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EXHIBIT 4.3
AMENDED AND RESTATED DECLARATION OF TRUST
OF
LITCHFIELD CAPITAL TRUST I
DATED AS OF ___________, ____
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TABLE OF CONTENTS
(This Table of Contents does not constitute part of the Amended and
Restated Declaration of Trust and should not have any bearing upon the
interpretation of any of its terms or provisions.)
PAGE
ARTICLE 1
Definitions
Section 1.01. Definitions............................................ 2
Affiliate....................................................... 2
Book Entry Interest............................................. 2
Business Day.................................................... 2
Business Trust Act.............................................. 2
Certificate..................................................... 2
Certificate of Trust............................................ 3
Clearing Agency................................................. 3
Clearing Agency Participant..................................... 3
Closing Date.................................................... 3
Code............................................................ 3
Commission...................................................... 3
Common Securities............................................... 3
Common Security Certificate..................................... 3
Covered Person.................................................. 3
Creditor........................................................ 3
Debenture Trustee............................................... 3
Debentures...................................................... 3
Definitive Preferred Security Certificates...................... 3
Delaware Trustee................................................ 4
Depositary Agreement............................................ 4
Distribution.................................................... 4
DTC............................................................. 4
Event of Default................................................ 4
Exchange........................................................ 4
Exchange Act.................................................... 4
First Closing Date ............................................. 4
Fiscal Year..................................................... 4
Global Certificate.............................................. 4
Holder.......................................................... 4
Holder Direct Action............................................ 4
Litchfield Financial............................................ 4
Sponsor......................................................... 4
Indemnified Person.............................................. 4
Indenture....................................................... 4
Indenture Event of Default...................................... 4
3
Investment Company.............................................. 5
Investment Company Act.......................................... 5
Legal Action.................................................... 5
Liquidation Distribution........................................ 5
List of Holders................................................. 5
Majority in liquidation amount of the Securities................ 5
NASD............................................................ 5
Nasdaq.......................................................... 5
1933 Act Registration Statement................................. 5
1934 Act Registration Statement................................. 5
Officers' Certificate........................................... 5
Opinion of Counsel.............................................. 6
Option Closing Date ............................................ 6
Original Declaration............................................ 6
Paying Agent.................................................... 6
Payment Amount.................................................. 6
Person.......................................................... 6
Preferred Guarantee............................................. 6
Preferred Securities............................................ 6
Preferred Security Beneficial Owner............................. 6
Preferred Security Certificate.................................. 6
Property Trustee................................................ 7
Property Account................................................ 7
Quorum.......................................................... 7
Regular Trustee................................................. 7
Related Party................................................... 7
Resignation Request............................................. 7
Responsible Officer............................................. 7
Rule 3a-7....................................................... 7
Securities...................................................... 7
Securities Act.................................................. 7
Special Event................................................... 7
Successor Delaware Trustee...................................... 7
Successor Entity................................................ 7
Successor Property Trustee...................................... 7
Successor Securities............................................ 7
Super Majority.................................................. 8
Supplemental Indenture.......................................... 8
10% in liquidation amount of the Securities..................... 8
Treasury Regulations............................................ 8
Trust........................................................... 8
Trustee......................................................... 8
Trustees........................................................ 8
Trust Indenture Act............................................. 8
Underwriting Agreement.......................................... 8
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ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application....................... 8
Section 2.02. Lists of Holders of Preferred Securities............... 9
Section 2.03. Reports by the Property Trustee........................ 9
Section 2.04. Periodic Reports to the Property Trustee............... 10
Section 2.05. Evidence of Compliance with Conditions Precedent....... 10
Section 2.06. Events of Default; Waiver.............................. 10
Section 2.07. Disclosure of Information.............................. 12
ARTICLE 3
Organization
Section 3.01. Name................................................... 12
Section 3.02. Office................................................. 12
Section 3.03. Issuance of the Securities............................. 12
Section 3.04. Purchase of Debentures................................. 13
Section 3.05. Purpose................................................ 13
Section 3.06. Authority.............................................. 14
Section 3.07. Title to Property of the Trust......................... 14
Section 3.08. Powers and Duties of the Regular Trustees.............. 14
Section 3.09. Prohibition of Actions by the Trust and the Trustees... 17
Section 3.10. Powers and Duties of the Property Trustee.............. 18
Section 3.11. Delaware Trustee....................................... 21
Section 3.12. Certain Rights and Duties of the Property Trustee...... 21
Section 3.13. Registration Statement and Related Matters............. 25
Section 3.14. Filing of Amendments to Certificate of Trust........... 26
Section 3.15. Execution of Documents by the Regular Trustees......... 26
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities............................................. 26
Section 3.17. Duration of the Trust.................................. 26
Section 3.18. Mergers................................................ 26
Section 3.19. Property Trustee May File Proofs of Claim.............. 38
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor........... 29
Section 4.02. Expenses............................................... 29
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications..................... 30
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Section 5.02. Appointment, Removal and Resignation of the Trustees... 32
Section 5.03. Vacancies among the Trustees........................... 33
Section 5.04. Effect of Vacancies.................................... 33
Section 5.05. Meetings............................................... 34
Section 5.06. Delegation of Power.................................... 34
Section 5.07. Merger, Conversion, Consolidation or Succession to
Business............................................... 34
ARTICLE 6
Distributions
Section 6.01. Distributions.......................................... 35
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities............ 35
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust............................... 37
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities................................. 37
Section 9.02. Transfer of Certificates............................... 38
Section 9.03. Deemed Security Holders................................ 38
Section 9.04. Book Entry Interests................................... 38
Section 9.05. Notices to Holders of Certificates..................... 39
Section 9.06. Appointment of Successor Clearing Agency............... 39
Section 9.07. Definitive Preferred Securities Certificates........... 40
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates...... 40
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation........................................... 40
Section 10.02. Indemnification....................................... 41
Section 10.03. Outside Business...................................... 41
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ARTICLE 11
Accounting
Section 11.01. Fiscal Year........................................... 42
Section 11.02. Certain Accounting Matters............................ 42
Section 11.03. Banking............................................... 43
Section 11.04. Withholding........................................... 43
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments............................................ 43
Section 12.02. Meetings of the Holders of Securities; Action by
Written Consent....................................... 44
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property
Trustee............................................... 46
Section 13.02. Representations and Warranties of the Delaware
Trustee............................................... 46
ARTICLE 14
Miscellaneous
Section 14.01. Notices............................................... 47
Section 14.02. Undertaking for Costs................................. 48
Section 14.03. Governing Law......................................... 49
Section 14.04. Headings.............................................. 49
Section 14.05. Partial Enforceability................................ 49
Section 14.06. Counterparts.......................................... 49
Section 14.07. Intention of the Parties.............................. 49
Section 14.08. Successors and Assigns................................ 49
Section 14.09. No Recourse........................................... 49
SIGNATURES AND SEALS
EXHIBIT A: CERTIFICATE OF TRUST
EXHIBIT B: TERMS OF THE PREFERRED SECURITIES
EXHIBIT C: TERMS OF THE COMMON SECURITIES
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
LITCHFIELD CAPITAL TRUST I
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated and
effective as of __________, ____ by Richard A. Stratton, an individual, Heather
A. Sica, an individual, and Ronald E. Rabidou, an individual, as Regular
Trustees (the "Regular Trustees"), The Bank of New York, a New York banking
corporation, as Property Trustee (the "Property Trustee") and The Bank of New
York (Delaware), a Delaware banking corporation, as Delaware Trustee (the
"Delaware Trustee") (together with all other Persons from time to time duly
appointed and serving as trustees in accordance with the provisions of this
Declaration, the "Trustees"), Litchfield Financial Corporation, a Massachusetts
corporation, as trust sponsor ("Litchfield Financial" or the "Sponsor"), and by
the holders, from time to time, of undivided beneficial interests in the assets
of the Trust to be issued pursuant to this Declaration.
WHEREAS, the Sponsor and certain of the Trustees entered into a Declaration of
Trust dated as of [ ], 1999 (the "Original Declaration") in order to
establish Litchfield Capital Trust I, a statutory business trust (the "Trust"),
under the Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust") of the Trust was
filed with the office of the Secretary of State of the State of Delaware on
[ ]; and
WHEREAS, the Trustees and the Sponsor desire to continue the Trust pursuant to
the Business Trust Act for the purpose of, as described more fully in Sections
303 and 304 hereof, (i) issuing and selling Preferred Securities (as hereinafter
defined) representing preferred undivided beneficial interests in the assets of
the Trust for cash and investing the proceeds thereof in Debentures (as
hereinafter defined) of Litchfield Financial issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as hereinafter defined) representing common undivided
beneficial interests in the assets of the Trust to Litchfield Financial in
exchange for cash and investing the proceeds thereof in additional Debentures
issued under the Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act, that the Original
Declaration be amended and restated in its entirety as provided herein and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all Debentures referred to in clauses (i) and (ii) of the
previous paragraph purchased by the Trust will be held for the benefit of the
Holders (as hereinafter defined) from time to time, of the Certificates (as
hereinafter defined) representing undivided beneficial interests in the assets
of the Trust issued hereunder, subject to the provisions of this Declaration.
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ARTICLE 1
Definitions
Section 1.01. Definitions.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this
Section 1.01;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Amended and Restated Declaration of Trust (including Exhibits A, B and C
hereto (the "Exhibits")) as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles, Sections and Exhibits
are to Articles and Sections of and Exhibits to this Declaration unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"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.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through
book entries by such Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Borough of Manhattan, The City and
State of New York or Boston, Massachusetts are authorized or required by
law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code (S) 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred Security
Certificate.
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"Certificate of Trust" has the meaning set forth in the second WHEREAS
clause above.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depository
for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" means the Closing Date as specified in the Underwriting
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section
(Sec.) of the Code refers not only to such specific section but also to
any corresponding provision of any Federal tax statute enacted after the
date of this Declaration, as such specific section or corresponding
provision is in effect on the date of application of the provisions of
this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.01(b).
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form
of Annex I to Exhibit C.
"Covered Person" means (i) any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or of any of its
Affiliates, (ii) any officer, director, shareholder, employee,
representative or agent of Litchfield Financial or of any of its
Affiliates and (iii) the Holders from time to time of the Securities.
"Creditor" has the meaning specified in Section 4.02(c).
"Debenture Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture until a successor is
appointed thereunder and thereafter means such successor trustee.
"Debentures" means the series of junior subordinated debentures issued by
Litchfield Financial under the Indenture to the Property Trustee and
entitled the "____% Junior Subordinated Debentures due [ ]".
"Definitive Preferred Security Certificates" has the meaning set forth in
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Section 9.04.
"Delaware Trustee" has the meaning set forth in Section 5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the Property
Trustee and DTC dated as of the Closing Date, as the same may be amended
or supplemented from time to time.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means that an Indenture
Event of Default has occurred and is continuing with respect to the
Debentures.
"Exchange" has the meaning specified in Section 3.13.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"First Closing Date" means the First Closing Date as specified in the
Underwriting Agreement.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"Holder Direct Action" has the meaning specified in Section 3.10(e).
"Indemnified Person" means any Trustee, any Affiliate of any Trustee, any
Paying Agent, any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee or Paying Agent, or
any employee or agent of the Trust or of any of its Affiliates.
"Indenture" means the Junior Subordinated Indenture dated as of
_________, ____ between Litchfield Financial and the Debenture Trustee as
supplemented by the _______ Supplemental Indenture thereto dated as of
____________, ____, pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means that an event or condition defined as
an "Event of Default" with respect to the Debentures under Section
6.01(a) of the Indenture has occurred and is continuing.
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"Investment Company" means an "investment company" as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits B and C
hereto establishing the terms of the Securities.
"List of Holders" has the meaning specified in Section 2.02(a).
"Litchfield Financial" or " Sponsor" means Litchfield Financial
Corporation, a Massachusetts corporation, or any successor entity
resulting from any merger, consolidation, amalgamation or other business
combination, in its capacity as sponsor of the Trust.
"Majority in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in
the penultimate paragraph of paragraph 6 of Exhibit B hereto, Holder(s)
of outstanding Securities voting together as a single class or, as the
context may require, Holder(s) of outstanding Preferred Securities or
Common Securities voting separately as a class, who are the record owners
of a relevant class of Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise,
plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) represents more than 50% of the
liquidation amount of all outstanding Securities of such class.
"NASD" has the meaning specified in Section 3.13.
"Nasdaq" has the meaning specified in Section 3.13.
"1933 Act Registration Statement" has the meaning specified in Section
3.13.
"1934 Act Registration Statement" has the meaning specified in Section
3.13.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Chief Executive Officer, the President or a Vice President,
and by the Treasurer, an Associate Treasurer, an Assistant Treasurer, the
Comptroller, the Secretary or an Assistant Secretary of the Sponsor, and
delivered to the appropriate Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 2.04 shall be the
principal executive, financial or accounting officer of the Sponsor. Any
Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration shall include:
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(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Sponsor, which may be
an employee of the Sponsor but not an employee of the Trust or the
Property Trustee, and who shall be reasonably acceptable to the Property
Trustee. Any Opinion of Counsel pertaining to Federal income tax matters
may rely on published rulings of the Internal Revenue Service.
"Option Closing Date" means the Option Closing Date as specified in the
Underwriting Agreement.
"Original Declaration" has the meaning set forth in the first WHEREAS
clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Payment Amount" has the meaning specified in Section 6.01.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Preferred Guarantee" means the Guarantee Agreement dated as of
__________, ____ of Litchfield Financial in respect of the Preferred
Securities.
"Preferred Securities" has the meaning specified in Section 7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate in fully
registered form representing a Preferred Security substantially in the
form of Annex I to Exhibit B.
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"Property Trustee" means the Trustee meeting the eligibility requirements
set forth in Section 5.01(c) and having the duties set forth for the
Property Trustee herein.
"Property Account" has the meaning specified in Section 3.10(c)(i).
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Property Trustee and
the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned subsidiary of
Litchfield Financial or any other Person which owns, directly or
indirectly, 100% of the outstanding voting securities of Litchfield
Financial.
"Resignation Request" has the meaning specified in Section 5.02(d).
"Responsible Officer" means, when used with respect to the Property
Trustee, any officer within the corporate trust department of the
Property Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other
officer of the Property Trustee who customarily performs functions
similar to those performed by the Persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of such Person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration
of this Declaration.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Special Event" has the meaning set forth in the terms of the Securities
as set forth in paragraph 4 of Exhibits B and C hereto.
"Successor Delaware Trustee" has the meaning specified in Section
5.02(b)(ii).
"Successor Entity" has the meaning specified in Section 3.18(b)(i).
"Successor Property Trustee" has the meaning specified in Section
5.02(b)(i).
"Successor Securities" has the meaning specified in Section
3.18(b)(i)(B).
