trustee on
behalf of the Trust, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Note
Trustee, or exercise any trust or power conferred on the Property Trustee with
respect to the Notes, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Notes shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Notes, 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 Preferred Securities; provided, that where a consent under the Indenture
would require the consent of each holder of Notes (or each Holder of Preferred
Securities) affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Preferred
Securities. The Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Preferred Securities,
except by a subsequent vote of the Holders of the Preferred Securities. In
addition to obtaining the foregoing approvals of the Holders of the Preferred
Securities, prior to taking any of the foregoing actions, the Property Trustee
shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced
in such matters to the effect that such action shall not cause the Trust to be
taxable as a corporation or classified as other than a grantor trust for United
States federal income tax purposes.
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(c) 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
Preferred 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 Preferred 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 Preferred Securities. Notwithstanding any other provision of this
Trust Agreement, no amendment to this Trust Agreement may be made if, as a
result of such amendment, it would cause the Trust to be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes.
SECTION 6.10. Acceleration of Maturity; Rescission of Annulment;
Waivers of Past Defaults.
(a) For so long as any Preferred Securities remain Outstanding,
if, upon a Note Event of Default, the Note Trustee fails or the holders of not
less than twenty five percent (25%) in principal amount of the outstanding Notes
fail to declare the principal of all of the Notes to be immediately due and
payable, the Holders of at least twenty five percent (25%) in Liquidation Amount
of the Preferred Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Property Trustee, the Depositor and
the Note Trustee. At any time after a declaration of acceleration with respect
to the Notes has been made and before a judgment or decree for payment of the
money due has been obtained by the Note Trustee as provided in the Indenture,
the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, by written notice to the Property Trustee, the Depositor and the
Note Trustee, may rescind and annul such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Note
Trustee a sum sufficient to pay:
(A) all overdue installments of interest on all
of the Notes;
(B) any accrued Additional Interest on all of
the Notes;
(C) the principal of and any premium on any
Notes that have become due otherwise than by such declaration
of acceleration and interest and Additional Interest thereon
at the rate borne by the Notes; and
(D) all sums paid or advanced by the Note
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Note Trustee, the
Property Trustee and their agents and counsel; and
(ii) all Note Events of Default, other than the
non-payment of the principal of the Notes that has become due solely by
such acceleration, have been cured or waived as provided in Section
5.13 of the Indenture.
Upon receipt by the Property Trustee of written notice requesting such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Preferred Securities, a record
36
date shall be established for determining Holders of Outstanding Preferred
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 that is ninety (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 ninety (90)-day period,
a new written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice that has been
canceled pursuant to the proviso to the preceding sentence, in which event a new
record date shall be established pursuant to the provisions of this Section
6.10(a).
(b) For so long as any Preferred Securities remain Outstanding, to
the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Note Event of Default specified in paragraph
(a) or (b) of Section 5.1 of the Indenture, any Holder of Preferred Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Section 5.8 of the Indenture, for enforcement of payment to such
Holder of any amounts payable in respect of Notes having an aggregate principal
amount equal to the aggregate Liquidation Amount of the Preferred Securities of
such Holder. Except as set forth in Section 6.10(a) and this Section 6.10(b),
the Holders of Preferred Securities shall have no right to exercise directly any
right or remedy available to the holders of, or in respect of, the Notes.
(c) Notwithstanding paragraphs (a) and (b) of this Section 6.10,
the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any Note Event of Default, except any Note Event of Default arising from the
failure to pay any principal of or any premium or interest on (including any
Additional Interest) the Notes (unless such Note Event of Default has been cured
and a sum sufficient to pay all matured installments of interest and all
principal and premium on all Notes due otherwise than by acceleration has been
deposited with the Note Trustee) or a Note Event of Default in respect of a
covenant or provision that under the Indenture cannot be modified or amended
without the consent of the holder of each outstanding Note. Upon any such
waiver, such Note Event of Default shall cease to exist and any Note Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of the Indenture; but no such waiver shall affect any subsequent Note Event of
Default or impair any right consequent thereon.
(d) Notwithstanding paragraphs (a) and (b) of this Section 6.10,
the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such 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 Trust Agreement,
but no such waiver shall extend to any subsequent or other Event of Default or
impair any right consequent thereon.
37
(e) The Holders of a Majority in Liquidation Amount of the
Preferred Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee in
respect of this Trust Agreement or the Notes or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement; provided, that,
subject to Sections 8.5 and 8.7, the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Property Trustee in good faith shall, by an officer or officers of the
Property Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Holders not party to such direction, and provided, further, that nothing in this
Trust Agreement shall impair the right of the Property Trustee to take any
action deemed proper by the Property Trustee and which is not inconsistent with
such direction.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property Trustee and
the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Holders that:
(a) the Property Trustee is a New York banking
corporation, duly organized, validly existing and in good standing
under the laws of the State of New York;
(b) the Property Trustee 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) the Delaware Trustee is a Delaware banking
corporation, duly organized, validly existing and in good standing
under the laws of the State of Delaware;
(d) the Delaware Trustee 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;
(e) this Trust Agreement has been duly authorized,
executed and delivered by the Property Trustee and the Delaware Trustee
and constitutes the legal, valid and binding agreement of each of the
Property Trustee and the Delaware Trustee enforceable against each of
them in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
to general principles of equity;
38
(f) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other
action on the part of the Property Trustee and the Delaware Trustee and
do not require any approval of stockholders of the Property Trustee and
the Delaware Trustee and such execution, delivery and performance will
not (i) violate the Articles of Association or By-laws of the Property
Trustee or the Delaware Trustee or (ii) violate any applicable law,
governmental rule or regulation of the United States or the State of
Delaware, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee or any order,
judgment or decree applicable to the Property Trustee or the Delaware
Trustee;
(g) neither the authorization, execution or delivery by
the Property Trustee or the Delaware Trustee of this Trust Agreement
nor the consummation of any of the transactions by the Property Trustee
or the Delaware Trustee contemplated herein requires 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 law of the United States or the State of
Delaware governing the banking, trust or general powers of the Property
Trustee or the Delaware Trustee, as the case may be; and
(h) to the best of each of the Property Trustee's and the
Delaware Trustee's knowledge, there are no proceedings pending or
threatened against or affecting the Property Trustee or the Delaware
Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal that, individually or in the aggregate,
would materially and adversely affect the Trust or would question the
right, power and authority of the Property Trustee or the Delaware
Trustee, as the case may be, to enter into or perform its obligations
as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Depositor is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation;
(b) the Depositor 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 Depositor and constitutes the legal,
valid and binding agreement of the Depositor enforceable against the
Depositor in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general principles of equity;
(d) the Securities Certificates issued at 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 applicable
Trustees pursuant to the terms and provisions of, and in
39
accordance with the requirements of, this Trust Agreement and the
Holders will be, as of such date, entitled to the benefits of this
Trust Agreement;
(e) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other
action on the part of the Depositor and do not require any approval of
stockholders of the Depositor and such execution, delivery and
performance will not (i) violate the articles or certificate of
incorporation or by-laws (or other organizational documents) of the
Depositor or (ii) violate any applicable law, governmental rule or
regulation governing the Depositor or any material portion of its
property or any order, judgment or decree applicable to the Depositor
or any material portion of its property;
(f) neither the authorization, execution or delivery by
the Depositor of this Trust Agreement nor the consummation of any of
the transactions by the Depositor contemplated herein requires 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 law governing the Depositor or
any material portion of its property; and
(g) there are no proceedings pending or, to the best of
the Depositor's knowledge, threatened against or affecting the
Depositor or any material portion of its property in any court or
before any governmental authority, agency or arbitration board or
tribunal that, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and
authority of the Depositor, as the case may be, to enter into or
perform its obligations under this Trust Agreement.
ARTICLE VIII.
THE TRUSTEES
SECTION 8.1. Number of Trustees.
The number of Trustees shall be five (5), provided, that the Property
Trustee and the Delaware Trustee may be the same Person, in which case the
number of Trustees shall be four (4). The number of Trustees may be increased or
decreased by Act of the Holder of the Common Securities subject to Sections 8.2,
8.3, and 8.4. The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Trustee shall not operate
to annul, dissolve or terminate the Trust.
SECTION 8.2. Property Trustee Required.
There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. The Property Trustee shall be a corporation organized
and doing business under the laws of the United States or of any state thereof,
authorized to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million dollars ($50,000,000), subject to supervision
or examination by federal or state authority and having an office within the
United States. If any such Person publishes reports of condition at least
annually pursuant to law or to
40
the requirements of its supervising or examining authority, then for the
purposes of this Section 8.2, 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
shall cease to be eligible in accordance with the provisions of this Section
8.2, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VIII.
SECTION 8.3. Delaware Trustee Required.
(a) If required by the Delaware Statutory Trust Act, there shall
at all times be a Delaware Trustee with respect to the Trust Securities. The
Delaware Trustee 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 that has
its principal place of business in the State of Delaware, otherwise meets the
requirements of applicable Delaware law and shall act through one or more
persons authorized to bind such entity. If at any time the Delaware Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.3, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VIII.
(b) The Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the trustees of the Trust for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Delaware Statutory Trust Act and for taking such actions as are required to
be taken by a Delaware trustee under the Delaware Statutory Trust Act. The
duties (including fiduciary duties), liabilities and obligations of the Delaware
Trustee shall be limited to (a) accepting legal process served on the Trust in
the State of Delaware and (b) the execution of any certificates required to be
filed with the Secretary of State of the State of Delaware that the Delaware
Trustee is required to execute under Section 3811 of the Delaware Statutory
Trust Act and there shall be no other duties (including fiduciary duties) or
obligations, express or implied, at law or in equity, of the Delaware Trustee.
SECTION 8.4. Appointment of Administrative Trustees.
(a) 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. Each of the individuals identified as an "Administrative Trustee" in the
preamble of this Trust Agreement hereby accepts his or her appointment as such.
(b) Except where a requirement for action by a specific number of
Administrative Trustees is expressly set forth in this Trust Agreement, any act
required or permitted to be taken by, and any power of the Administrative
Trustees may be exercised by, or with the consent of, any one such
Administrative Trustee. 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 8.11, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Trust Agreement), shall have all the
41
powers granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.5. Duties and Responsibilities of the Trustees.
(a) The rights, immunities, duties and responsibilities of the
Trustees shall be as provided by this Trust Agreement and there shall be no
other duties (including fiduciary duties) or obligations, express or implied, at
law or in equity, of the Trustees; provided, however, that if an Event of
Default known to the Property Trustee has occurred and is continuing, the
Property Trustee shall, prior to the receipt of directions, if any, from the
Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, exercise such of the rights and powers vested in it by the
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require any of the Trustees 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 or their rights or
powers, if it or they 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 herein expressly so provided, 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 8.5. To the extent that, at law or in equity, a
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 Holder,
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 8.5(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Trust Agreement.
(c) No provisions of this Trust Agreement shall be construed to
relieve the Property Trustee from liability with respect to matters that are
within the authority of the Property Trustee under this Trust Agreement for its
own negligent action, negligent failure to act or willful misconduct, except
that:
(i) the Property Trustee shall not be liable for any
error or 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;
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(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 at least a Majority in
Liquidation Amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee hereunder or under the Indenture, 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 Notes 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; and 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
3.1 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
any other Trustee or the Depositor.
SECTION 8.6. Notices of Defaults and Extensions.
(a) Within ninety (90) days after the occurrence of a default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such default to the Holders, the Administrative Trustees and the
Depositor, unless such default shall have been cured or waived; provided, that,
except in the case of a default in the payment of the principal of or any
premium or interest (including any Additional Interest) on any Trust Security,
the Property Trustee shall be fully 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 Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Trust Securities. For the purpose of this Section 8.6, the term
"default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
(b) Within five (5) Business Days after the receipt of notice of
the Depositor's exercise of its right to defer the payment of interest on the
Notes pursuant to the Indenture, the Property Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.
(c) The Property Trustee shall not be deemed to have knowledge of
any Event of Default unless the Property Trustee shall have received written
notice thereof from the Depositor, any Administrative Trustee or any Holder or
unless an officer of the Property Trustee
43
charged with the administration of this Trust Agreement shall have obtained
actual knowledge of such Event of Default.
(d) The Property Trustee shall notify all Holders of the Preferred
Securities of any notice of default received with respect to the Notes.
SECTION 8.7. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.5:
(a) the Property Trustee may conclusively rely and shall
be protected in acting or refraining from acting in good faith and in
accordance with the terms hereof upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed 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, (ii) in construing any of the provisions
of this Trust Agreement the Property Trustee finds a provision
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 Holders of the Preferred Securities are entitled to vote
under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting the Depositor's written
instruction as to the course of action to be taken and 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, that if the Property
Trustee does not receive such instructions of the Depositor within ten
(10) Business Days after it has delivered such notice or such
reasonably shorter period of time set forth in such notice, the
Property Trustee may, but shall be under no duty to, take such action,
or refrain from taking such action, as the Property Trustee shall deem
advisable and in the best interests of the Holders, in which event the
Property Trustee shall have no liability except for its own negligence,
bad faith or willful misconduct;
(c) any direction or act of the Depositor contemplated by
this Trust Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise expressly provided herein;
(d) any direction or act of an Administrative Trustee
contemplated by this Trust Agreement shall be sufficiently evidenced by
a certificate executed by such Administrative Trustee and setting forth
such direction or act;
(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 re-recording, re-filing or re-registration
thereof;
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(f) the Property Trustee may consult with counsel (which
counsel may be counsel to the Property Trustee, the Depositor or any of
its Affiliates, and may include any of its employees) and the advice of
such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon and in accordance with such advice;
the 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 Holders pursuant to
this Trust Agreement, unless such Holders shall have offered to the
Property Trustee reasonable security or indemnity against the costs,
expenses (including reasonable attorneys' fees and expenses) and
liabilities that might be incurred by it in compliance with such
request or direction, including reasonable advances as may be requested
by the Property Trustee;
(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,
direction, consent, order, approval, bond, debenture, note or other
evidence of indebtedness or other paper or document, unless requested
in writing to do so by one or more Holders, but the Property Trustee
may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Property Trustee shall determine
to make such inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Depositor, personally or by
agent or attorney;
(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, attorneys, custodians or nominees and the
Property Trustee shall not be responsible for any negligence or
misconduct on the part of any such agent, attorney, custodian or
nominee 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 hereunder,
the Property Trustee (i) may request instructions from the Holders
(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 this Trust Agreement 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;
(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;
(l) without prejudice to any other rights available to
the Property Trustee under applicable law, when the Property Trustee
incurs expenses or renders services in
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connection with a Bankruptcy Event, such expenses (including legal fees
and expenses of its agents and counsel) and the compensation for such
services are intended to constitute expenses of administration under
any bankruptcy law or law relating to creditors rights generally; and
(m) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence be herein
specifically prescribed) may, in the absence or bad faith on its part,
request and rely on an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on any 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 such Person 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.