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"Super Majority" has the meaning specified in Section 2.06(a)(ii).
"Supplemental Indenture" means the _____ Supplemental Indenture dated as
of ________, ____ between Litchfield Financial and the Debenture Trustee,
pursuant to which the Debentures are to be issued.
"10% in liquidation amount of the Securities" means, except as otherwise
required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 6 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the
context may require, Holder(s) of outstanding Preferred Securities or
Common Securities, voting separately as a class, who are the record
owners of a relevant class of Securities whose liquidation amount
(including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to
the date upon which the voting percentages are determined) represents 10%
or more of the liquidation amount of all outstanding Securities of such
class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trust" has the meaning set forth in the first WHEREAS clause above.
"Trustee" or " Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office
in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and references herein to a Trustee
or the Trustees shall refer to such Person or Persons solely in their
capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement dated as of
__________, ____ among the Trust, the Sponsor and Tucker Anthony
Incorporated, as representatives of the several underwriters named
therein.
ARTICLE 2
Trust Indenture Act
Section 2.01. Trust Indenture Act; Application.
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(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control;
(c) the Property Trustee, to the extent permitted by applicable law
and/or the rules and regulations of the Commission, shall be the only
Trustee which is a trustee for the purposes of the Trust Indenture Act;
and
(d) the application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.02. Lists of Holders of Preferred Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Property Trustee unless the Property Trustee is
registrar for the Securities, (i) within 14 days after each record date
for payment of Distributions, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders
("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time that the List of
Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust
of a written request for a List of Holders as of a date no more than 14
days before such List of Holders is given to the Property Trustee. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or
which it receives in the capacity as Paying Agent (if acting in such
capacity) provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under (S)(S)
310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Property Trustee.
Within 60 days after January 15 of each year, the Property Trustee shall
provide to the Holders of the Securities such reports as are required by
(S) 313 of the Trust Indenture Act, if any, in the form, in the manner
and at the times provided by (S) 313 of the Trust Indenture Act. The
Property Trustee shall also comply with the requirements of (S) 313(d) of
the Trust Indenture Act. A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Property Trustee with the
Company, with each stock exchange upon which any Preferred
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Securities are listed (if so listed) and also with the Commission. The
Company agrees to notify the Property Trustee when any Preferred
Securities become listed on any stock exchange and of any delisting
thereof.
Section 2.04. Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as
required by (S) 314(a)(1)-(3) (if any) of the Trust Indenture Act and the
compliance certificates required by (S) 314(a)(4) and (c) of the Trust
Indenture Act, any such certificates to be provided in the form, in the
manner and at the times required by (S) 314(a)(4) and (c) of the Trust
Indenture Act (provided that any certificate to be provided pursuant to
(S) 314(a)(4) of the Trust Indenture Act shall be provided within 120
days of the end of each Fiscal Year). Delivery of such reports,
information and documents to the Property Trustee is for informational
purposes only and the Property Trustee's receipt of such shall not
constitute constructive notice of any information contained therein,
including the Company's compliance with any of its covenants hereunder
(as to which the Property Trustee is entitled to rely exclusively on
Officers' Certificates).
Section 2.05. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Declaration which relate to any
of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c) may be given in the form of an Officers' Certificate.
Section 2.06. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event
of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under this
Declaration shall also not be waivable; or
(ii) requires the consent or vote of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under
this Declaration may only be waived by the vote of the Holders of at
least the proportion in aggregate liquidation amount of the Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
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The foregoing provisions of this Section 2.06(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event
of Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of the
Common Securities are deemed to have waived such Event of Default under
the Declaration as provided above in Section 2.06(a) or below in this
Section 2.06(b), the Event of Default under this Declaration shall also
not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under this Declaration as provided above in
Section 2.06(a) or below in this Section 2.06(b), the Event of Default
under this Declaration may only be waived by the vote of the Holders of
at least the proportion in aggregate liquidation amount of the Common
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided, further, that the Holders of Common Securities will be deemed to have
waived any such Event of Default and all Events of Defaults with respect to the
Common Securities and their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.06(b) shall be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. In the event that any Event
of Default with respect to the Preferred Securities is waived by the Holders of
Preferred Securities as provided in the Declaration, the Holders of Common
Securities agree that such waiver shall also constitute the waiver of such Event
of Default with respect to the Common Securities for all purposes under the
Declaration without any further act, vote or consent of the
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Holders of the Common Securities. Subject to the foregoing provisions of this
Section 2.06(b), upon waiver, any such default shall cease to exist and any
Event of Default with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.06(c) shall be in
lieu of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S)
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture
Act.
Section 2.07. Disclosure of Information.
The disclosure of information as to the names and addresses of the
Holders of the Securities in accordance with (S) 312 of the Trust
Indenture Act, regardless of the source from which such information was
derived, shall not be deemed to be a violation of any existing law, or
any law hereafter enacted which does not specifically refer to (S) 312 of
the Trust Indenture Act, nor shall the Property Trustee be held
accountable by reason of mailing any material pursuant to a request made
under (S) 312(b) of the Trust Indenture Act.
ARTICLE 3
Organization
Section 3.01. Name.
The Trust continued by this Declaration is named "Litchfield Capital
Trust I" as such name may be modified from time to time by the Regular
Trustees following written notice to the Holders of the Securities. The
Trust's activities may be conducted under the name of the Trust or any
other name deemed advisable by the Regular Trustees.
Section 3.02. Office.
The address of the principal office of the Trust is c/o Litchfield
Financial Corporation, 430 Main Street, Williamstown, Massachusetts
01267. Upon ten days' written notice to the Holders, the Regular Trustees
may change the location of the Trust's principal office.
Section 3.03. Issuance of the Securities.
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The Sponsor, on behalf of the Trust and pursuant to the Original
Declaration, executed and delivered the Underwriting Agreement.
On the First Closing Date and contemporaneously with the execution and
delivery of this Declaration, the Regular Trustees, on behalf of the
Trust, shall execute and deliver (i) one or more Global Certificates,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.04 for the benefit of the underwriters named in
the Underwriting Agreement, in an aggregate amount of ___________
Preferred Securities having an aggregate liquidation amount of
$__________, against receipt of the aggregate purchase price of such
Preferred Securities of $___________, and (ii) to the Sponsor, one or
more Common Securities Certificates, registered in the name of the
Sponsor, in an aggregate amount of ________ Common Securities having an
aggregate liquidation amount of $____________, against receipt of the
aggregate purchase price of such Common Securities of $___________.
On the Option Closing Date, if any, the Regular Trustees, on behalf of
the Trust, shall execute and deliver (i) one or more Global Certificates,
registered in the name of the nominee of the initial Clearing Agency as
specified in Section 9.04 for the benefit of the underwriters named in
the Underwriting Agreement, in an aggregate amount of up to ___________
Preferred Securities having an aggregate liquidation amount of up to
$__________, against receipt of the aggregate purchase price of such
Preferred Securities of up to $___________ plus accrued interest from the
First Closing Date, and (ii) to the Sponsor, one or more Common
Securities Certificates, registered in the name of the Sponsor, in an
aggregate amount of up to ________ Common Securities having an aggregate
liquidation amount of up to $____________, against receipt of the
aggregate purchase price of such Common Securities of up to $___________.
Section 3.04. Purchase of Debentures.
On the First Closing Date and contemporaneously with the execution and
delivery of this Declaration, the Regular Trustees, on behalf of the
Trust, shall purchase from the Sponsor with the proceeds received by the
Trust from the sale of the Securities on such date pursuant to Section
3.03, at a purchase price of 100% of the principal amount thereof,
Debentures,registered in the name of the Property Trustee and having an
aggregate principal amount equal to $___________, and, in satisfaction
of the purchase price for such Debentures, the Regular Trustee, on
behalf of the Trust, shall deliver or cause to be delivered to the
Sponsor the sum of $___________.
On the Option Closing Date, if any, the Regular Trustees, on behalf of
the Trust, shall purchase from the Sponsor with the proceeds received by
the Trust from the sale of the Securities on such date pursuant to
Section 3.03, at a purchase price of 100% of the principal amount thereof
plus accrued interest from the First Closing Date, Debentures, registered
in the name of the Property Trustee and having an aggregate principal
amount equal to up to $___________, and, in satisfaction of the purchase
price for such Debentures, the Regular Trustee, on behalf of the Trust,
shall deliver or cause to be delivered to the Sponsor the sum of up to
$___________.
Section 3.05. Purpose.
The exclusive purposes and functions of the Trust are: (a)(i) to issue
and sell Preferred Securities for cash and use the proceeds of such sales
to acquire from Litchfield Financial Debentures issued under the
Indenture having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so issued and sold; (ii)
to enter into such agreements and arrangements as may be necessary in
connection with the sale of Preferred Securities to the initial
purchasers thereof (including the Underwriting Agreement) and to take all
action, and exercise such discretion, as may be necessary or desirable in
connection therewith and to file such registration statements or make
such other filings under the Securities Act, the Exchange Act or state
securities or "Blue Sky" laws as may be necessary or desirable in
connection therewith and the issuance of the Preferred Securities; and
(iii) to issue and sell Common Securities to Litchfield Financial for
cash and use the proceeds of such sale to purchase as trust assets an
equal aggregate principal amount of Debentures issued under the
Indenture; and (b) except as otherwise limited herein, to engage in only
those other activities necessary, convenient or incidental thereto,
including such other activities specifically authorized in this
Declaration. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, mortgage or pledge any of its assets
or at any time while the Securities are outstanding, otherwise undertake
(or permit to be undertaken) any activity that would result in
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or cause the Trust not to be classified for United States Federal income
tax purposes as a grantor trust.
Section 3.06. Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust.
An action taken by the Regular Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee on behalf of the Trust in accordance with
its powers shall constitute the act of and serve to bind the Trust. In
dealing with the Trustees acting on behalf of the Trust, no Person shall
be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively
on the power and authority of the Trustees as set forth in this
Declaration.
Section 3.07. Title to Property of the Trust.
Except as provided in Section 3.10 with respect to the Debentures and the
Property Account or unless otherwise provided in this Declaration, legal
title to all assets of the Trust shall be vested in the Trust. The
Holders shall not have legal title to any part of the assets of the
Trust, but shall have undivided beneficial interests in the assets of the
Trust.
Section 3.08. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, authority and duty
to cause the Trust, and shall cause the Trust, to engage in the following
activities:
(a) to issue Preferred Securities and Common Securities, in each case in
accordance with this Declaration; provided, however, that the Trust may
issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall
be no interests in the Trust other than the Securities and the issuance
of Securities shall be limited to simultaneous issuances of both
Preferred Securities and Common Securities on each Closing Date;
(b) in connection with the issuance of the Preferred Securities, at the
direction of the Sponsor, to effect or cause to be effected the filings,
and to execute or cause to be executed, the documents, set forth in
Section 3.13 and to execute, deliver and perform on behalf of the Trust
the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds of the sale
of the Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to all of the
Debentures to be vested in, and the Debentures to be held of record in
the
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name of, the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Common Securities;
(d) if and to the extent that the Sponsor on behalf of the Trust has not
already done so, to cause the Trust to enter into the Underwriting
Agreement and such other agreements and arrangements as may be necessary
or desirable in connection with the sale of the Preferred Securities to
the initial purchasers thereof and the consummation thereof, and to take
all action, and exercise all discretion, as may be necessary or desirable
in connection with the consummation thereof;
(e) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining to take any ministerial action in relation to a Special Event;
(f) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the
purposes of (S) 316(c) of the Trust Indenture Act and with respect to
Distributions, voting rights, redemptions, and exchanges, and to issue
relevant notices to Holders of the Preferred Securities and Common
Securities as to such actions and applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.10(e), the Property
Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate to the Property Trustee required by (S)
314(a)(4) of the Trust Indenture Act, which certificate may be executed
by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to carrying out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities, the Regular Trustees hereby initially
appointing the Property Trustee for such purposes;
(m) to take all actions and perform such duties as may be required of the
Regular Trustee pursuant to the terms of the Securities set forth in
Exhibits B and C hereto;
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(n) to take all actions which may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which
the Trust has been created;
(o) to take all actions, not inconsistent with this Declaration or with
applicable law, which the Regular Trustees determine in their discretion
to be necessary or desirable in carrying out the purposes of the Trust
and the activities of the Trust as set out in this Section 3.08,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States Federal income
tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the Debentures will be
treated as indebtedness of the Sponsor for United States Federal income
tax purposes;
(p) to take all actions necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of
the Trust, and to comply with any requirements imposed by any taxing
authority on holders of instruments treated as indebtedness for United
States Federal income tax purposes;
(q) subject to the requirements of Rule 3a-7 (if the Trust is excluded
from the definition of an Investment Company solely by reason of Rule
3a-7) and (S) 317(b) of the Trust Indenture Act, to appoint one or more
Paying Agents in addition to the Property Trustee; and
(r) to execute all documents or instruments, perform all duties and
powers and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this Section 3.08 in
a manner which is consistent with the purposes and functions of the Trust set
out in Section 3.05, and the Regular Trustees shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in Section
3.05.
Subject to this Section 3.08, the Regular Trustees shall have none of the powers
or any of the authority of the Property Trustee set forth in Section 3.10.
The Regular Trustees shall take all actions on behalf of the Trust that are not
specifically required by this Declaration to be taken by any other Trustee.
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Any expenses incurred by the Regular Trustees pursuant to this Section 3.08
shall be reimbursed by the Sponsor.
Section 3.09. Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property Trustee)
shall cause the Trust not to, engage in any activity other than in
connection with the purposes of the Trust or other than as required or
authorized by this Declaration. In particular, the Trust shall not and
the Trustees (including the Property Trustee) shall not cause the Trust
to:
(a) invest any proceeds received by the Trust from holding the Debentures
but shall promptly distribute from the Property Account all such proceeds
to Holders of Securities pursuant to the terms of this Declaration and of
the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
assets or the terms of the Securities in any way whatsoever, except as
otherwise expressly provided herein;
(f) issue any securities or other evidences of beneficial ownership of,
or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money;
(h) (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Debenture Trustee or exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section
6.06 of the Indenture, or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the
Debentures, without, in each case, obtaining the prior approval of the
Holders of a Majority in liquidation amount of all outstanding
Securities;
(i) revoke any action previously authorized or approved by a vote of the
Holders of Preferred Securities except by subsequent vote of such
Holders;
(j) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required, unless
in the case of this clause (j) the Property Trustee shall have received
an Opinion of Counsel experienced in such matters to the effect that such
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amendment, modification or termination will not cause more than an
insubstantial risk that for United States Federal income tax purposes the
Trust will not be classified as a grantor trust;
(k) take or consent to any action that would result in the placement of a
lien, pledge, charge, mortgage or other encumbrance on any of the Trust
property;
(l) vary the investment (within the meaning of Treasury Regulation
Section 301.7701-4(c)) of the Trust or of the Holders of Securities; or
(m) after the date hereof, enter into any contract or agreement (other
than any depositary agreement or any agreement with any securities
exchange or automated quotation system) that does not expressly provide
that the Holders of Preferred Securities, in their capacities as such,
have limited liability (in accordance with the provisions of the Business
Trust Act) for the liabilities and obligations of the Trust, which
express provision shall be in substantially the following form, "The
Holders of the Preferred Securities, in their capacities as such, shall
not be personally liable for any liabilities or obligations of the Trust
arising out of this Agreement, and the parties hereto hereby agree that
the Holders of the Preferred 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 3.10. Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the
Property Trustee to the Debentures shall vest automatically in each
Person who may hereafter be appointed as Property Trustee in accordance
with Article 5. Such vesting and cessation of title shall be effective
whether or not conveyancing documents with regard to the Debentures have
been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Regular Trustees or, if the Property Trustee
does not also act as the Delaware Trustee, the Delaware Trustee.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing bank account
(the "Property Account") in the name of and under the exclusive control
of the Property Trustee on behalf of the Holders of the Securities and on
the receipt of payments of funds made in respect of the Debentures held
by the Property Trustee, deposit such funds into the Property Account
and, without any further acts of the Property Trustee or the Regular
Trustees, promptly make payments to the Holders of the Preferred
Securities and Common Securities from the Property Account in accordance
with Section 6.01. Funds in the Property Account shall be held
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uninvested, and without liability for interest thereon, until disbursed
in accordance with this Declaration. The Property Account shall be an
account which is maintained with a banking institution whose long term
unsecured indebtedness is rated by a "nationally recognized statistical
rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act, at least investment grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect promptly the redemption of the Preferred Securities
and the Common Securities to the extent the Debentures are redeemed or
mature;
(iii) upon notice of distribution issued by the Regular Trustees in
accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary
or appropriate to effect promptly pursuant to terms of the Securities the
distribution of Debentures to Holders of Securities upon the election of
the Holder of Common Securities to distribute the Debentures to Holders
of Securities and dissolve the Trust; and
(iv) have the legal power to exercise all of the rights, powers and
privileges of a holder of the Debentures under the Indenture and, if an
Event of Default occurs and is continuing, the Property Trustee, subject
to Section 3.10(e), shall for the benefit of the Holders of the
Securities, enforce its rights as holder of the Debentures under the
Indenture, subject to the rights of the Holders of the Preferred
Securities pursuant to the terms of this Declaration, the Business Trust
Act and the Trust Indenture Act.
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the
terms of the Securities set forth in Exhibits B and C hereto.
(e) If an Event of Default has occurred and is continuing, then the
Holders of a Majority in liquidation amount of the Preferred Securities
will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property
Trustee under the Declaration, including the right to direct the Property
Trustee to exercise the remedies available to it as a holder of the
Debentures. If the Property Trustee fails to enforce its rights under the
Debentures, a Holder of Preferred Securities, to the extent permitted by
applicable law, may, after a period of 30 days has elapsed since such
Holder's written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against the Sponsor to enforce the
Property Trustee's rights under the Debentures without first instituting
any legal proceeding against the Property Trustee or any other Person;
provided further, that, if an Event of Default has occurred and is
continuing and such event is attributed to the failure of the Sponsor to
pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation
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amount of the Preferred Securities of such Holder (a "Holder Direct
Action") on or after the respective due date specified in the Debentures.
In connection with such Holder Direct Action, the Sponsor will be
subrogated to the rights of such Holder of Preferred Securities to the
extent of any payment made by the Sponsor to such Holders of Preferred
Securities in such Holder Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able
to exercise directly any other remedy available to the Holders of the
Debentures.
(f) All moneys deposited in the Property Account and all Debentures held
by the Property Trustee for the benefit of the Holders of the Securities
will not be subject to any right, charge, security interest, lien or
claim of any kind in favor of, or for the benefit of the Property Trustee
or its agents or their creditors.
(g) The Property Trustee shall, within 90 days after the occurrence of a
default with respect to the Securities actually known to a Responsible
Officer of the Property Trustee, transmit by mail, first class postage
prepaid, to the holders of the Securities, as their names and addresses
appear upon the register, notice of such defaults with respect to the
Securities known to the Property Trustee, unless such defaults shall have
been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 3.10(g) being hereby defined to be an Indenture
Event of Default, not including any periods of grace provided for in the
Indenture and irrespective of the giving of any notice provided therein);
provided, that, except in the case of default in the payment of the
principal of (or premium, if any) or interest on any of the Debentures,
the Property Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers, of the Property
Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders of the Securities. The Property Trustee
shall not be deemed to have knowledge of any default, except (i) a
default in the payment of principal, premium or interest on the
Debentures or (ii) any default as to which the Property Trustee shall
have received written notice or a Responsible Officer charged with the
administration of this Declaration shall have obtained written notice.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and accepted
that appointment in accordance with Article 5.
(i) The Property Trustee shall act as paying agent in respect of the
Common Securities and, if the Preferred Securities are not in book entry
only form, the Preferred Securities and, subject to Section 3.08(q), may
authorize one or more Persons (each, a "Paying Agent") to pay
Distributions, redemption payments or liquidation payments on behalf of
the Trust with respect
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to the Preferred Securities. Any such Paying Agent shall comply with (S)
317(b) of the Trust Indenture Act. Any Paying Agent may be removed by the
Property Trustee, after consultation with the Regular Trustees, at any
time and a successor Paying Agent or additional Paying Agents may be
appointed at any time by the Property Trustee, subject to Section
3.08(q).
(j) The Property Trustee shall give prompt written notice to the Holders
of the Securities of any notice received by it from Litchfield Financial
of its election to defer payments of interest on the Debentures by
extending the interest payment period with respect thereto.
(k) Subject to this Section 3.10, the Property Trustee shall have none of
the powers or the authority of the Regular Trustees set forth in Section
3.08.
(l) The Property Trustee shall exercise the powers, duties and rights set
forth in this Section 3.10 and Section 3.12 in a manner which is
consistent with the purposes and functions of the Trust set out in
Section 3.05, and the Property Trustee shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in
Section 3.05.
Section 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.01(a)(3), 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 Trustees described in this
Declaration. Except as set forth in Section 5.01(a)(3), the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling
the requirements of (S) 3807(a) of the Business Trust Act. No implied
covenants or obligations shall be read into this Declaration against the
Delaware Trustee.
Section 3.12. Certain Rights and Duties of the Property Trustee.
(a) The Property Trustee, before the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth
in this Declaration, and no implied covenants shall be read into this
Declaration against the Property Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06),
the Property Trustee shall exercise such of the rights and powers vested
in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
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(i) prior to the occurrence of an Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Declaration,
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Property Trustee;
and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Property Trustee and conforming to the requirements of this
Declaration; provided, however, that in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee, the
Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation
amount of the 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 Declaration; and
(iv) no provision of this Declaration shall require the Property Trustee
to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or adequate indemnity
against such risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and (b):
(i) whenever in the administration of this Declaration, 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 is herein specifically prescribed) may, in
the absence of bad faith on its part and, if the Trust is excluded from
the definition of Investment Company solely by means of Rule 3a-7,
subject to the requirements of Rule 3a-7,
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request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(ii) the Property Trustee (A) may consult with counsel (which may be
counsel to the Sponsor or any of its Affiliates and may include any of
its employees) selected by it in good faith and with due care and the
advice or opinion of such counsel with respect to legal matters shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B) shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(iii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it in good faith and with due care;
(iv) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have offered to the
Property Trustee security and indemnity satisfactory to the Property
Trustee against the costs, expenses (including attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with
such request or direction; provided that nothing contained in this clause
(iv) shall relieve the Property Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or waived) to
exercise such of the rights and powers vested in it by this Declaration,
and to use the same degree of care and skill in this exercise, as a
prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs; and
(v) any action taken by the Property Trustee or its agents hereunder
shall bind the Holders of the Securities, and the signature of the
Property Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be required to inquire
as to the authority of the Property Trustee to so act, or as to its
compliance with any of the terms and provisions of this Declaration, both
of which shall be conclusively evidenced by the Property Trustee's or its
agent's taking such action.
(d) The recitals contained herein shall be taken as the statements of the
Sponsor, and the Property Trustee assumes no responsibility for the correctness
of the same. The Property Trustee makes no representations as to the validity or
sufficiency of this Declaration.
(e) The Property Trustee, in its individual or any other capacity, may become
the owner or pledgee of Preferred Securities and may otherwise deal with the
Sponsor with the same rights it would have if it were not the Property Trustee.
(f) All moneys received by the Property Trustee shall, until used or applied as
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herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
law. The Property Trustee shall be under no liability for interest on any moneys
received by it hereunder except such as it may agree in writing to pay thereon.
(g) (i) The Sponsor covenants and agrees to pay to the Property Trustee from
time to time, and the Property Trustee shall be entitled to, such compensation
as the Sponsor and the Property Trustee shall from time to time agree in writing
(which shall not be limited by any provision of law in regard to the
compensation of a Property Trustee of an express trust) for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Property
Trustee, and the Sponsor will pay or reimburse the Property Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee in accordance with any of the provisions of this
Declaration (including the reasonable compensation and the reasonable expenses
and disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Sponsor also covenants to indemnify each of the
Property Trustee or any predecessor Property Trustee and their officers, agents,
directors and employees for, and to hold them harmless against, any and all
loss, liability, damage, claim or expense including taxes (other than taxes
based upon, measured by or determined by the income of the Property Trustee)
incurred without negligence or bad faith on the part of the Property Trustee and
arising out of or in connection with the acceptance or administration of this
trust, including the reasonable costs and expenses of defending itself against
any claim (whether asserted by the Sponsor, any Holder or any other Person) of
liability in the premises. The provisions of this subpart (g) of this Section
3.12 shall survive the termination of this Declaration and resignation or
removal of the Property Trustee.
(ii) The obligations of the Sponsor under this subpart (g) of this
Section 3.12 to compensate and indemnify the Property Trustee and to pay
or reimburse the Property Trustee for expenses, disbursements and
advances shall constitute additional indebtedness hereunder. Such
additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Property
Trustee as such, except funds held in trust for the benefit of the
holders of particular Securities.
(h) Except as otherwise provided in this Section 3.12, whenever in the
administration of the provisions of this Declaration the Property Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting to take any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Property
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Property Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Property Trustee, shall be
full warrant to the Property Trustee for any action taken, suffered or omitted
to be taken by it under the provisions of this Declaration upon the faith
thereof.
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(i) Whether or not expressly stated, every provision of this Declaration
pertaining to the Property Trustee shall be subject to this Section 3.12.
Section 3.13. Registration Statement and Related Matters.
In accordance with the Original Declaration, Litchfield Financial, as the
sponsor of the Trust, was authorized (i) to file with the Commission and
execute, in each case on behalf of the Trust, (a) the Registration
Statement on Form S-3 (File No. 333-______) (the "1933 Act Registration
Statement") including any pre-effective or post-effective amendments
thereto, relating to the registration under the Securities Act of the
Preferred Securities and (b) if Litchfield Financial shall deem it
desirable, a Registration Statement on Form 8-A or other appropriate form
(the "1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Preferred Securities under Section 12 of the Exchange Act; (ii) if
Litchfield Financial shall deem it desirable, to prepare and file with
the New York Stock Exchange or one or more national securities
exchange(s) (each, an "Exchange") or the National Association of
Securities Dealers, Inc. (the "NASD") and execute on behalf of the Trust
a listing application or applications and all other applications,
statements, certificates, agreements and other instruments as shall be
necessary or desirable to cause the Preferred Securities to be listed on
any such Exchange or The Nasdaq National Market ("Nasdaq"); (iii) to file
and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of
process and all other papers and documents as Litchfield Financial, on
behalf of the Trust, may deem necessary or desirable to register the
Preferred Securities under the securities or "Blue Sky" laws of such
jurisdictions as Litchfield Financial on behalf of the Trust, may deem
necessary or desirable; and (iv) to negotiate the terms and execute on
behalf of the Trust the Underwriting Agreement. In the event that any
filing referred to in clauses (i)-(iii) above is required by the rules
and regulations of the Commission, any Exchange, Nasdaq, the NASD or
state securities or blue sky laws, to be executed on behalf of the Trust
by one or more Trustees, the Regular Trustees, in their capacities as
Trustees of the Trust, and Litchfield Financial are hereby authorized and
directed to join in any such filing and to execute on behalf of the Trust
any and all of the foregoing. In connection with all of the foregoing,
Litchfield Financial and each Trustee, solely in its capacity as Trustee
of the Trust, have constituted and appointed, and hereby confirm the
appointment of, ______________, ___________, and _____________ and each
of them, as his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for Litchfield Financial or such Trustee or in Litchfield
Financial's or such Trustee's name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to the 1933 Act Registration Statement and the 1934 Act
Registration Statement and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Commission,
granting unto said attorneys-in-fact and agents full power and authority
to do and perform each and every act and thing requisite and necessary to
be done in connection therewith, as fully to all intents and purposes as
Litchfield Financial or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-
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in-fact and agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Section 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the
State of Delaware on [ ], 1999 is attached hereto as Exhibit A. On or
after the date of execution of this Declaration, the Trustees shall cause
the filing with the Secretary of State of the State of Delaware of such
amendments, if any, to the Certificate of Trust as the Trustees shall
deem necessary or desirable.
Section 3.15. Execution of Documents by the Regular Trustees.
Except as otherwise required by the Business Trust Act with respect to
the Certificate of Trust or otherwise and except as provided in Sections
7.01(c) and 9.08, any Regular Trustee, or if there is only one, such
Regular Trustee is authorized to execute and deliver on behalf of the
Trust any documents which the Regular Trustees have the power and
authority to execute or deliver pursuant to this Declaration.
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust
or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the Securities.
Section 3.17. Duration of the Trust.
The Trust, absent dissolution pursuant to the provisions of Article 8
hereof, shall continue without dissolution until June 30, 2019.
Section 3.18. Mergers.
(a) The Trust may not merge with or into, convert into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except
as described in Section 3.18(b) and (c) of this Declaration or Section 3
of Exhibit B or Exhibit C.