SECTION 8.8. Delegation of Power.
Any Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 its, his or her power
for the purpose of executing any documents contemplated in Section 2.5. The
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 Trustees or
otherwise as the Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of this Trust
Agreement.
SECTION 8.9. May Hold Securities.
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 except as provided in the definition of the term "Outstanding" in
Article I, may otherwise deal with the Trust with the same rights it would have
if it were not an Trustee or such other agent.
SECTION 8.10. Compensation; Reimbursement; Indemnity.
The Depositor agrees:
(a) to pay to the Trustees from time to time such
reasonable compensation for all services rendered by them hereunder as
may be agreed by the Depositor and the Trustees from time to time
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) to reimburse the Trustees upon request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustees in accordance with any provision of this Trust Agreement
(including the reasonable compensation and the expenses and
disbursements of their agents and counsel), except any such expense,
46
disbursement or advance as may be attributable to their gross
negligence, bad faith or willful misconduct; and
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any
Trustee, (iii) any officer, director, shareholder, employee,
representative or agent of any Trustee or any Affiliate of any Trustee
and (iv) any employee or agent of the Trust (referred to herein as an
"Indemnified Person") from and against any loss, damage, liability, tax
(other than income, franchise or other taxes imposed on amounts paid
pursuant to Section 8.10(a) or (b) hereof), penalty, expense or claim
of any kind or nature whatsoever incurred without negligence, bad faith
or willful misconduct on its part, arising out of or in connection with
the acceptance or administration of the Trust hereunder, including the
advancement of funds to cover the reasonable 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 Trust shall have no payment, reimbursement or indemnity obligations
to the Trustees under this Section 8.10. The provisions of this Section 8.10
shall survive the termination of this Trust Agreement and the earlier removal or
resignation of any Trustee.
No Trustee may claim any Lien on any Trust Property whether before or
after termination of the Trust as a result of any amount due pursuant to this
Section 8.10.
In no event shall the Property Trustee and the Delaware Trustee be
liable for any indirect, special, punitive or consequential loss or damage of
any kind whatsoever, including, but not limited to, lost profits, even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
In no event shall the Property Trustee and the Delaware Trustee be
liable for any failure or delay in the performance of its obligations hereunder
because of circumstances beyond its control, including, but not limited to, acts
of God, flood, war (whether declared or undeclared), terrorism, fire, riot,
embargo, government action, including any laws, ordinances, regulations,
governmental action or the like which delay, restrict or prohibit the providing
of the services contemplated by this Trust Agreement.
SECTION 8.11. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of any Trustee and no appointment of
a successor Trustee pursuant to this Article VIII shall become effective until
the acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 8.12.
(b) A Trustee may resign at any time by giving written notice
thereof to the Depositor and, in the case of the Property Trustee and the
Delaware Trustee, to the Holders.
(c) Unless an Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed (with or without cause) at any time by Act of the Holder of Common
Securities. If an Event of Default shall have occurred and be continuing, the
Property Trustee or the Delaware Trustee, or both of them, may be removed
47
(with or without cause) at such time by Act of the Holders of at least a
Majority in Liquidation Amount of the Preferred Securities, delivered to the
removed Trustee (in its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed (with or without cause) only by Act of the
Holder of the Common Securities at any time.
(d) If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any reason, at a time when no Event of Default shall have occurred and be
continuing, the Holder of the Common Securities, by Act of the Holder of the
Common Securities, shall promptly appoint a successor Trustee or Trustees, and
such successor Trustee and the retiring Trustee shall comply with the applicable
requirements of Section 8.12. If the Property Trustee or the Delaware Trustee
shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when an
Event of Default shall have occurred and be continuing, the Holders of the
Preferred Securities, by Act of the Holders of a Majority in Liquidation Amount
of the Preferred Securities, shall promptly appoint a successor Property Trustee
or Delaware Trustee, and such successor Property Trustee or Delaware Trustee and
the retiring Property Trustee or Delaware Trustee shall comply with the
applicable requirements of Section 8.12. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when an Event of Default shall have occurred and be continuing, the Holder
of the Common Securities by Act of the Holder of Common Securities shall
promptly appoint a successor Administrative Trustee and such successor
Administrative Trustee and the retiring Administrative Trustee shall comply with
the applicable requirements of Section 8.12. If no successor Trustee shall have
been so appointed by the Holder of the Common Securities or Holders of the
Preferred Securities, as the case may be, and accepted appointment in the manner
required by Section 8.12 within thirty (30) days after the giving of a notice of
resignation by a Trustee, the removal of a Trustee, or a Trustee becoming
incapable of acting as such Trustee, any Holder who has been a Holder of
Preferred Securities for at least six (6) months may, on behalf of himself and
all others similarly situated, and any resigning Trustee may, in each case, at
the expense of the Depositor, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(e) The Depositor shall give notice of each resignation and each
removal of the Property Trustee or the Delaware Trustee and each appointment of
a successor Property Trustee or Delaware Trustee to all Holders in the manner
provided in Section 10.8. Each notice shall include the name of the successor
Property Trustee or Delaware Trustee and the address of its Corporate Trust
Office if it is the Property Trustee.
(f) Notwithstanding the foregoing or any other provision of this
Trust Agreement, in the event any Administrative Trustee or a Delaware Trustee
who is a natural person dies or becomes, in the opinion of the Holder of Common
Securities, incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by (i) the unanimous act of the
remaining Administrative Trustees if there are at least two of them or (ii)
otherwise by the Holder of the Common Securities (with the successor in each
case being a Person who satisfies the eligibility requirement for Administrative
Trustees or Delaware Trustee, as the case may be, set forth in Sections 8.3 and
8.4).
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(g) Upon the appointment of a successor Delaware Trustee, such
successor Delaware Trustee shall file a Certificate of Amendment to the
Certificate of Trust in accordance with Section 3810 of the Delaware Statutory
Trust Act.