(b) The Trust may, at the request of the Sponsor, with the consent of the
Regular Trustees or, if there are more than two, a majority of the
Regular Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge with or into, convert into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease
its properties and assets
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as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under the
Securities and this Declaration; or
(B) substitutes for the Securities other securities having substantially
the same terms as the Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Securities rank with
respect to Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity
that possesses the same powers and duties as the Property Trustee as the
holder of the Debentures;
(iii) the Successor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or with another organization in which the Preferred Securities
are then listed or quoted, if any;
(iv) if the Preferred Securities (including any Successor Securities) are
rated by any nationally recognized statistical rating organization prior
to such transaction, such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause
the Preferred Securities (including any Successor Securities), or if the
Debentures are so rated, the Debentures, to be downgraded by any
nationally recognized statistical rating organization;
(v) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of any
Successor Securities) in any material respect (other than with respect to
any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose substantially identical to that
of the Trust;
(vii) prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received an
Opinion of Counsel experienced in such matters that:
(A) such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of any
Successor Securities) in any material respect (other than with respect to
any dilution of the Holders' interest in the new entity);
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(B) following such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an Investment Company;
and
(C) following such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for United
States Federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee owns all of the
common securities of such Successor Entity and guarantees the obligations
of such Successor Entity under the Successor Securities at least to the
extent provided by the Preferred Guarantee; and
(ix) there shall have been furnished to the Property Trustee an Officers'
Certificate and an Opinion of Counsel, each to the effect that all
conditions precedent in this Declaration to such transaction have been
satisfied.
(c) Notwithstanding Section 3.18(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, convert into, or be replaced
by, or convey, transfer or lease its properties and assets as an entirety
or substantially as an entirety to, any other Person or permit any other
Person to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the Successor
Entity not to be classified as a grantor trust for United States Federal
income tax purposes or would cause the Holders of the Securities not to
be treated as owning an undivided interest in the Debentures.
Section 3.19. Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor
or their creditors, the Property Trustee (irrespective of whether any
Distributions on the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Property Trustee shall have made any demand on the Trust for the payment
of any past due Distributions) shall be entitled and empowered, to the
fullest extent permitted by law, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation
amount as may be specified in the terms of such 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
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and advances of the Property Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or compensation affecting the Securities
or the rights of any Holder thereof to authorize the Property Trustee to vote in
respect of the claim of any Holder in any such proceeding.
ARTICLE 4
Sponsor
Section 4.01. Purchase of Common Securities by the Sponsor.
On the Closing Date, the Sponsor will purchase all of the Common
Securities issued by the Trust at the same time as the Preferred
Securities to be issued on such date are issued, such purchase to be in
an amount equal to 3% of the total capital of the Trust.
Section 4.02. Expenses.
(a) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, shall be
responsible for and shall pay for all debts and obligations (other than
with respect to the Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the
organization of the Trust, the issuance of the Preferred Securities to
initial purchasers thereof, the fees and expenses (including reasonable
counsel fees and expenses) of the Trustees (including any amounts payable
under Article 10), the costs and expenses relating to the operation of
the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the disposition of Trust assets).
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(b) In connection with the purchase of the Debentures by the Trust, the
Sponsor, in its capacity as Sponsor and not as a Holder, will pay any and
all taxes (other than United States withholding taxes attributable to the
Trust or its assets) and all liabilities, costs and expenses with respect
to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such
debts, obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. Any such
Creditor may enforce the Sponsor's obligations under this Section 4.02
directly against the Sponsor and the Sponsor irrevocably waives any right
or remedy to require that any such Creditor take any action against the
Trust or any other Person before proceeding against the Sponsor.
(d) The Sponsor shall be subrogated to all (if any) rights of the Trust
in respect of any amounts paid to any Creditor by the Sponsor under this
Section 4.02.
ARTICLE 5
Trustees
Section 5.01. Number of Trustees; Qualifications.
(a) The number of Trustees initially shall be five (5). At any time (i)
before the issuance of the Securities, the Sponsor may, by written
instrument, increase or decrease the number of, and appoint, remove and
replace, the Trustees, and (ii) after the issuance of the Securities the
number of Trustees may be increased or decreased solely by, and Trustees
may be appointed, removed or replaced solely by, vote of Holders of
Common Securities representing a Majority in liquidation amount of the
Common Securities voting as a class; provided that in any case:
(1) the number of Trustees shall be at least five (5) unless the Trustee
that acts as the Property Trustee also acts as the Delaware Trustee, in
which case the number of Trustees shall be at least four (4);
(2) at least a majority of the Trustees shall at all times be officers,
directors or employees of Litchfield Financial;
(3) if required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be either a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the laws of the State of
Delaware, except that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise is permitted to act as a
Trustee hereunder under the laws of the State of Delaware, then the
Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application; and
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(4) there shall at all times be a Property Trustee hereunder which shall
satisfy the requirements of Section 5.01(c).
Each Trustee shall be either a natural person at least 21 years of age or a
legal entity which shall act through one or more duly appointed representatives.
(b) The initial Regular Trustees shall be:
John J. Malloy, Heather A. Sica and Ronald E. Rabidou
c/o LITCHFIELD FINANCIAL CORPORATION, 430 Main Street, Williamstown,
Massachusetts 01267
(c) There shall at all times be one Trustee which shall act as the Property
Trustee. In order to act as the Property Trustee hereunder, such Trustee shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation or national banking association organized and
doing business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation, national
banking association or Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation or national
banking association publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 5.01(c)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an Investment
Company solely by reason of Rule 3a-7 and to the extent Rule 3a-7 requires a
trustee having certain qualifications to hold title to the "eligible assets" (as
defined in Rule 3a-7) of the Trust, the Property Trustee shall possess those
qualifications.
If at any time the Property Trustee shall cease to satisfy the requirements of
clauses (i)-(iii) above, the Property Trustee shall immediately resign in the
manner and with the effect set out in Section 5.02(d). If the Property Trustee
has or shall acquire any "conflicting interest" within the meaning of (S) 310(b)
of the Trust Indenture Act, the Property Trustee and the Holders of the Common
Securities (as if such Holders were the obligor referred to in (S) 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of (S)
310(b) of the Trust Indenture Act. The
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Preferred Guarantee and the Indenture shall be deemed to be specifically
described in this Declaration for the purposes of clause (i) of the first
proviso contained in (S) 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Property Trustee is The Bank of New
York, a New York banking corporation, whose address is as set forth in Section
14.01(b).
(d) The initial Trustee which shall serve as the Delaware Trustee is The
Bank of New York (Delaware), a Delaware banking corporation, whose
address is as set forth in Section 14.01(c).
(e) Any action taken by the Holders of Common Securities pursuant to this
Article 5 shall be taken at a meeting of the Holders of Common Securities
convened for such purpose or by written consent as provided in Section
12.02.
(f) No amendment may be made to this Section 5.01 which would change any
rights with respect to the number, existence or appointment and removal
of Trustees, except with the consent of each Holder of Common Securities.
Section 5.02. Appointment, Removal and Resignation of the Trustees.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of the Securities, by written instrument executed
by the Sponsor; and
(ii) after the issuance of the Securities by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a
class.
(b) (i) The Trustee that acts as the Property Trustee shall not be
removed in accordance with Section 5.02(a) until a successor Trustee
possessing the qualifications to act as the Property Trustee under
Section 5.01(c) (a "Successor Property Trustee") has been appointed and
has accepted such appointment by written instrument executed by such
Successor Property Trustee and delivered to the Regular Trustees, the
Sponsor and the Property Trustee being removed; and
(ii) the Trustee that acts as the Delaware Trustee shall not be removed
in accordance with Section 5.02(a) until a successor Trustee possessing
the qualifications to act as the Delaware Trustee under Section
5.01(a)(3) (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees, the
Sponsor and the Delaware Trustee being removed.
(c) A Trustee appointed to office shall hold such office until his
successor shall have been appointed or until his death, removal or
resignation.
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(d) Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "Resignation Request") in
writing signed by the Trustee and delivered to the Sponsor and the Trust,
which resignation shall take effect upon such delivery or upon such later
date as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the Property Trustee
shall be effective until:
(A) a Successor Property Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor Property Trustee and
delivered to the Regular Trustees, the Sponsor and the resigning Property
Trustee; or
(B) if the Trust is excluded from the definition of an Investment Company
solely by reason of Rule 3a-7, until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the Holders
of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware Trustee
shall be effective until a Successor Delaware Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees, the
Sponsor and the resigning Delaware Trustee.
(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section
5.02 within 60 days after delivery of a notice of removal or a
Resignation Request, the Property Trustee or Delaware Trustee being
removed or resigning as the case may be may petition, at the expense of
the Sponsor, any court of competent jurisdiction for appointment of a
Successor Property Trustee or Successor Delaware Trustee, as the case may
be. Such court may thereupon after prescribing such notice, if any, as it
may deem proper and prescribe, appoint a Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
Section 5.03. Vacancies among the Trustees.
If a Trustee ceases to hold office for any reason and the number of Trustees is
not reduced pursuant to Section 5.01 or if the number of Trustees is increased
pursuant to Section 5.01, a vacancy shall occur. A resolution certifying the
existence of such vacancy by a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with the requirements of this
Article 5.
Section 5.04. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee, or
any one of them, shall not operate to dissolve, terminate or annul the Trust.
Whenever a vacancy in the number of Regular Trustees shall occur until such
vacancy is filled as provided in this Article 5, the Regular Trustees in office,
regardless of their
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number, shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Declaration.
Section 5.05. Meetings.
Meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meeting of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meeting of the Regular Trustees or any committee thereof shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before such meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Regular Trustee
at a meeting shall constitute a waiver of notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless otherwise provided in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees.
Section 5.06. Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purpose of executing any registration statement or amendment thereto
or other document or schedule filed with the Commission or making any other
governmental filing (including, without limitation, the filings referred to
in Section 3.13).
(b) The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the
names of the
Regular Trustees or otherwise as the Regular Trustees may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
Section 5.07. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee or any
Regular Trustee that is not a natural person, as the case may be, may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the
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Property Trustee or the Delaware Trustee or the Regular Trustees, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
of the corporate trust business of the Property Trustee or the Delaware Trustee
or the Regular Trustee, as the case may be, shall be the successor of the
Property Trustee or the Delaware Trustee or the Regular Trustees, as the case
may be, hereunder, provided that such Person shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
ARTICLE 6
Distributions
Section 6.01. Distributions.
Holders shall receive periodic distributions, redemption payments and
liquidation distributions in accordance with the applicable terms of the
relevant Holder's Securities as set forth in Exhibits B and C hereto
("Distributions"). If and to the extent that Litchfield Financial makes a
payment of interest (including Additional Interest (as defined in the
Indenture)), premium and/or principal on the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall and is directed, to the extent funds are available for that
purpose, to promptly make a Distribution of the Payment Amount to Holders in
accordance with the terms of the Securities as set forth in Exhibits B and C
hereto.
ARTICLE 7
Issuance of the Securities
Section 7.01. General Provisions Regarding the Securities.
(a) The Regular Trustees shall issue on behalf of the Trust Securities in fully
registered form representing undivided beneficial interests in the assets of the
Trust in accordance with Section 7.01(b) and for the consideration specified in
Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one class of
preferred securities representing preferred undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Exhibit B (the
"Preferred Securities") hereto, which terms are incorporated by reference in,
and made a part of, this Declaration as if specifically set forth herein, and
one class of common securities representing common undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Exhibit C (the "Common Securities") hereto, which terms are incorporated by
reference in, and made a part of, this Declaration as if specifically set forth
herein. The Trust shall have no securities or other interests in the assets of
the Trust other than the Preferred Securities and the Common Securities.
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(c) The Certificates shall be signed on behalf of the Trust by one or more of
the Regular Trustees. Such signatures may be the manual or facsimile
signatures of the present or any future Regular Trustee. Typographical and
other minor errors or defects in any such reproduction of any such signature
shall not affect the validity of any Certificate. In case any Regular Trustee
who shall have signed any of the Certificates shall cease to be such Regular
Trustee before the Certificate so signed shall be delivered by the Trust,
such Certificate nevertheless may be delivered as though the person who
signed such Certificate had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons as, at the
actual date of the execution of such Certificate, shall be the Regular
Trustees, although at the date of the execution and delivery of this
Declaration any such person was not a Regular Trustee. Certificates shall be
typewritten, printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by one or more of their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as
may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or
automated quotation system on which Securities may be listed or traded, or
with any rule or regulation of the Clearing Agency, or to conform to usage.
Pending the preparation of definitive Certificates, one or more of the
Regular Trustees on behalf of the Trust may execute temporary Certificates
(printed, lithographed or typewritten), in substantially the form of the
definitive Certificates in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for temporary
Certificates, all as may be determined by the Regular Trustees. Each
temporary Certificate shall be executed by one or more of the Regular
Trustees on behalf of the Trust upon the same conditions and in substantially
the same manner, and with like effect, as definitive Certificates. Without
unnecessary delay, one or more of the Regular Trustees on behalf of the Trust
will execute and furnish definitive Certificates and thereupon any or all
temporary Certificates may be surrendered to the transfer agent and registrar
in exchange therefor (without charge to the Holders). Each Preferred Security
Certificate whether in temporary or definitive form shall be countersigned,
upon receipt of a written order of the Trust signed by one Regular Trustee,
by the manual signature of an authorized signatory of the Person acting as
registrar and transfer agent for the Preferred Securities, which shall
initially be the Property Trustee.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non- assessable.
(f) Every Person, by virtue of having become a Holder or a Preferred Security
Beneficial Owner in accordance with the terms of this Declaration, shall be
deemed to have expressly assented and agreed to the terms of, and shall be
bound by this Declaration.
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(g) Upon issuance of the Securities as provided in this Declaration, the
Regular Trustees on behalf of the Trust shall return to Litchfield Financial
the $10 constituting initial trust assets as set forth in the Original
Declaration.
ARTICLE 8
Dissolution of the Trust
Section 8.01. Dissolution of the Trust.
The Trust shall dissolve:
(i) when all of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders
of the Securities in accordance with the terms of the Securities; or
(ii) when all of the Debentures shall have been distributed to the Holders of
the Securities in exchange for all of the Securities in accordance with the
terms of the Securities;
(iii) upon the expiration of the term of the Trust as set forth in Section
3.17; or
(iv) upon a decree of judicial dissolution.
Upon dissolution and the completion of the winding up of the affairs of the
Trust, the Trust and this Declaration shall terminate when a certificate of
cancellation is filed by the Trustees with the Secretary of State of the State
of Delaware. The Trustees shall so file such a certificate as soon as
practicable after the occurrence of an event referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall survive the
termination of the Trust and this Declaration.
ARTICLE 9
Transfer of Interests
Section 9.01. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Declaration and in the terms
of the Securities. To the fullest extent permitted by law, any transfer or
purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(b) Subject to this Article 9, Preferred Securities shall be freely
transferable.
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(c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof 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.
Section 9.02. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates and
of transfers of Certificates, which will be effected without charge but only
upon payment (with such indemnity as the Regular Trustees may require) in
respect of any tax or other government charges which may be imposed in
relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to
be issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by
a written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees. A transferee of a Certificate shall be
entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by
this Declaration.
Section 9.03. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever
and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such Certificate or in the Securities represented by
such Certificate on the part of any Person, whether or not the Trustees shall
have actual or other notice thereof.
Section 9.04. Book Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities, the
Preferred Security Certificates, on original issuance, will be issued in the
form of one or more, fully registered, global Preferred Security Certificates
(each a "Global Certificate"), to be delivered to DTC, the initial Clearing
Agency, by, or on behalf of, the Trust. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Preferred Security Beneficial Owner
will receive a definitive Preferred Security Certificate representing such
Preferred Security Beneficial Owner's interests in such Global Certificates,
except as provided in Section 9.07. Unless and until definitive, fully
registered Preferred Security
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Certificates (the "Definitive Preferred Security Certificates") have been
issued to the Preferred Security Beneficial Owners pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full force and effect;
(ii) the Trust and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and, except as set forth herein in Section
9.07 or in Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7) with respect to the
Property Trustee, shall have no obligation to the Preferred Security
Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.04 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants. DTC
will make book entry transfers among the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants, provided, that solely for the purposes of
determining whether the Holders of the requisite amount of Preferred
Securities have voted on any matter provided for in this Declaration, so long
as definitive Preferred Security Certificates have not been issued (pursuant
to Section 9.07 hereof), the Trustees may conclusively rely on, and shall be
protected in relying on,
any written instrument (including a proxy) delivered to the Trustees by the
Clearing Agency setting forth the Preferred Security Beneficial Owners' votes or
assigning the right to vote on any matter to any other Persons either in whole
or in part.
Section 9.05. Notices to Holders of Certificates.
Whenever a notice or other communication to the Holders is required to be
given under this Declaration, unless and until Definitive Preferred Security
Certificates shall have been issued pursuant to Section 9.07, the relevant
Trustees shall give all such notices and communications, specified herein to
be given to Holders of Preferred Securities, to the Clearing Agency and, with
respect to any Preferred Security Certificate registered in the name of a
Clearing Agency or the nominee of a Clearing Agency, the Trustees shall,
except in Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7) with respect to the
Property Trustee, have no notice obligations to the Preferred Security
Beneficial Owners.
Section 9.06. Appointment of Successor Clearing Agency.
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If any Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities, the Regular Trustees
may, in their sole discretion, appoint a successor Clearing Agency with
respect to the Preferred Securities.
Section 9.07. Definitive Preferred Securities Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.06 or (ii) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the
Global Certificates by the Clearing Agency, accompanied by registration
instructions, the Regular Trustees shall cause Definitive Preferred Security
Certificates to be delivered to Preferred Security Beneficial Owners in
accordance with the instructions of the Clearing Agency. Neither the Trustees
nor the Trust shall be liable for any delay in delivery of such instructions
and each of them may conclusively rely on, and shall be protected in relying
on, such instructions.
Section 9.08. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity
as may be required by them to keep each of them harmless, then in the absence
of notice that such Certificate shall have been acquired by a bona fide
purchaser, one or more of the Regular Trustees on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under
this Section 9.08, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.01. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or
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omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such
Indemnified Person by this Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason
of such Indemnified Person's gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or
expert competence and who has been selected with reasonable care by or on
behalf of the Trust, including information, opinions, reports or statements
as to the value and amount of the assets, liabilities, profits, losses or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
Securities, in their capacities as Holders, shall be entitled to the same
limitation of liability that is extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
Section 10.02. Indemnification.
(a) To the fullest extent permitted by applicable law, the Sponsor shall
indemnify and hold harmless each Indemnified Person from and against any
loss, liability, expense, damage or claim incurred by such Indemnified Person
by reason of any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this Declaration, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, liability,
expense, damage or claim incurred by such Indemnified Person by reason of
gross negligence (or, in the case of the Property Trustee, negligence) or
willful misconduct with respect to such acts or omissions.
(b) The provisions of this Section 10.02 shall survive the termination of
this Declaration or the resignation or removal of any Trustee.
Section 10.03. Outside Business.
The Sponsor and any Trustee (in the case of the Property Trustee, subject to
Section 5.01(c)) may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar
or dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or
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improper. Neither the Sponsor nor any Trustee shall be obligated to present
any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken
by the Trust, and the Sponsor or any Trustee shall have the right to take for
its own account (individually or as a partner or fiduciary) or to recommend
to others any such particular investment or other opportunity. Any Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor or may act as depository for, trustee
or agent for, or act on any committee or body of holders of, securities or
other obligations of the Sponsor or any of its Affiliates.
ARTICLE 11
Accounting
Section 11.01. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.02. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular Trustees
shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted
accounting principles, consistently applied. The Trust shall use the accrual
method of accounting for United States Federal income tax purposes.
(b) If required by applicable law, the Regular Trustees shall, as soon as
available after the end of each Fiscal Year of the Trust, cause to be
prepared and mailed to each Holder of Securities unaudited financial
statements of the Trust for such Fiscal Year, prepared in accordance with
generally accepted accounting principles; provided that if the Trust is
required to comply with the periodic reporting requirements of Section 13(a)
or 15(d) of the Exchange Act, such financial statements for such Fiscal Year
shall be examined and reported on by a firm of independent certified public
accountants selected by the Regular Trustees (which firm may be the firm used
by the Sponsor).
(c) The Regular Trustees shall cause to be duly prepared and mailed to each
Holder of Securities any annual United States Federal income tax information
statement required by the Code, containing such information with regard to
the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year
of the Trust.
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(d) The Regular Trustees shall cause to be duly prepared and filed with the
appropriate taxing authority an annual United States Federal income tax
return, on such form as is required by the Code, and any other annual income
tax returns required to be filed by the Regular Trustees on behalf of the
Trust with any state or local taxing authority.
Section 11.03. Banking.
The Trust shall maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly
to the Property Account and no other funds from the Trust shall be deposited
in the Property Account. The sole signatories for such accounts shall be
designated by the Regular Trustees; provided, however, that the Property
Trustee shall designate the sole signatories for the Property Account.
Section 11.04. Withholding.
The Trust and the Trustees shall comply with all withholding requirements
under United States Federal, State and local law. The Regular Trustees shall
request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably
be requested by the Regular Trustees to assist them in determining the extent
of, and in fulfilling, the Trust's withholding obligations. The Trust shall
file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the
amount withheld shall be deemed to be a Distribution in the amount of the
withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount to be withheld was not withheld from a Distribution, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE 12
Amendments and Meetings
Section 12.01. Amendments.
(a) Except as otherwise provided in this Declaration or by any applicable
terms of the Securities, this Declaration may be amended by, and only by, a
written instrument executed by a majority of the Regular Trustees; provided,
however, that (i) no amendment or modification to this Declaration shall be
made, and any such purported amendment shall be void and ineffective: (A)
unless the Regular Trustees shall have first received: (x) an Officers'
Certificate that such amendment is permitted by, and conforms to, the terms
of this Declaration; and
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(y) an Opinion of Counsel that such amendment is permitted by, and conforms to,
the terms of this Declaration and that all conditions precedent, if any, in this
Declaration to the execution and delivery of such amendment have been satisfied;
and (B) to the extent the result of such amendment would be to: (x) cause the
Trust to fail to continue to be classified for purposes of United States Federal
income taxation as a grantor trust; (y) reduce or otherwise adversely affect the
rights or powers of the Property Trustee in contravention of the Trust Indenture
Act; or (z) cause the Trust to be deemed to be an Investment Company required to
be registered under the Investment Company Act; (ii) at such time after the
Trust has issued any Securities which remain outstanding, any amendment which
would adversely affect the rights, privileges or preferences of any Holder of
Securities may be effected only with such additional requirements as may be set
forth in the terms of such Securities; (iii) Section 4.02, Section 9.01(c) and
this Section 12.01 shall not be amended without the consent of all of the
Holders of the Securities; (iv) no amendment which adversely affects the rights,
powers and privileges of the Property Trustee or the Delaware Trustee shall be
made without the consent of the Property Trustee or the Delaware Trustee,
respectively; (v) Article 4 shall not be amended without the consent of the
Sponsor; and (vi) the rights of the Holders of Common Securities under Article 5
to increase or decrease the number of, and to appoint, replace or remove,
Trustees shall not be amended without the consent of each Holder of Common
Securities.
(b) Notwithstanding Section 12.02(a), this Declaration may be amended without
the consent of the Holders of the Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Declaration that may be defective
or inconsistent with any other provision of this Declaration, (iii) add to
the covenants, restrictions or obligations of the Sponsor, (iv) conform to
any changes in Rule 3a-7 (if the Trust is excluded from the definition of an
Investment Company solely by reason of Rule 3a-7) or any change in
interpretation or application of Rule 3a-7 (if the Trust is excluded from the
definition of an Investment Company solely by reason of Rule 3a-7) by the
Commission, (v) make any other provisions with respect to matters or
questions arising under this Declaration which shall not be inconsistent with
the other provisions of this Declaration, (vi) modify, eliminate or add to
any provisions of this Declaration to such extent as shall be necessary to
ensure that the Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Securities are outstanding
or to ensure that the Trust will not be required to register as an Investment
Company under the Investment Company Act, and (vii) pursuant to Section 5.02,
evidence the acceptance of the appointment of a successor Trustee or fill a
vacancy created by an increase in the number of Regular Trustees, which
amendment does not adversely affect in any material respect the rights,
preferences or privileges of the Holders.
Section 12.02. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of Preferred Securities and/or Common Securities
may be called at any time by the Regular Trustees (or as provided in the
terms of the Securities) to consider and act on any matter on which the
Holders of such class of Securities are entitled to act under the terms of
this Declaration, the terms of the Securities or the rules of any stock
exchange or automated quotation system on which the Preferred Securities are
then listed, traded or quoted. The Regular Trustees shall call a meeting of
the Holders of Preferred Securities or Common Securities, if
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directed to do so by Holders of at least 10% in liquidation amount of such
class of Securities. Such direction shall be given by delivering to the
Regular Trustees one or more notices in writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates held
by the Holders of Securities exercising the right to call a meeting and only
those specified Certificates shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provision shall apply to meetings of the Holders of Securities:
(i) Notice of any such meeting shall be given by mail to all the Holders of
Securities having a right to vote thereat not less than seven (7) days nor
more than sixty (60) days prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock exchange or automated
quotation system on which the Preferred Securities are then listed, traded or
quoted, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting and without prior notice
if a consent in writing setting forth the action so taken is signed by
Holders of Securities owning not less than the minimum aggregate liquidation
amount of Securities that would be necessary to authorize or take such action
at a meeting at which all Holders of Securities having a right to vote
thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Securities entitled to
vote who have not consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Holders of Securities for the purpose of
taking any action without a meeting shall be returned to the Trust within the
time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act for it by
proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of the Security
executing it. Except as otherwise provided herein or in the terms of the
Securities, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be conducted by the
Regular Trustees or by such other Person that the Regular Trustees may
designate.
(iv) Unless otherwise provided in the Business Trust Act, this Declaration or
the rules of any stock exchange or automated quotation system on which the
Preferred Securities are then listed, traded or quoted, the Regular Trustees,
in their sole discretion, shall establish all other provisions relating
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to meetings of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any Holders
of Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements, voting in
person or by proxy or any other matter with respect to the exercise of any
such right to vote.
ARTICLE 13
Representations of the Property Trustee and the Delaware Trustee
Section 13.01. Representations and Warranties of the Property Trustee.
The Trustee which acts as the initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as the Property Trustee that:
(i) The Property Trustee is a national banking association or a banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the United States or the laws of the state of its
incorporation, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Property Trustee of this
Declaration have been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and
to general principles of equity and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a proceeding in
equity or at law).
(iii) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter
or by-laws of the Property Trustee.
(iv) No consent, approval or authorization of, or registration with or notice
to, any banking authority which supervises or regulates the Property Trustee
is required for the execution, delivery or performance by the Property
Trustee of this Declaration.
(v) The Property Trustee satisfies the qualifications set forth in Section
5.01(c).
Section 13.02. Representations and Warranties of the Delaware Trustee.
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The Trustee which acts as the initial Delaware Trustee represents and
warrants to the Trust and the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as the Delaware Trustee, that:
(i) The Delaware Trustee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, with corporate
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration.
(ii) The execution, delivery and performance by the Delaware Trustee of this
Declaration have been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. This Declaration has been duly executed and
delivered by the Delaware Trustee and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors' rights generally and
to general principles of equity and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a proceeding in
equity or at law).
(iii) No consent, approval or authorization of, or registration with or
notice to, any banking authority which supervises or regulates the Delaware
Trustee, if any, is required for the execution, delivery or performance by
the Delaware Trustee of this Declaration.
(iv) The Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware and is a Person that satisfies for
the Trust (S) 3807(a) of the Business Trust Act.
ARTICLE 14
Miscellaneous
Section 14.01. Notices.
All notices provided for in this Declaration shall be in writing, duly signed
by the party giving such notice, and shall be delivered, telecopied or mailed
by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the Trust's
mailing address set forth below (or such other address as the Regular
Trustees on behalf of the Trust may give notice of to the Holders of the
Securities):
Litchfield Capital Trust I c/o Litchfield Financial Corporation, 430 Main
Street, Williamstown, MA 01267 Attention: Treasurer, Telecopy: (413) 458-1020
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(b) if given to the Property Trustee, at the mailing address of the Property
Trustee set forth below (or such other address as the Property Trustee may
give notice of to the Holders of the Securities):
101 Barclay Street Floor 21 West New York, New York 10286 Attention:
Corporate Trust Trustee Administration Telecopy: (212) 815-5915
(c) if given to the Delaware Trustee, at the mailing address of the Delaware
Trustee set forth below (or such other address as the Delaware Trustee may
give notice of to the Holders of the Securities):
White Clay Center Route 273 Newark, Delaware 19711 Attention: Corporate Trust
Department
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice of to the Trust):
Litchfield Financial Corporation, 430 Main Street, Williamstown,
Massachusetts 01267, Attention: Treasurer, Telecopy: (413) 458-1020
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
A copy of any notice to the Property Trustee or the Delaware Trustee shall
also be sent to the Trust. All notices shall be deemed to have been given,
when received in person, telecopied with receipt confirmed, or mailed by
first class mail, postage prepaid except that if a notice or other document
is refused delivery or cannot be delivered because of a changed address of
which no notice was given, such notice or other document shall be deemed to
have been delivered on the date of such refusal or inability to deliver.
Section 14.02. Undertaking for Costs.
All parties to this Declaration agree, and each Holder of any Securities by
his or her acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right
or remedy under this Declaration, or in any suit against the Property Trustee
for any action taken or omitted by it as Property Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 1402
shall not apply to any suit instituted by the Property Trustee, to any suit
instituted by any Holder of Preferred Securities, or group of Holders of
Preferred Securities, holding more than 10% in aggregate liquidation amount
of the outstanding Preferred Securities, or to any suit instituted by any
Holder of Preferred Securities for the enforcement of the payment of the
principal of (or premium, if any) or interest on the Debentures, on or after
the respective due dates expressed in such Debentures.