SECTION 8.12. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee,
each successor Trustee shall execute and deliver to the Depositor and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective 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 Trust or any successor Trustee such retiring
Trustee shall, upon payment of its charges, duly assign, transfer and deliver to
such successor Trustee all Trust Property, all proceeds thereof and money held
by such retiring Trustee hereunder with respect to the Trust Securities and the
Trust.
(b) Upon request of any such successor Trustee, the Trust (or the
retiring Trustee if requested by the Depositor) 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 the
preceding paragraph.
(c) 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 VIII.
SECTION 8.13. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided, that such Person shall be
otherwise qualified and eligible under this Article VIII.
SECTION 8.14. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the 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 make no
representations as to the title to, or value or condition of, the property of
the Trust or any part thereof, nor as to the validity or sufficiency of this
Trust Agreement, the Notes or the Trust Securities. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of the
Notes.
SECTION 8.15. Property Trustee May File Proofs of Claim.
(a) In case of any Bankruptcy Event (or event that with the
passage of time would become a Bankruptcy Event) 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
49
(irrespective of whether any Distributions on the Trust Securities shall then be
due and payable 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:
(i) 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
(ii) 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 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 first 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.
(b) 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 8.16. Reports to and from the Property Trustee.
(a) The Depositor and the Administrative Trustees shall deliver to
the Property Trustee, not later than forty five (45) days after the end of each
of the first three fiscal quarters of the Depositor and not later than ninety
(90) days after the end of each fiscal year of the Trust ending after the date
of this Trust Agreement, an Officers' Certificate covering the preceding fiscal
period, stating whether or not to the knowledge of the signers thereof the
Depositor and the Trust are in default in the performance or observance of any
of the terms, provisions and conditions of this Trust Agreement (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Depositor or the Trust shall be in default, specifying all such defaults and the
nature and status thereof of which they have knowledge.
(b) The Property Trustee shall obtain all reports, certificate and
information, which it is entitled to obtain under each of the Operative
Documents, and deliver to the Holders all such reports, certificate or
information promptly upon receipt thereof.
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ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically dissolve on
November 15, 2037 (the "Expiration Date"), and the Trust Property shall be
liquidated in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event", upon the occurrence of which the Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of,
or the dissolution or liquidation of, the Depositor, in its capacity as
the Holder of the Common Securities, unless the Depositor shall have
transferred the Common Securities as provided by Section 5.11, in which
case this provision shall refer instead to any such successor Holder of
the Common Securities;
(b) the written direction to the Property Trustee from
the Holder of the Common Securities at any time to dissolve the Trust
and, after satisfaction of any liabilities of the Trust as required by
applicable law, to distribute the Notes to Holders in exchange for the
Preferred Securities (which direction is optional and wholly within the
discretion of the Holder of the Common Securities), provided, that the
Holder of the Common Securities shall have received the prior approval
of the Office of Thrift Supervision if then required;
(c) the redemption of all of the Preferred Securities in
connection with the payment at maturity or redemption of all the Notes;
and
(d) the entry of an order for dissolution of the Trust by
a court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust shall terminate upon the latest to occur of the following: (a) the
distribution by the Property Trustee to Holders of all amounts required to be
distributed hereunder upon the liquidation of the Trust pursuant to Section 9.4,
or upon the redemption of all of the Trust Securities pursuant to Section 4.2;
(b) the satisfaction of any expenses owed by the Trust; and (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
Holders.
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SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in Section 9.2(a), (b)
or (d) occurs or upon the Expiration Date, the Trust shall be liquidated by the
Property Trustee as expeditiously as the Property Trustee shall determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, to each Holder a Like Amount of Notes,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee not less than thirty (30) nor more than sixty (60) days prior to the
Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Securities Register. All such 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
(subject to Section 9.4(d)) any Securities Certificates not surrendered
for exchange will be deemed to represent a Like Amount of Notes; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Securities Certificates for
Notes, or if Section 9.4(d) applies, receive a Liquidation
Distribution, as the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Trust and distribution of the Notes to Holders,
the Property Trustee, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish a record date for such
distribution (which shall not be more than forty five (45) days prior to the
Liquidation Date nor prior to the date on which notice of such liquidation is
given to the Holders) and establish such procedures as it shall deem appropriate
to effect the distribution of Notes in exchange for the Outstanding Securities
Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Notes will be
issued to Holders of Securities Certificates, upon surrender of such
Certificates to the exchange agent for exchange, (iii) the Depositor shall use
its best efforts to have the Notes listed on the New York Stock Exchange or on
such other exchange, interdealer quotation system or self-regulatory
organization on which the Preferred Securities are then listed, if any, (iv)
Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Notes bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on such Securities
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 Securities Certificates with respect to such Notes) and (v)
all rights of Holders holding Trust Securities will cease, except the right of
such Holders to receive Notes upon surrender of Securities Certificates.
(d) Notwithstanding the other provisions of this Section 9.4, if
distribution of the Notes in the manner provided herein is determined by the
Property Trustee not to be permitted or practical, the Trust Property shall be
liquidated, and the Trust shall be wound up by the Property
52
Trustee in such manner as the Property Trustee determines. In such event,
Holders will be entitled to receive out of the assets of the Trust available for
distribution to Holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, 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
winding up 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 winding up pro rata (based
upon Liquidation Amounts) with Holders of all Trust Securities, except that, if
an Event of Default has occurred and is continuing, the Preferred Securities
shall have a priority over the Common Securities as provided in Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person except pursuant to this Article IX.
At the request of the Holders of the Common Securities, without the consent of
the Holders of the Preferred Securities, the Trust may merge with or into,
consolidate, amalgamate, 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 under this Trust Agreement with
respect to the Preferred Securities or (ii) substitutes for the
Preferred Securities other securities having substantially the same
terms as the Preferred Securities (such other Securities, the
"Successor Securities") so long as the Successor Securities have the
same priority as the Preferred Securities with respect to distributions
and payments upon liquidation, redemption and otherwise;
(b) a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee is
appointed to hold the Notes;
(c) if the Preferred Securities or the Notes are rated,
such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Preferred Securities or the Notes
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization that then assigns a rating
to the Preferred Securities or the Notes;
(d) the Preferred Securities are listed, or any Successor
Securities will be listed upon notice of issuance, on any national
securities exchange or interdealer quotation system on which the
Preferred Securities are then listed, if any;
(e) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the
53
Holders of the Preferred 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 has received
an Opinion of Counsel 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 Preferred Securities (including any Successor
Securities) in any material respect; (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 (iii) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust (or the successor
entity) will continue to be classified as a grantor trust for U.S.
federal income tax purposes; and
(h) the Depositor or its permitted transferee 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 Agreement.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of all of the Preferred 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 Person or permit any other
entity to consolidate, amalgamate, merge with or into, or replace, the Trust if
such consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the successor entity to be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes or cause the Notes to be treated as other than
indebtedness of the Depositor for United States federal income tax purposes.
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the death, bankruptcy, termination,
dissolution or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor annul, dissolve or terminate the Trust nor entitle the legal
representatives or heirs of such Person or any Holder 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.
54
SECTION 10.2. Agreed Tax Treatment of Trust and Trust Securities.
The parties hereto and, by its acceptance or acquisition of a Trust
Security or a beneficial interest therein, the Holder of, and any Person that
acquires a beneficial interest in, such Trust Security intend and agree to treat
the Trust as a grantor trust for United States federal, state and local tax
purposes, and to treat the Trust Securities (including all payments and proceeds
with respect to such Trust Securities) as undivided beneficial ownership
interests in the Trust Property (and payments and proceeds therefrom,
respectively) for United States federal, state and local tax purposes. The
provisions of this Trust Agreement shall be interpreted to further this
intention and agreement of the parties.
SECTION 10.3. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, the Administrative Trustees and the Holder of all the Common
Securities, without the consent of any Holder of the Preferred Securities, (i)
to cure any ambiguity, correct or supplement any provision herein that 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 Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement, (ii) 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 neither be taxable as a corporation nor be classified as other than a
grantor trust for United States federal income tax purposes at all times that
any Trust Securities are Outstanding or to ensure that the Notes are treated as
indebtedness of the Depositor for United States federal income tax purposes, or
to ensure that the Trust will not be required to register as an "investment
company" under the Investment Company Act or (iii) to add to the covenants,
restrictions or obligations of the Depositor; provided, that in the case of
clauses (i), (ii) or (iii), such action shall not adversely affect in any
material respect the interests of any Holder.
(b) Except as provided in Section 10.3(c), any provision of this
Trust Agreement may be amended by the Property Trustee, the Administrative
Trustees and the Holder of all of the Common Securities and with (i) the consent
of Holders of at least a Majority in Liquidation Amount of the Preferred
Securities and (ii) 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 cause the Trust to be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes or affect the treatment of the Notes as indebtedness
of the Depositor for United States federal income tax purposes or affect the
Trust's exemption from status (or from any requirement to register) as an
"investment company" under the Investment Company Act.
(c) Notwithstanding any other provision of this Trust Agreement,
without the consent of each Holder, this Trust Agreement may not be amended to
(i) change the accrual rate, amount, currency or timing of any Distribution on
or the redemption price of the Trust Securities or otherwise adversely affect
the amount of any Distribution or other payment required to be made in respect
of the Trust Securities as of a specified date, (ii) restrict or impair the
right of a Holder to institute suit for the enforcement of any such payment on
or after such date, (iii) reduce the percentage of aggregate Liquidation Amount
of Outstanding Preferred Securities, the consent of
55
whose Holders is required for any such amendment, or the consent of whose
Holders is required for any waiver of compliance with any provision of this
Trust Agreement or of defaults hereunder and their consequences provided for in
this Trust Agreement; (iv) impair or adversely affect the rights and interests
of the Holders in the Trust Property, or permit the creation of any Lien on any
portion of the Trust Property; or (v) modify the definition of "Outstanding,"
this Section 10.3(c), Sections 4.1, 4.2, 4.3, 6.10(e) or Article IX.
(d) Notwithstanding any other provision of this Trust Agreement,
no Trustee shall enter into or consent to any amendment to this Trust Agreement
that would cause the Trust to be taxable as a corporation or to be classified as
other than a grantor trust for United States federal income tax purposes or that
would cause the Notes to fail or cease to be treated as indebtedness of the
Depositor for United States federal income tax purposes or that would cause the
Trust to fail or cease to qualify for the exemption from status (or from any
requirement to register) as an "investment company" under the Investment Company
Act.
(e) If any amendment to this Trust Agreement is made, the
Administrative Trustees or the Property Trustee shall promptly provide to the
Depositor a copy of such amendment.
(f) No Trustee shall be required to enter into any amendment to
this Trust Agreement that affects its own rights, duties or immunities under
this Trust Agreement. The Trustees 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 and all conditions
precedent herein provided for relating to such action have been met.
(g) No amendment or modification to this Trust Agreement that
adversely affects in any material respect the rights, duties, liabilities,
indemnities or immunities of the Delaware Trustee hereunder shall be permitted
without the prior written consent of the Delaware Trustee.
SECTION 10.4. Separability.
If any provision in this Trust Agreement or in the 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, and there shall be deemed substituted for the provision at
issue a valid, legal and enforceable provision as similar as possible to the
provision at issue.
SECTION 10.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE TRUST, THE DEPOSITOR AND THE TRUSTEES WITH RESPECT TO THIS TRUST
AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REFERENCE TO ITS
CONFLICTS OF LAWS PROVISIONS.
56
SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust and any Trustee, including
any successor by operation of law. Except in connection with a transaction
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 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
(a) Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing
delivered in person, or by reputable, overnight courier, by telecopy or by
deposit thereof, first-class postage prepaid, in the United States mail,
addressed, (a) in the case of a Holder of Preferred Securities, to such Holder
as such Holder's name and address may appear on the Securities Register; and (b)
in the case of the Holder of all the Common Securities or the Depositor, to
Hawthorne Financial Corporation, 2381 Rosecrans Avenue, El Segundo, California
90245, Attention: Eileen Lyon, or to such other address as may be specified in a
written notice by the Holder of all the Common Securities or the Depositor, as
the case may be, to the Property Trustee. Such report, notice, demand or other
communication to or upon a Holder or the Depositor shall be deemed to have been
given when received in person, within one (1) Business Day following delivery by
overnight courier, when telecopied with receipt confirmed, or within three (3)
Business Days following delivery by mail, 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.
(b) Any notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon the Property Trustee, the Delaware Trustee, the Administrative
Trustees or the Trust shall be given in writing by deposit thereof, first-class
postage prepaid, in the U.S. mail, personal delivery or facsimile transmission,
addressed to such Person as follows: (a) with respect to the Property Trustee to
The Bank of New York, 101 Barclay Street, New York, New York 10286, Attention:
Corporate Trust Administration, facsimile no. (212) 815-5707; (b) with respect
to the Delaware Trustee, to The Bank of New York (Delaware), White Clay Center
Route 273, Newark, Delaware 19711, Attention: Corporate Trust Administration,
facsimile no.: (302) 283-8279; (c) with respect to the Administrative Trustees,
to them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of HFC Capital Trust IV", and (d) with respect to the
Trust, to its principal executive office specified in Section 2.2, with a copy
to the Property Trustee. Such notice, demand or other communication to or upon
the Trust, the Property Trustee or the Administrative Trustees shall be deemed
to have been sufficiently given or made only upon actual receipt of the writing
by the Trust, the Property Trustee or the Administrative Trustees.
57
SECTION 10.9. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Holders 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 Law or otherwise
join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. If the Depositor takes action in violation of this Section 10.9,
the Property Trustee agrees, for the benefit of Holders, that at the expense of
the Depositor, it shall file an answer with the applicable 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 estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Property Trustee or the Trust may assert.