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Section 14.03. Governing Law.
This Declaration, the Securities and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State
of Delaware and all rights and remedies shall be governed by such laws
without regard to principles of conflict of laws.
Section 14.04. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or
any provision hereof.
Section 14.05. Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to Persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.06. Counterparts.
This Declaration may contain more than one counterpart of the signature pages
and this Declaration may be executed by the affixing of the signature of the
Sponsor and each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed
a single signature page.
Section 14.07. Intention of the Parties.
It is the intention of the parties hereto that the Trust not be classified
for United States Federal income tax purposes as an association taxable as a
corporation or partnership but that the Trust be treated as a grantor trust
for United States federal income tax purposes. The provisions of this
Declaration shall be interpreted to further this intention of the parties.
Section 14.08. Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included,
and all covenants and agreements in this Declaration by the Sponsor and the
Trustees shall bind and inure to the benefit of their respective successors
and assigns, whether so expressed.
Section 14.09. No Recourse.
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The Trust's obligations hereunder are intended to be the obligations of the
Trust and no recourse for the payment of Distributions, or for any claim upon
the Securities or otherwise in respect thereof, shall be had against any Holder
of Securities or any Affiliate of a Holder of Securities, solely by reason of
such Person's being a Holder of Securities or an Affiliate of a Holder of
Securities, it being understood that the Holder of Securities, solely by reason
of being a Holder of Securities, has limited liability (in accordance with the
provisions of the Business Trust Act) for the liabilities and obligations of the
Trust. Nothing contained in this Section 14.09 shall be construed to limit the
exercise or enforcement, in accordance with the terms of this Declaration, the
Preferred Guarantee and the Indenture, of the rights and remedies against the
Trust or the Sponsor.
IN WITNESS WHEREOF, the undersigned has caused these presents to be executed as
of the day and year first above written.
LITCHFIELD FINANCIAL CORPORATION,
as Sponsor
By:
------------------------------
Name:
Title:
---------------------------------------
Ronald E. Rabidou, as Regular Trustee
---------------------------------------
Heather A. Sica, as Regular Trustee
---------------------------------------
John J. Malloy, as Regular Trustee
THE BANK OF NEW YORK,
as Property Trustee
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:------------------------------------
Name:
Title:
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EXHIBIT A
CERTIFICATE OF TRUST
OF
LITCHFIELD CAPITAL TRUST I
THIS CERTIFICATE OF TRUST of Litchfield Capital Trust I (the "Trust"), dated as
of April ___, 1999, is being duly executed and filed by the undersigned, as
trustees, with the Secretary of State of the State of Delaware to form a
business trust under the Delaware Business Trust Act (12 Del. Code (S) 3801 et
seq.).
1. Name. The name of the business trust being formed hereby is Litchfield
Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), a Delaware banking corporation, White Clay
Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective at the time
of its filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust at the time of filing this Certificate of Trust, have executed this
Certificate of Trust as of the date first above written.
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity, but solely
as Delaware Trustee
By:___________________________________________________
Name:
Title:
THE BANK OF NEW YORK,
not in its individual capacity but solely
as Property Trustee
By:___________________________________________________
Name:
Title:
JOHN J. MALLOY
not in his individual capacity but solely
as Regular Trustee
______________________________________________________
HEATHER A. SICA,
not in her individual capacity but solely
as Regular Trustee
______________________________________________________
RONALD E. RABIDOU,
not in his individual capacity but solely
as Regular Trustee
______________________________________________________
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EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust of
Litchfield Capital Trust I dated as of ____________, ____ (as amended from time
to time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Preferred Securities of the Trust
with an aggregate liquidation amount at any time outstanding with respect to the
assets of the Trust of ___________________________________________ Dollars
($___________), and each with a liquidation amount with respect to the assets of
the Trust of $10 per Preferred Security, and __________ (__________) Preferred
Securities of the Trust with an aggregate liquidation amount at any time
outstanding with respect to the assets of the Trust of _________ Dollars
($_________) and each with a liquidation amount with respect to the assets of
the Trust of $10 per Preferred Security for issuance upon the exercise of the
option granted to the Underwriter solely to cover over-allotments, if any, are
hereby designated as "____% Series A Trust Preferred Securities,". The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form attached hereto as Annex I, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange or automated quotation system
on which the Preferred Securities are then listed, traded or quoted. In
connection with the issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase as trust assets Debentures of Litchfield
Financial having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities so
issued and bearing interest at an annual rate equal to the annual Distribution
rate on the Preferred Securities and the Common Securities and having payment
and redemption provisions which correspond to the payment and redemption
provisions of the Preferred Securities and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Preferred Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $10 per Preferred Security, such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one calendar quarter will accumulate additional
distributions thereon at the Coupon Rate per annum (to the extent permitted by
applicable law), compounded quarterly. The term "Distributions" as used herein
means such periodic cash distributions and any such additional distributions
payable unless otherwise stated. A Distribution will be made by the Property
Trustee only to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee and to the extent the Trust has funds on
hand legally available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
(b) Distributions on the Preferred Securities will accumulate from
___________, _____ and will be payable quarterly in arrears, on ______,
______, _____ and _____ of each year, commencing
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on ________________, ____, except as otherwise described below, but only if
and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as Litchfield Financial
shall not be in default in the payment of interest on the Debentures,
Litchfield Financial has the right under the Indenture for the Debentures to
defer payments of interest on the Debentures by extending the interest
payment period at any time and from time to time on the Debentures for a
period not exceeding 20 consecutive quarterly interest periods (each, an
"Extension Period"), during which Extension Period no interest shall be due
and payable on the Debentures. As a consequence of such deferral,
Distributions shall also be deferred. Despite such deferral, Distributions
will continue to accumulate with additional distributions thereon (to the
extent permitted by applicable law but not at a rate greater than the rate at
which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly during any such Extension Period; provided that no
Extension Period shall extend beyond the stated maturity of the Debentures.
Prior to the termination of any such Extension Period, Litchfield Financial
may further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed
20 consecutive quarterly interest periods. Upon the termination of any
Extension Period and the payment of all amounts then due, Litchfield
Financial may commence a new Extension Period, subject to the above
requirements. Payments of accumulated Distributions will be payable to
Holders of Preferred Securities as they appear on the books and records of
the Trust on the first record date after the end of the Extension Period.
(c) Distributions on the Preferred Securities will be payable promptly by the
Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates shall be
one business day prior to the relevant Distribution date, and if the
Preferred Securities are no longer in book-entry only form, the relevant
record dates will be the fifteenth (15th) day of the month prior to the
relevant Distribution date, which record and payment dates correspond to the
record and interest payment dates on the Debentures. Distributions payable on
any Preferred Securities that are not punctually paid on any Distribution
payment date as a result of Litchfield Financial' having failed to make the
corresponding interest payment on the Debentures will forthwith cease to be
payable to the Person in whose name such Preferred Security is registered on
the relevant record date, and such defaulted Distribution will instead be
payable to the person in whose name such Preferred Security is registered on
the special record date established by the Regular Trustees, which record
date shall correspond to the special record date or other specified date
determined in accordance with the Indenture; provided, however, that
Distributions shall not be considered payable on any Distribution payment
date falling within an Extension Period unless Litchfield Financial has
elected to make a full or partial payment of interest accrued on the
Debentures on such Distribution payment date. Subject to any applicable laws
and regulations and the provisions of the Declaration, each payment in
respect of the Preferred Securities will be made as described in paragraph 8
hereof. If any date on which Distributions are payable on the Preferred
Securities is not a Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on
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the immediately preceding Business Day, in each case with the same force and
effect as if made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Preferred Securities and the
Common Securities will be paid Pro Rata (as defined below) to the Holders
thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held by or for the
Trust that is not accounted for under the Declaration, such money or property
shall be distributed Pro Rata among the Holders of the Preferred Securities
and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any voluntary
or involuntary dissolution of the Trust, the Holders of the Preferred Securities
and the Common Securities will be entitled to receive Pro Rata solely out of the
assets of the Trust legally available for distribution to Holders of Preferred
Securities and Common Securities after satisfaction of liabilities to the
creditors of the Trust, an amount equal to the aggregate of the stated
liquidation amount of $10 per Preferred Security and Common Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities and the Common Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on, such Preferred Securities and the Common Securities,
shall be distributed Pro Rata to the Holders of the Preferred Securities and the
Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets on hand legally available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct the
Property Trustee in writing at any time to dissolve the Trust and to
distribute Debentures to Holders in exchange for Securities (which direction
is optional and wholly within the discretion of the Holder of the Common
Securities). Upon the receipt of any such written direction, the Property
Trustee shall promptly (i) distribute Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which Debentures
bear accrued and unpaid interest in an amount equal to the accumulated and
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unpaid Distributions on the Preferred Securities and the Common Securities of
such Holder, in exchange for the Preferred Securities and Common Securities
of such Holder and (ii) dissolve the Trust.
(c) On the date fixed for any distribution of Debentures, upon dissolution of
the Trust, (i) the Preferred Securities will no longer be deemed to be
outstanding and may be canceled by the Regular Trustees, and (ii)
Certificates representing Preferred Securities will be deemed to represent
beneficial interests in the Debentures having an aggregate principal amount
equal to the stated liquidation amount of, and bearing accrued and unpaid
interest equal to accumulated and unpaid Distributions on, such Preferred
Securities until such Certificates are presented to Litchfield Financial or
its agent for transfer or reissuance.
(d) If Debentures are distributed to Holders of the Preferred Securities,
Litchfield Financial, pursuant to the terms of the Indenture, will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Preferred Securities were listed immediately
prior to the distribution of the Debentures.
4. REDEMPTION OF DEBENTURES. The Preferred Securities may be redeemed only if
Debentures having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and the Common Securities are
repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether at
maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60
days' notice, at a redemption price of $10 per Preferred Security and Common
Security plus an amount equal to accumulated and unpaid Distributions thereon
to, but excluding, the date of redemption, payable in cash (the "Redemption
Price"). The date of any such repayment or redemption of Preferred Securities
and Common Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Preferred Securities will be
redeemed as described in paragraph 4(f)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Litchfield Financial pursuant to the Indenture
will redeem Debentures only in whole and, as a result, the Trust may redeem
the Preferred Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each a "Special Event") shall occur and be
continuing, Litchfield Financial shall have the right at any time, upon not
less than 30 nor more than 60 days' notice, to redeem the Debentures in whole
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or in part for cash at the Redemption Price within 90 days following the
occurrence of such Special Event, and promptly following such redemption,
Preferred Securities and Common Securities with an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so redeemed
will be redeemed by the Trust at the Redemption Price on a Pro Rata basis.
The Common Securities will be redeemed Pro Rata with the Preferred
Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities will have a priority over the Common
Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Sponsor and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution
Tax Opinion") to the effect that on or after ____________, ____ as a result
of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein, (b) any
amendment to, or change in, an interpretation or application of any such laws
or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after _________, ____, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States Federal income tax with
respect to income accrued or received on the Debentures, (ii) the Trust is,
or will be within 90 days of the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges or (iii)
interest payable by Litchfield Financial to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by
Litchfield Financial for United States Federal income tax purposes.
"Investment Company Event" means that the Sponsor and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Preferred
Securities unless all accumulated and unpaid Distributions have been paid on
all Preferred Securities for all quarterly Distribution periods terminating
on or prior to the date of redemption.
(e) [Intentionally omitted.]
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(f) (i) Notice of any redemption of, or notice of distribution of Debentures
in exchange for, the Preferred Securities and the Common Securities (a
"Redemption/Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of
the calculation of the date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(f)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first- class mail, postage prepaid, to Holders of
Preferred Securities and Common Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of Preferred Securities and Common
Securities at the address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding Preferred Securities
are to be redeemed, the Preferred Securities to be redeemed will be redeemed
Pro Rata from each Holder of Preferred Securities, it being understood that,
in respect of Preferred Securities registered in the name of and held of
record by DTC (or successor Clearing Agency) or any other nominee, the
Preferred Securities will be redeemed from, and the distribution of the
proceeds of such redemption will be made to, DTC (or successor Clearing
Agency).
(iii) Subject to paragraph 8 hereof, if the Trust gives a
Redemption/Distribution Notice in respect of a redemption of Preferred
Securities as provided in this paragraph 4 then (A) while the Preferred
Securities are in book-entry only form, with respect to the Preferred
Securities, by 10:00 a.m., New York City time, on the redemption date,
provided that Litchfield Financial has paid the Property Trustee, in
immediately available funds, a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Property Trustee
will deposit irrevocably with DTC (or successor Clearing Agency) funds
sufficient to pay the applicable Redemption Price with respect to the
Preferred Securities and will give DTC (or successor Clearing Agency)
irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Preferred Securities and (B) if the Preferred Securities are
issued in definitive form, with respect to the Preferred Securities and
provided that Litchfield Financial has paid the Property Trustee, in
immediately available funds, a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Property Trustee
will pay the relevant Redemption Price to the Holders of such Preferred
Securities by check mailed to the address of the relevant Holder appearing on
the books and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, if applicable, then immediately prior to the close of business on
the redemption date, Distributions will cease to accumulate on the Preferred
Securities called for redemption, such Preferred Securities will no longer be
deemed to be outstanding and all rights of Holders of such Preferred
Securities so called for redemption will cease, except the right of the
Holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Trustees nor the Trust
shall be required to register or cause to be registered the transfer of any
Preferred Securities which have been so called for redemption. If any
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date fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in respect of
Preferred Securities is improperly withheld or refused and not paid either by
the Property Trustee or by Litchfield Financial pursuant to the Preferred
Guarantee, Distributions on such Preferred Securities will continue to
accumulate, from the original redemption date to the date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on
behalf of the Trust to DTC or its nominee (or any successor Clearing Agency
or its nominee) if the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the Holders of the
Preferred Securities.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), Litchfield Financial or
any of its Affiliates may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by private
agreement.
5. VOTING RIGHTS. (a) Except as provided under paragraph 5(b) below and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Securities, whether
by way of amendment to the Declaration, other than as described in Section
12.01(b) of the Declaration, or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than as described in Section
8.01 of the Declaration, Section 3 of Exhibit B or Section 3 of Exhibit C,
then the Holders of outstanding Securities will be entitled to vote on such
amendment or proposal as a single class and such amendment or proposal shall
not be effective except with the approval of the Holders of Securities of at
least a Majority in liquidation amount of the Securities, voting together as
a single class; provided, however, that (A) if any amendment or proposal
referred to in clause (i) above would adversely affect only the Preferred
Securities or the Common Securities, then only the affected class of
Securities will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of at
least a Majority in liquidation amount of such class of Securities and (B)
amendments to the Declaration shall be subject to such further requirements
as are set forth in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
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with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States Federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees shall
not (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee of the Indenture (the "Debenture Trustee"), or
exercising any trust or power conferred on such Debenture Trustee with respect
to the Debentures, (ii) waive any past default that is waivable under Section
6.06 of the Indenture or (iii) exercise any right to rescind or annul a
declaration of acceleration of the maturity of the principal of the Debentures,
without, in each case, obtaining the prior approval of the Holders of a Majority
in liquidation amount of all outstanding Preferred Securities and Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities except by
subsequent vote of such Holders. The Property Trustee shall notify each Holder
of Preferred Securities of any notice of default with respect to the Debentures.