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.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
58
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
[COMPANY],
as Depositor
By: _______________________________
Name:
Title:
THE BANK OF NEW YORK, as THE BANK OF NEW YORK (DELAWARE), as
Property Trustee Delaware Trustee
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
___________________________________ _____________________________
Administrative Trustee Administrative Trustee
Name: Name:
___________________________________
Administrative Trustee
Name:
Exhibit A
CERTIFICATE OF TRUST
OF
HFC CAPITAL TRUST IV
This Certificate of Trust of HFC Capital Trust IV (the
"Trust"), dated October 28, 2002, is being duly executed and filed on behalf of
the Trust by the undersigned, as trustees, to form a statutory trust under the
Delaware Statutory Trust Act (12 Del. C. Section 3801 et seq.) (the "Act").
1. Name. The name of the statutory trust formed by this
Certificate of Trust is: HFC Capital Trust IV.
2. Delaware Trustee. The name and business address of
the trustee of the Trust with its principal place of business in the State of
Delaware are The Bank of New York (Delaware), White Clay Center, Route 273,
Newark, Delaware 19711, Attention: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be
effective upon its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned have duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
THE BANK OF NEW YORK, not in its individual
capacity, butsolely as Property Trustee
By: _______________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE), not in its
individual capacity, but solely as Delaware
Trustee
By: _______________________________________
Name:
Title:
A-1
Exhibit B
[FORM OF COMMON SECURITIES CERTIFICATE]
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT
TO AN EXEMPTION FROM REGISTRATION. THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT
IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT
CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES
C-
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
HFC CAPITAL TRUST IV
FLOATING RATE COMMON SECURITIES
(LIQUIDATION AMOUNT $1,000 PER COMMON SECURITY)
HFC Capital Trust IV, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ________________________
(the "Holder") is the registered owner of ____________common securities of the
Trust representing undivided common beneficial interests in the assets of the
Trust and designated the HFC Capital Trust IV Floating Rate Common Securities
(liquidation amount $1,000 per Common Security) (the "Common Securities").
Except in accordance with Section 5.11 of the Trust Agreement (as defined
below), the Common Securities are not transferable and, to the fullest extent
permitted by law, 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 November 1, 2002
as the same may be amended from time to time (the "Trust Agreement"), among
Hawthorne Financial Corporation, as Depositor, The Bank of New York, as Property
Trustee, The Bank of New York (Delaware), as Delaware Trustee, the
Administrative Trustees named therein and the Holders, from time to time, of
Trust Securities. 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.
B-1
This Common Securities Certificate shall be governed by and construed
in accordance with the laws of the State of Delaware.
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 on behalf of the Trust this certificate this __ day of
_________________.
HFC CAPITAL TRUST IV
By: _________________________
Name:
Administrative Trustee
B-2
Exhibit C
[FORM OF PREFERRED SECURITIES CERTIFICATE]
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS PREFERRED SECURITY
IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
("DTC") OR A NOMINEE OF DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR
PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT, AND
NO TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY 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 PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO HFC CAPITAL TRUST IV OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS 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.]
THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SUCH PREFERRED SECURITIES OR
ANY INTEREST THEREIN MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF ANY PREFERRED SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF THE
PREFERRED SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE
AGREES FOR THE BENEFIT OF THE TRUST AND THE DEPOSITOR THAT (A) SUCH PREFERRED
SECURITIES MAY BE OFFERED, RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE
TRUST, (II) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) 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 THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR
C-1
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (V) PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND, IN THE CASE OF (III) OR
(V), SUBJECT TO THE RIGHT OF THE TRUST AND THE DEPOSITOR TO REQUIRE AN OPINION
OF COUNSEL AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (B) THE HOLDER
WILL NOTIFY ANY PURCHASER OF ANY PREFERRED SECURITIES FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. ANY
ATTEMPTED TRANSFER OF PREFERRED SECURITIES OR ANY INTEREST THEREIN IN A BLOCK
HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND MULTIPLES OF
$1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF SUCH PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH PREFERRED SECURITIES OR ANY INTEREST
THEREIN, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH PREFERRED SECURITIES.
THE HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN BY ITS ACCEPTANCE
HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN
EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS PREFERRED
SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY OR ANY
INTEREST THEREIN IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF
THE PREFERRED SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE WILL NOT RESULT
C-2
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC").
C-3
CERTIFICATE NUMBER NUMBER OF PREFERRED SECURITIES
CUSIP NO.
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
HFC CAPITAL TRUST IV
FLOATING RATE PREFERRED SECURITIES
(LIQUIDATION AMOUNT $1,000 PER PREFERRED SECURITY)
HFC Capital Trust IV, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that _____________, a
_________ (the "Holder") is the registered owner of ___________ Preferred
Securities of the Trust representing an undivided preferred beneficial interest
in the assets of the Trust and designated the HFC Capital Trust IV Floating Rate
Preferred Securities (liquidation amount $1,000 per Preferred Security) (the
"Preferred Securities"). The Preferred 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 5.7 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred 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 November 1, 2002, as the same may be
amended from time to time (the "Trust Agreement"), among Hawthorne Financial
Corporation, as Depositor, The Bank of New York, as Property Trustee, The Bank
of New York (Delaware), as Delaware Trustee, the Administrative Trustees named
therein and the Holders, from time to time, of Trust Securities. The Holder is
entitled to the benefits of the Guarantee Agreement entered into by Hawthorne
Financial Corporation, a Delaware corporation, and The Bank of New York, as
Guarantee Trustee, dated as of November 1, 2002, as the same may be amended from
time to time (the "Guarantee Agreement"), to the extent provided therein. The
Trust will furnish a copy of each of the Trust Agreement and the Guarantee
Agreement to the Holder without charge upon written request to the Property
Trustee 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.
This Preferred Securities Certificate shall be governed by and
construed in accordance with the laws of the State of Delaware.
C-4
All capitalized terms used but not defined in this Preferred Securities
Certificate are used with the meanings specified in the Trust Agreement,
including the Schedules and Exhibits thereto.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed on behalf of the Trust this certificate this __ day of __________,
____.
HFC CAPITAL TRUST IV
By: ___________________________
Name:
Administrative Trustee
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
Dated:
The Bank of New York, not in its individual
capacity, but solely as Property Trustee
By: _______________________________
Authorized officer
C-5
[FORM OF REVERSE OF SECURITY]
The Trust promises to pay Distributions from November 1, 2002, or from
the most recent Distribution Date to which Distributions have been paid or duly
provided for, semi-annually (subject to deferral as set forth herein) in arrears
on May 15th and November 15th of each year, commencing on May 15, 2003, at a
variable rate per annum equal to LIBOR plus 3.35% of the Liquidation Amount of
the Preferred Securities represented by this Preferred Securities Certificate,
provided, that, the applicable Distribution rate shall not exceed 12.0% through
the Distribution Date in November, 2007, together with any Additional Interest
Amounts, in respect to such period.
Distributions on the Trust Securities shall be made by the Paying Agent
from the Payment Account and shall be payable on each Distribution Date only to
the extent that the Trust has funds then on hand and available in the Payment
Account for the payment of such Distributions.
In the event (and to the extent) that the Depositor exercises its right
under the Indenture to defer the payment of interest on the Notes, Distributions
on the Preferred Securities shall be deferred.
Under the Indenture, so long as no Note Event of Default has occurred
and is continuing, the Depositor shall have the right, at any time and from time
to time during the term of the Notes, to defer the payment of interest on the
Notes for a period of up to ten (10) consecutive semi-annual interest payment
periods (each such extended interest payment period, an "Extension Period"),
during which Extension Period no interest shall be due and payable (except any
Additional Tax Sums that may be due and payable). No interest on the Notes 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
payment of such interest would be legally enforceable) at the rate equal to
LIBOR plus 3.35% per annum (provided, that, the applicable interest rate shall
not exceed 12.0% through the Interest Payment Date in November, 2007),
compounded semiannually, from the dates on which amounts would have otherwise
been due and payable until paid or until funds for the payment thereof have been
made available for payment. If Distributions are deferred, the deferred
Distributions (including Additional Interest Amounts) shall be paid on the date
that the related Extension Period terminates to Holders (as defined in the Trust
Agreement) of the Trust Securities as they appear on the books and records of
the Trust on the record date immediately preceding such termination date.
Distributions on the Securities must be paid on the dates payable
(after giving effect to any Extension Period) to the extent that the Trust has
funds available for the payment of such Distributions in the Payment Account of
the Trust. The Trust's funds available for Distribution to the Holders of the
Preferred Securities will be limited to payments received from the Depositor.
The payment of Distributions out of moneys held by the Trust is guaranteed by
the Depositor pursuant to the Guarantee Agreement.
During any such Extension Period, the Depositor shall not (i) declare
or pay any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with
C-6
respect to, any of the Depositor's capital stock or (ii) make any payment of
principal of or any interest or premium on or repay, repurchase or redeem any
debt securities of the Depositor that rank pari passu in all respects with or
junior in interest to the Notes (other than (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Depositor in connection
with (1) any employment contract, benefit plan or other similar arrangement with
or for the benefit of any one or more employees, officers, directors or
consultants, (2) a dividend reinvestment or stockholder stock purchase plan or
(3) the issuance of capital stock of the Depositor (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Depositor's
capital stock (or any capital stock of a Subsidiary (as defined in the
Indenture) of the Depositor) for any class or series of the Depositor's capital
stock or of any class or series of the Depositor's indebtedness for any class or
series of the Depositor's capital stock, (c) the purchase of fractional
interests in shares of the Depositor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any Rights Plan
(as defined in the Indenture), the issuance of rights, stock or other property
under any Rights Plan, or the redemption or repurchase of rights pursuant
thereto or (e) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock).
On each Note Redemption Date, on the stated maturity (or any date of
principal repayment upon early maturity) of the Notes and on each other date on
(or in respect of) which any principal on the Notes is repaid, the Trust will be
required to redeem a Like Amount of Trust Securities at the Redemption Price.
Under the Indenture, the Notes may be redeemed by the Depositor on any Interest
Payment Date, at the Depositor's option, on or after November 15, 2007 in whole
or in part from time to time at a redemption price equal to one hundred percent
(100%) of the principal amount thereof or the redeemed portion thereof, as
applicable, together, in the case of any such redemption, with accrued interest,
including any Additional Interest, to but excluding the date fixed for
redemption; provided, that the Depositor shall have received the prior approval
of the Office of Thrift Supervision if then required. The Notes may also be
redeemed by the Depositor, at its option, at any time, in whole but not in part,
upon the occurrence of a Capital Disqualification Event, an Investment Company
Event or a Tax Event at the Indenture Redemption Price.
The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption or
payment at maturity of Notes. Redemptions of the Trust Securities (or portion
thereof) shall be made and the Redemption Price shall be payable on each
Redemption Date only to the extent that the Trust has funds then on hand and
available in the Payment Account for the payment of such Redemption Price.
Payments of Distributions (including any Additional Interest Amounts),
the Redemption Price, Liquidation Amount or any other amounts in respect of the
Preferred Securities shall be made by wire transfer at such place and to such
account at a banking institution in the United States as may be designated in
writing at least ten (10) Business Days prior to the date for payment by the
Person entitled thereto unless proper written transfer instructions have not
been
C-7
received by the relevant record date, in which case such payments shall be made
by check mailed to the address of such Person as such address shall appear in
the Security Register. If any Preferred Securities are held by a Depositary,
such Distributions shall be made to the Depositary in immediately available
funds.
The indebtedness evidenced by the Notes 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 (as defined in the Indenture), and this Security is
issued subject to the provisions of the Indenture with respect thereto.
C-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Securities Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Securities 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
Preferred Securities Certificate)
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.
C-9
Exhibit D
JUNIOR SUBORDINATED INDENTURE
D-1
Exhibit E
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY TRANSFEREES OTHER THAN QIBS
__________, [ ]
Hawthorne Financial Corporation
HFC Capital Trust IV
2381 Rosecrans Avenue
Elsegundo, California 90245
Re: Purchase of $1,000 stated liquidation amount of
Floating Rate Preferred Securities (the "Preferred
Securities") of HFC Capital Trust IV
Ladies and Gentlemen:
In connection with our purchase of the Preferred Securities we
confirm that:
1. We understand that the Floating Rate Preferred
Securities (the "Preferred Securities") of HFC Capital Trust IV (the "Trust")
(including the guarantee (the "Guarantee") of Hawthorne Financial Corporation a
(the "Company") executed in connection therewith) and the Floating Rate Junior
Subordinated Notes due 2032 of the Company (the "Subordinated Notes") (the
Preferred Securities, the Guarantee and the Subordinated Notes together being
referred to herein as the "Offered Securities"), have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered or sold except as permitted in the following sentence. We agree on our
own behalf and on behalf of any investor account for which we are purchasing the
Offered Securities that, if we decide to offer, sell or otherwise transfer any
such Offered Securities, (i) such offer, sale or transfer will be made only (a)
to the Trust, (b) to a person we reasonably believe is a "qualified
institutional buyer" (a "QIB") (as defined in Rule 144 under the Securities Act)
in a transaction meeting the requirements of Rule 144A, (c) 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 Offered Securities
for its own account, or for the account of such an "accredited investor," for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act, (d) pursuant
to an effective registration statement under the Securities Act, or (e) pursuant
to an exemption from the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction and, in the case of (c) or (e), subject to the right of
the Trust and the depositor to require an opinion of counsel and other
information satisfactory to each of them. The foregoing restrictions on resale
will not apply subsequent to the date on which, in the written opinion of
counsel, the Preferred Securities are not "restricted securities" within the
meaning of Rule 144 under the Securities Act. If any resale or other transfer of
the Offered Securities is proposed to be made pursuant to clause (c) or (d)
above, the transferor shall deliver a letter from the transferee substantially
in the form of this letter to the Property Trustee as Transfer Agent, which
shall provide as applicable, among other things, that the transferee is an
"accredited investor" within the meaning of subparagraph (a) (1), (2), (3) or
(7) of Rule 501 under the Securities Act that is acquiring such Securities for
investment purposes and not for distribution in violation of the Securities Act.