In addition to obtaining the foregoing approvals of such Holders of the
Preferred Securities and Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an Opinion of Counsel experienced in such
matters to the effect that for United States Federal income tax purposes the
Trust will not be classified as other than a grantor trust on account of such
action.
If an Event of Default has occurred and is continuing, then the Holders of a
Majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Debentures. If the Property Trustee fails to enforce its rights
under the Debentures, a Holder of Preferred Securities, to the extent permitted
by applicable law, may, after a period of 30 days has elapsed since such
Holder's written request to the Property Trustee to enforce such rights,
institute a legal proceeding directly against the Sponsor to enforce the
Property Trustee's rights under the Debentures without first instituting any
legal proceeding against the Property Trustee or any other Person; provided
further, that, if an Event of Default has occurred and is continuing and such
event is attributed to the failure of the Sponsor to pay interest or principal
on the Debentures on the date such
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interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a "Holder Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Holder Direct Action, the Sponsor will be subrogated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Sponsor to such Holders of Preferred Securities in such Holder Direct
Action. Except as provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the Holders of the Debentures.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote to be mailed to each Holder
of record of Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
and (iii) instructions for the delivery of proxies.
No vote or consent of the Holders of Preferred Securities will be required for
the Trust to redeem and cancel Preferred Securities or to distribute the
Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities at such time that are owned by Litchfield Financial or by any
Affiliate of Litchfield Financial shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if they were not
outstanding.
Except as provided in this paragraph 5, Holders of the Preferred Securities will
have no rights to increase or decrease the number of Trustees or to appoint,
remove or replace a Trustee, which voting rights are vested exclusively in the
Holders of the Common Securities.
6. PRO RATA TREATMENT. A reference in these terms of the Preferred Securities to
any payment, Distribution or treatment as being "Pro Rata" shall mean pro rata
to each Holder of Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro
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rata according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
7. RANKING. The Preferred Securities rank pari passu and payment thereon will be
made Pro Rata with the Common Securities, except that when an Event of Default
occurs and is continuing, the rights of Holders of Preferred Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise rank in priority to the rights of Holders of the Common Securities.
8. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and payments
on redemption of the Preferred Securities will be payable, the transfer of the
Preferred Securities will be registrable, and Preferred Securities will be
exchangeable for Preferred Securities of other denominations of a like aggregate
liquidation amount, at the corporate trust office of the Property Trustee in The
City of New York; provided that payment of Distributions may be made at the
option of the Regular Trustees on behalf of the Trust by check mailed to the
address of the persons entitled thereto and that the payment on redemption of
any Preferred Security will be made only upon surrender of such Preferred
Security to the Property Trustee.
9. ACCEPTANCE OF INDENTURE AND PREFERRED GUARANTEE. Each Holder of Preferred
Securities, by the acceptance thereof, agrees to the provisions of (i) the
Preferred Guarantee, including the subordination provisions therein, and (ii)
the Indenture and the Debentures, including the subordination provisions of the
Indenture.
10. NO PREEMPTIVE RIGHTS. The Holders of Preferred Securities shall have no
preemptive or similar rights to subscribe to any additional Preferred Securities
or Common Securities.
11. MISCELLANEOUS. These terms shall constitute a part of the Declaration. The
Trust will provide a copy of the Declaration and the Indenture to a Holder of
Preferred Securities without charge on written request to the Trust at its
principal place of business.
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Annex I
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT - THIS PREFERRED
SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION
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 DECLARATION 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
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO LITCHFIELD
CAPITAL TRUST I OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number Number of Preferred Securities: __________ ________________
Aggregate Liquidation Amount: $____________
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
Litchfield Capital Trust I
____% Series A Trust Preferred Securities
(liquidation amount $10 per Preferred Security)
Litchfield Capital Trust I, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that _________ (the
"Holder") is the registered owner of _____
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(______) preferred securities of the Trust representing preferred undivided
beneficial interests in the assets of the Trust and designated the ____% Series
A Trust Preferred Securities (liquidation amount $10 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. 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
Declaration of Trust of the Trust dated as of ___________, ____, as the same may
be amended from time to time (the "Declaration") including the designation of
the terms of Preferred Securities as set forth in Exhibit B thereto. The
Preferred Securities and the Common Securities issued by the Trust pursuant to
the Declaration represent undivided beneficial interests in the assets of the
Trust, including the Debentures (as defined in the Declaration) issued by
Litchfield Financial Corporation, a Massachusetts corporation ("Litchfield
Financial"), to the Trust pursuant to the Indenture referred to in the
Declaration. The Holder is entitled to the benefits of the Guarantee Agreement
of Litchfield Financial dated as of __________, ____, as the same may be amended
from time to time (the "Guarantee") to the extent provided therein. The Trust
will furnish a copy of the Declaration, the Guarantee and the Indenture to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
The Holder of this Certificate, by accepting this Certificate, is deemed to have
(i) agreed to the terms of the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right of payment to all Senior Debt (as
defined in the Indenture) as and to the extent provided in the Indenture, and
(ii) agreed to the terms of the Guarantee, including that the Guarantee is
subordinate and junior in right of payment to all other liabilities of
Litchfield Financial, including the Debentures, except those made pari passu or
subordinate by their terms, and senior to all capital stock (other than the most
senior preferred stock issued, from time to time, if any, by Litchfield
Financial, which preferred stock will rank pari passu with the Guarantee) now or
hereafter issued by Litchfield Financial and to any guarantee now or hereafter
entered into by Litchfield Financial in respect of any of its capital stock
(other than the most senior preferred stock issued, from time to time, if any,
by Litchfield Financial).
Upon receipt of this Certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
IN WITNESS WHEREOF, Trustees of the Trust have executed this Certificate.
LITCHFIELD CAPITAL TRUST I
---------------------------------------
Ronald E. Rabidou, as Regular Trustee
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-------------------------------------
Heather A. Sica, as Regular Trustee
-------------------------------------
John J. Malloy, as Regular Trustee
Dated:
Countersigned and Registered:
The Bank of New York
Transfer Agent and Registrar
By:
---------------------------
Authorized Signatory
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a rate per
annum of ___ % (the "Coupon Rate") of the stated liquidation amount of $10 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarter will accumulate additional distributions thereon at the Coupon
Rate per annum (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used herein means such periodic cash
distributions and any such additional distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent the
Trust has funds on hand legally available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of the actual number
of days elapsed per 90-day quarter.
Distributions on the Preferred Securities will accumulate from _________, ____,
and will be payable quarterly in arrears, on ______, ______, ______ and ______
of each year, commencing on ________, ____, but only if and to the extent that
interest payments are made in respect of the Debentures held by the Property
Trustee. So long as Litchfield Financial shall not be in default in the payment
of interest on the Debentures, Litchfield Financial has the right under the
Indenture for the Debentures to defer payments of interest on the Debentures by
extending the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest periods
(each an "Extension Period"), during which Extension Period no interest shall be
due and payable on the Debentures. As a consequence of such deferral,
Distributions shall also be deferred. Despite such deferral, Distributions will
continue to accumulate with additional distributions thereon (to the extent
permitted by applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate compounded
quarterly during any such Extension Period; provided that no Extension Period
shall extend beyond the stated maturity of the Debentures. Prior to the
termination of any such Extension Period, Litchfield Financial may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarterly interest periods. Upon the termination of any Extension Period and the
payment of all amounts then due, Litchfield Financial may commence a new
Extension Period, subject to the above requirements. Payments of accumulated
Distributions will be payable to Holders of Preferred Securities as they appear
on the books and records of the Trust on the first record date after the end of
the Extension Period.
The Preferred Securities shall be redeemable as provided in the Declaration.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ______________________________________
Signature: _________________________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME(S) AS WRITTEN UPON THE FACE OF THIS PREFERRED SECURITY
CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER.
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EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01(b) of the Amended and Restated Declaration of Trust of
Litchfield Capital Trust I dated as of ____________, ____ (as amended from time
to time, the "Declaration"), the designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth below (each capitalized term used but not defined herein having the
meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER. _________ (_______) Common Securities of the Trust
with an aggregate liquidation amount at any time outstanding with respect to the
assets of the Trust of ___________________________________________ Dollars
($___________), and each with a liquidation amount with respect to the assets of
the Trust of $10 per Common Security, and __________ (__________) Common
Securities of the Trust with an aggregate liquidation amount at any time
outstanding with respect to the assets of the Trust of __________ Dollars
($__________), and each with a liquidation amount with respect to the assets of
the Trust of $10 per Common Security, for issuance upon the exercise of the
option granted to the Underwriter solely to cover over-allotments, if any, are
hereby designated as "____% Series A Trust Common Securities". The Common
Security Certificates evidencing the Common Securities shall be substantially in
the form attached hereto as Annex I, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.
The Common Securities are to be issued and sold to Litchfield Financial in
consideration of $_____________ in cash. In connection with the issuance and
sale of the Preferred Securities and the Common Securities, the Trust will
purchase as trust assets Debentures of Litchfield Financial having an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Securities and the Common Securities so issued, and bearing interest at an
annual rate equal to the annual Distribution rate on the Preferred Securities
and the Common Securities and having payment and redemption provisions which
correspond to the payment and redemption provisions of the Preferred Securities
and the Common Securities.
2. DISTRIBUTIONS. (a) Distributions payable on each Common Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of $10 per Common Security, such rate being the rate of interest payable
on the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one calendar quarter will accumulate additional distributions
thereon at the Coupon Rate per annum (to the extent permitted by applicable
law), compounded quarterly. The term "Distributions" as used herein means such
periodic cash distributions and any such additional distributions payable unless
otherwise stated. A Distribution will be made by the Property Trustee only to
the extent that interest payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Trust has funds on hand legally
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
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(b) Distributions on the Common Securities will accumulate from ___________,
____ and will be payable quarterly in arrears, on ______, ______, _____ and
_____ of each year commencing on ________________, ____, except as otherwise
described below, but only if and to the extent that interest payments are
made in respect of the Debentures held by the Property Trustee. So long as
Litchfield Financial shall not be in default in the payment of interest on
the Debentures, Litchfield Financial has the right under the Indenture for
the Debentures to defer payments of interest on the Debentures by extending
the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive quarterly interest
periods (each, an "Extension Period"), during which Extension Period no
interest shall be due and payable on the Debentures. As a consequence of such
deferral, Distributions shall also be deferred. Despite such deferral,
Distributions will continue to accumulate with additional distributions
thereon (to the extent permitted by applicable law but not at a rate greater
than the rate at which interest is then accruing on the Debentures) at the
Coupon Rate compounded quarterly during any such Extension Period; provided
that no Extension Period shall extend beyond the stated maturity of the
Debentures. Prior to the termination of any such Extension Period, Litchfield
Financial may further extend such Extension Period; provided that such
Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest periods. Upon the
termination of any Extension Period and the payment of all amounts then due,
Litchfield Financial may commence a new Extension Period, subject to the
above requirements. Payments of accumulated Distributions will be payable to
Holders of Common Securities as they appear on the books and records of the
Trust on the first record date after the end of the Extension Period.
(c) Distributions on the Common Securities will be payable promptly by the
Property Trustee (or other Paying Agent) upon receipt of immediately
available funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates. While the Preferred
Securities remain in book-entry only form, the relevant record dates for the
Common Securities shall be one business day prior to the relevant
Distribution date, and if the Preferred Securities are no longer in
book-entry only form, the relevant record dates for the Common Securities
will be the fifteenth (15th) day of the month prior to the relevant
Distribution date, which record and payment dates correspond to the record
and interest payment dates on the Debentures. Distributions payable on any
Common Securities that are not punctually paid on any Distribution payment
date as a result of Litchfield Financial' having failed to make the
corresponding interest payment on the Debentures will forthwith cease to be
payable to the person in whose name such Common Security is registered on the
relevant record date, and such defaulted Distribution will instead be payable
to the person in whose name such Common Security is registered on the special
record date established by the Regular Trustees, which record date shall
correspond to the special record date or other specified date determined in
accordance with the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date falling within an
Extension Period unless Litchfield Financial has elected to make a full or
partial payment of interest accrued on the Debentures on such Distribution
payment date. Subject to any applicable laws and regulations and the
provisions of the Declaration, each payment in respect of the Common
Securities will be made as described in paragraph 8 hereof. If any date on
which Distributions are payable on the Common Securities is not a Business
Day, then payment of the Distribution payable on such date will be
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made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
(d) All Distributions paid with respect to the Common Securities and the
Preferred Securities will be paid Pro Rata (as defined below) to the Holders
thereof entitled thereto. If an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other property held by or for the
Trust that is not accounted for under the Declaration, such money or property
shall be distributed Pro Rata among the Holders of the Preferred Securities
and the Common Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. (a) In the event of any voluntary
or involuntary dissolution of the Trust, the Holders of the Preferred Securities
and the Common Securities will be entitled to receive Pro Rata solely out of the
assets of the Trust legally available for distribution to Holders of Preferred
Securities and Common Securities after satisfaction of liabilities to the
creditors of the Trust, an amount equal to the aggregate of the stated
liquidation amount of $10 per Preferred Security and Common Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, and after satisfaction of liabilities to the creditors of the
Trust, Debentures in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities and the Common Securities and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on, such Preferred Securities and the Common Securities,
shall be distributed Pro Rata to the Holders of the Preferred Securities and the
Common Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be paid only in
part because the Trust has insufficient assets on hand legally available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and the Common Securities
shall be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution Pro Rata with Holders of Preferred
Securities, except that if an Event of Default has occurred and is continuing,
the Preferred Securities shall have a priority over the Common Securities with
respect to such Liquidation Distribution.