We acknowledge on our behalf and on behalf of any investor account for which we
are purchasing Securities that
E-1
the Trust and the Company reserve the right prior to any offer, sale or other
transfer pursuant to clause (c) or (d) to require the delivery of any opinion of
counsel, certifications and/or other information satisfactory to the Trust and
the Company. We understand that the certificates for any Offered Security that
we receive will bear a legend substantially to the effect of the foregoing.
2. We are an "accredited investor" within the meaning of
subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act
purchasing for our own account or for the account of such an "accredited
investor," and we are acquiring the Offered Securities for investment purposes
and not with view to, or for offer or sale in connection with, any distribution
in violation of the Securities Act, and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Offered Securities, and we and any account for
which we are acting are each able to bear the economic risks of our or its
investment.
3. We are acquiring the Offered Securities purchased by
us for our own account (or for one or more accounts as to each of which we
exercise sole investment discretion and have authority to make, and do make, the
statements contained in this letter) and not with a view to any distribution of
the Offered Securities, subject, nevertheless, to the understanding that the
disposition of our property will at all times be and remain within our control.
4. In the event that we purchase any Preferred
Securities or any Subordinated Notes, we will acquire such Preferred Securities
having an aggregate stated liquidation amount of not less than $100,000 or such
Subordinated Notes having an aggregate principal amount not less than $100,000,
for our own account and for each separate account for which we are acting.
5. We acknowledge that we either (A) are not a fiduciary
of a employee benefit, individual retirement account or other plan or
arrangement subject to Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") (each a "Plan"), or an entity whose underlying
assets include "plan assets" by reason of any Plan's investment in the entity,
and are not purchasing the Offered Securities on behalf of or with "plan assets"
by reason of any Plan's investment in the entity, (B) are eligible for the
exemptive relief available under one or more of the following prohibited
transaction class exemptions ("PTCEs") issued by the U.S. Department of Labor:
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another applicable exemption, or (C)
our purchase and holding of this security, or any interest therein, is not
prohibited by Section 406 of ERISA or Section 4975 of the Code with respect to
such purchase or holding.
6. We acknowledge that the Trust and the Company and
others will rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agree that if any of the
acknowledgments, representations, warranties and agreements deemed to have been
made by our purchase of the Offered Securities are no longer accurate, we shall
promptly notify the Company. If we are acquiring any Offered Securities as a
fiduciary or agent for one or more investor accounts, we represent that we have
sole discretion with respect to each such investor account and that we have full
power to make the foregoing acknowledgments, representations and agreement on
behalf of each such investor account.
E-2
(Name of Purchaser)
By: ________________________________
Date: ______________________________
Upon transfer, the Offered Securities would be registered in
the name of the new beneficial owner as follows.
Name: ____________________________________
Address: _________________________________
Taxpayer ID Number: _____________________
E-3
Exhibit F
FORM OF TRANSFEROR CERTIFICATE
TO BE EXECUTED FOR QIBs
__________, [ ]
Hawthorne Financial Corporation
HFC Capital Trust IV
2381 Rosecrans Avenue
El Segundo, California 90245
Re: Purchase of $1,000 stated liquidation amount of
Floating Rate Preferred Securities (the "Preferred
Securities") of HFC Capital Trust IV
Reference is hereby made to the Amended and Restated Trust Agreement of
HFC Capital Trust IV, dated as of November 1, 2002 (the "Trust Agreement"),
among Simone Lagomarsino, David Rosenthal and Eileen Lyon, as Administrative
Trustees, The Bank of New York (Delaware), as Delaware Trustee, The Bank of New
York, as Property Trustee, Hawthorne Financial Corporation, as Depositor, and
the holders from time to time of undivided beneficial interests in the assets of
HFC Capital Trust IV. Capitalized terms used but not defined herein shall have
the meanings given them in the Trust Agreement.
This letter relates to $________________________ aggregate liquidation
amount of Preferred Securities which are held in the name of [name of
transferor] (the "Transferor").
In accordance with Article V of the Trust Agreement, the Transferor
hereby certifies that such Preferred Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Preferred
Securities and (ii) Rule 144A under the Securities Act ("Rule 144A"), to a
transferee that the Transferor reasonably believes is purchasing the Preferred
Securities for its own account or an account with respect to which the
transferee exercises sole investment discretion and the transferee and any such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
a transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
(Name of Transferor)
By: _______________________________
Name:
Title:
Date:_____________________
F-1
Schedule A
With respect to the Trust Securities, the London interbank offered rate
("LIBOR") shall be determined by the Calculation Agent in accordance with the
following provisions (in each case rounded to the nearest .000001%):
(1) On the second LIBOR Business Day (as defined below) prior to a
Distribution Date (except, with respect to the first distribution payment date,
on October 30, 2002) (each such day, a "LIBOR Determination Date"), LIBOR for
any given security shall, for the following distribution period, equal the rate,
as obtained by the Calculation Agent from Bloomberg Financial Markets
Commodities News, for six-month Eurodollar deposits that appears on Dow Jones
Telerate Page 3750 (as defined in the International Swaps and Derivatives
Association, Inc. 1991 Interest Rate and Currency Exchange Definitions), or such
other page as may replace such Page 3750, as of 11:00 a.m. (London time) on such
LIBOR Determination Date.
(2) If, on any LIBOR Determination Date, such rate does not appear on Dow
Jones Telerate Page 3750 or such other page as may replace such Page 3750, the
Calculation Agent shall determine the arithmetic mean of the offered quotations
of the Reference Banks (as defined below) to leading banks in the London
interbank market for six-month Eurodollar deposits in an amount determined by
the Calculation Agent by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on the LIBOR Determination Date made by
the Calculation Agent to the Reference Banks. If, on any LIBOR Determination
Date, at least two of the Reference Banks provide such quotations, LIBOR shall
equal such arithmetic mean of such quotations. If, on any LIBOR Determination
Date, only one or none of the Reference Banks provide such quotations, LIBOR
shall be deemed to be the arithmetic mean of the offered quotations that leading
banks in the City of New York selected by the Calculation Agent are quoting on
the relevant LIBOR Determination Date for six-month Eurodollar deposits in an
amount determined by the Calculation Agent by reference to the principal London
offices of leading banks in the London interbank market; provided, that if the
Calculation Agent is required but is unable to determine a rate in accordance
with at least one of the procedures provided above, LIBOR shall be LIBOR as
determined on the previous LIBOR Determination Date.
(3) As used herein: "Reference Banks" means four major banks in the London
interbank market selected by the Calculation Agent; and "LIBOR Business Day"
means a day on which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) in London.
Schedule A-1