(b) The Holder of the Common Securities shall have the right to direct
the Property Trustee in writing at any time to dissolve the Trust and
to distribute Debentures to Holders in exchange for Securities (which
direction is optional and wholly within the discretion of the Holder of
the Common Securities). Upon the receipt of any such written direction,
the Property Trustee shall promptly (i) distribute Debentures in an
aggregate principal amount
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equal to the aggregate stated liquidation amount of the Preferred
Securities and the Common Securities held by each Holder, which
Debentures bear accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on the Preferred Securities and
the Common Securities of such Holder, in exchange for the Preferred
Securities and Common Securities of such Holder and (ii) dissolve the
Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities will no longer be
deemed to be outstanding and may be canceled by the Regular Trustees,
and (ii) Certificates representing Common Securities will be deemed to
represent beneficial interests in the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing
accrued and unpaid interest equal to accumulated and unpaid
Distributions on, such Common Securities until such Certificates are
presented to Litchfield Financial or its agent for transfer or
reissuance.
4. REDEMPTION OF DEBENTURES. The Common Securities may be redeemed only
if Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities and the Common
Securities are repaid or redeemed as set forth below:
(a) Upon the repayment of the Debentures, in whole or in part, whether at
maturity, upon redemption at any time or from time to time on or after
_________, ____, the proceeds of such repayment will be promptly applied to
redeem Pro Rata Preferred Securities and Common Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed, upon not less than 30 nor more than 60
days' notice, at a redemption price of $10 per Preferred Security and Common
Security plus an amount equal to accumulated and unpaid Distributions thereon
to, but excluding, the date of redemption, payable in cash (the "Redemption
Price"). The date of any such repayment or redemption of Preferred Securities
and Common Securities shall be established to coincide with the repayment or
redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred Securities and Common
Securities are to be so redeemed, the Preferred Securities and the Common
Securities will be redeemed Pro Rata and the Common Securities will be
redeemed as described in paragraph 4(e)(ii) below. If a partial redemption
would result in the delisting of the Preferred Securities by any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, Litchfield Financial pursuant to the Indenture
will redeem Debentures only in whole and, as a result, the Trust may redeem
the Common Securities only in whole.
(c) If, at any time, a Tax Event or an Investment Company Event (each as
hereinafter defined, and each, a "Special Event") shall occur and be
continuing, Litchfield Financial shall have the right at any time, upon not
less than 30 nor more than 60 days' notice, to redeem the Debentures in whole
or in part for cash at the Redemption Price within 90 days following the
occurrence of such Special Event, and promptly following such redemption,
Preferred Securities and Common Securities with
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an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed will be redeemed by the Trust at the Redemption
Price on a Pro Rata basis. The Common Securities will be redeemed Pro Rata
with the Preferred Securities, except that if an Event of Default has
occurred and is continuing, the Preferred Securities will have a priority
over the Common Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Sponsor and the Regular Trustees shall have
obtained an Opinion of Counsel experienced in such matters (a "Dissolution
Tax Opinion") to the effect that on or after ____________, ____ as a result
of (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or
any political subdivision or taxing authority thereof or therein, (b) any
amendment to, or change in, an interpretation or application of any such laws
or regulations by any legislative body, court, governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after _________, ____, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States Federal income tax with
respect to income accrued or received on the Debentures, (ii) the Trust is,
or will be within 90 days of the date thereof, subject to more than a de
minimis amount of taxes, duties or other governmental charges or (iii)
interest payable by Litchfield Financial to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible by
Litchfield Financial for United States Federal income tax purposes.
"Investment Company Event" means that the Sponsor and the Regular Trustees
shall have received an Opinion of Counsel experienced in practice under the
Investment Company Act that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), there is more than an insubstantial
risk that the Trust is or will be considered an Investment Company which is
required to be registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after _________, ____.
(d) The Trust may not redeem fewer than all the outstanding Common Securities
unless all accumulated and unpaid Distributions have been paid on all Common
Securities for all quarterly Distribution periods terminating on or prior to
the date of redemption.
(e) (i) Notice of any redemption of, or notice of distribution of Debentures
in exchange for, the Preferred Securities and the Common Securities (a
"Redemption/Distribution Notice") will be given by the Regular Trustees on
behalf of the Trust by mail to each Holder of Preferred Securities and Common
Securities to be redeemed or exchanged not less than 30 nor more than 60 days
prior to the date fixed for redemption or exchange thereof. For purposes of
the calculation of the date of
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redemption or exchange and the dates on which notices are given pursuant to
this paragraph 4(e)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first- class mail, postage
prepaid, to Holders of Preferred Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of Preferred
Securities and Common Securities at the address of each such Holder appearing
in the books and records of the Trust. No defect in the Redemption/
Distribution Notice or in the mailing of either thereof with respect to any
Holder shall affect the validity of the redemption or exchange proceedings
with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Common Securities are
to be redeemed, the Common Securities to be redeemed will be redeemed Pro
Rata from each Holder of Common Securities (subject to adjustment to
eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/Distribution Notice in respect of a
redemption of Common Securities as provided in this paragraph 4 (which notice
will be irrevocable), then immediately prior to the close of business on the
redemption date, provided that Litchfield Financial has paid to the Property
Trustee in immediately available funds a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures,
Distributions will cease to accumulate on the Common Securities called for
redemption, such Common Securities will no longer be deemed to be outstanding
and all rights of Holders of such Common Securities so called for redemption
will cease, except the right of the Holders of such Common Securities to
receive the Redemption Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to register or cause to
be registered the transfer of any Common Securities which have been so called
for redemption. If any date fixed for redemption of Common Securities is not
a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if
such Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of Common Securities is improperly withheld or
refused and not paid by the Property Trustee, Distributions on such Common
Securities will continue to accumulate, from the original redemption date to
the date of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the Redemption
Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular Trustees on
behalf of the Trust to Holders of the Common Securities.
5. VOTING RIGHTS. (a) Except as provided under paragraph 5(b) below and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
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(b) Holders of Common Securities have the sole right under the Declaration to
increase or decrease the number of Trustees, and to appoint, remove or
replace a Trustee, any such increase, decrease, appointment, removal or
replacement to be approved by Holders of Common Securities representing a
Majority in liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration, other than as described in Section 12.01(b) of the
Declaration, or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than as described in Section 8.01 of the Declaration or Section
3 of this Exhibit C or Section 3 of Exhibit B, then the Holders of outstanding
Securities will be entitled to vote on such amendment or proposal as a single
class and such amendment or proposal shall not be effective except with the
approval of the Holders of Securities of at least a Majority in liquidation
amount of the Securities, voting together as a single class; provided, however,
that (A) if any amendment or proposal referred to in clause (i) above would
adversely affect only the Preferred Securities or the Common Securities, then
only the affected class of Securities will be entitled to vote on such amendment
or proposal and such amendment or proposal shall not be effective except with
the approval of at least a Majority in liquidation amount of such class of
Securities, (B) the rights of Holders of Common Securities under Section 5.02 of
the Declaration to increase or decrease the number of, and to appoint, replace
or remove, Trustees shall not be amended without the consent of each Holder of
Common Securities, and (C) amendments to the Declaration shall be subject to
such further requirements as are set forth in Sections 12.01 and 12.02 of the
Declaration.
In the event the consent of the Property Trustee, as the holder of the
Debentures, is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the Property
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination. The Property
Trustee shall vote with respect to such amendment, modification or termination
as directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where such amendment,
modification or termination of the Indenture requires the consent or vote of (1)
holders of Debentures representing a specified percentage greater than a
majority in principal amount of the Debentures or (2) each holder of Debentures,
the Property Trustee may only vote with respect to that amendment, modification
or termination as directed by, in the case of clause (1) above, the vote of
Holders of Securities representing such specified percentage of the aggregate
liquidation amount of the Securities, or, in the case of clause (2) above, each
Holder of Securities; and provided, further, that the Property Trustee shall be
under no obligation to take any action in accordance with the directions of the
Holders of Securities unless the Property Trustee shall have received, at the
expense of the Sponsor, an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified for United States Federal income
tax purposes as other than a grantor trust on account of such action.
So long as any Debentures are held by the Property Trustee, the Trustees shall
not (i) direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee of the
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Indenture (the "Debenture Trustee"), or exercising any trust or power conferred
on such Debenture Trustee with respect to the Debentures, (ii) waive any past
default that is waivable under Section 6.06 of the Indenture or (iii) exercise
any right to rescind or annul a declaration of acceleration of the maturity of
the principal of the Debentures, without, in each case, obtaining the prior
approval of the Holders of a Majority in liquidation amount of all outstanding
Common Securities and Preferred Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Common Securities of any notice of default with respect to
the Debentures. In addition to obtaining the foregoing approvals of such Holders
of the Common Securities and Preferred Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an Opinion of Counsel experienced
in such matters to the effect that for United States Federal income tax purposes
the Trust will not be classified as other than a grantor trust on account of
such action.
Notwithstanding any other provision of these terms, each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived by the Holders of
Preferred Securities as provided in the Declaration or otherwise eliminated, and
until all Events of Default with respect to the Preferred Securities have been
so cured, waived by the Holders of Preferred Securities or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of Preferred Securities and only the Holders of the Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Declaration or of the Securities. In the event that any Event of Default
with respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in the Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of Default
with respect to the Common Securities for all purposes under the Declaration
without any further act, vote or consent of the Holders of the Common
Securities.
A waiver of an Indenture Event of Default by the Property Trustee at the
direction of the Holders of the Preferred Securities will constitute a waiver of
the corresponding Event of Default under the Declaration in respect of the
Securities.
Any required approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
Common Securities are entitled to vote to be mailed to each Holder of record of
Common Securities. Each such notice will include a statement setting forth (i)
the date of such meeting, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote and (iii)
instructions for the delivery of proxies.
No vote or consent of the Holders of Common Securities will be required for the
Trust to redeem and cancel Common Securities or to distribute the Debentures in
accordance with the Declaration.
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6. PRO RATA TREATMENT. A reference in these terms of the Common Securities to
any payment, Distribution or treatment as being "Pro Rata" shall mean pro rata
to each Holder of Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
7. RANKING. The Common Securities rank pari passu and payment thereon will be
made Pro Rata with the Preferred Securities, except that when an Event of
Default occurs and is continuing, the rights of Holders of Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise are subordinate to the rights of Holders of the Preferred Securities.
8. TRANSFER, EXCHANGE, METHOD OF PAYMENTS. Payment of Distributions and payments
on redemption of the Common Securities will be payable, the transfer of the
Common Securities will be registrable, and Common Securities will be
exchangeable for Common Securities of other denominations of a like aggregate
liquidation amount, at the principal corporate trust office of the Property
Trustee in The City of New York; provided that payment of Distributions may be
made at the option of the Regular Trustees on behalf of the Trust by check
mailed to the address of the persons entitled thereto and that the payment on
redemption of any Common Security will be made only upon surrender of such
Common Security to the Property Trustee. Notwithstanding the foregoing,
transfers of Common Securities are subject to conditions set forth in Section
9.01(c) of the Declaration.
9. ACCEPTANCE OF INDENTURE. Each Holder of Common Securities, by the acceptance
thereof, agrees to the provisions of Indenture and the Debentures, including the
subordination provisions of the Indenture.
10. NO PREEMPTIVE RIGHTS. The Holders of Common Securities shall have no
preemptive or similar rights to subscribe to any additional Common Securities or
Preferred Securities.
11. MISCELLANEOUS. These terms shall constitute a part of the Declaration. The
Trust will provide a copy of the Declaration and the Indenture to a Holder of
Common Securities without charge on written request to the Trust at its
principal place of business.
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Annex I
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number NUMBER OF COMMON SECURITIES
Certificate Evidencing Common Securities
of
Litchfield Capital Trust I
____% Series A Trust Common Securities
(liquidation amount $10 per Common Security)
Litchfield Capital Trust I, a statutory business 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 common undivided beneficial
interests in the assets of the Trust and designated the "____% Series A Trust
Common Securities" (liquidation amount $10 per Common Security) (the "Common
Securities"). The Common 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 and satisfaction of
the other conditions set forth in the Declaration (as defined below) including,
without limitation, Section 9.01(c) thereof. 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 Declaration of Trust of
the Trust dated as of __________, ____, as the same may be amended from time to
time (the "Declaration") including the designation of the terms of Common
Securities as set forth in Exhibit C thereto. The Common Securities and the
Preferred Securities issued by the Trust pursuant to the Declaration represent
undivided beneficial interests in the assets of the Trust, including the
Debentures (as defined in the Declaration) issued by Litchfield Financial
Corporation, a Massachusetts corporation ("Litchfield Financial"), to the Trust
pursuant to the Indenture referred to in the Declaration. The Trust will furnish
a copy of the Declaration and the Indenture to the Holder without charge upon
written request to the Trust at its principal place of business or registered
office.
The Holder of this Certificate, by accepting this Certificate, is deemed to have
agreed to the terms of the Indenture and the Debentures, including that the
Debentures are subordinate and junior in right
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of payment to all Senior Debt (as defined in the Supplemental Indenture) as and
to the extent provided in the Indenture.
Upon receipt of this Certificate, the Holder is bound by the Declaration and is
entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this Certificate
this ___ day of _______________, ____.
LITCHFIELD CAPITAL TRUST I
--------------------------------
John J. Malloy, as Regular Trustee
--------------------------------
Heather A. Sica, as Regular Trustee
--------------------------------
Ronald E. Rabidou, as Regular Trustee
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per annum
of ___ % (the "Coupon Rate") of the stated liquidation amount of $10 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one quarter
will accumulate additional distributions thereon at the Coupon Rate per annum
(to the extent permitted by applicable law) compounded quarterly. The term
"Distributions" as used herein means such periodic cash distributions and any
such additional distributions payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Trust has funds on hand
legally available therefor. The amount of Distributions payable for any period
will be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 90-day quarter.
Distributions on the Common Securities will accumulate from _________, ____ and
will be payable quarterly in arrears, on _____________, ____________,
_____________ and _____________ of each year, commencing on ________, ____, but
only if and to the extent that interest payments are made in respect of the
Debentures held by the Property Trustee. So long as Litchfield Financial shall
not be in default in the payment of interest on the Debentures, Litchfield
Financial has the right under the Indenture for the Debentures to defer payments
of interest on the Debentures by extending the interest payment period at any
time and from time to time on the Debentures for a period not
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exceeding 20 consecutive quarterly interest periods (each an "Extension
Period"), during which Extension Period no interest shall be due and payable on
the Debentures. As a consequence of such deferral, Distributions shall also be
deferred. Despite such deferral, Distributions will continue to accumulate with
additional distributions thereon (to the extent permitted by applicable law but
not at a rate greater than the rate at which interest is then accruing on the
Debentures) at the Coupon Rate compounded quarterly during any such Extension
Period; provided that no Extension Period shall extend beyond the stated
maturity of the Debentures. Prior to the termination of any such Extension
Period, Litchfield Financial may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarterly interest periods.
Upon the termination of any Extension Period and the payment of all amounts then
due, Litchfield Financial may commence a new Extension Period, subject to the
above requirements. Payments of accumulated Distributions will be payable to
Holders of Common Securities as they appear on the books and records of the
Trust on the first record date after the end of the Extension Period.
The Common Securities shall be redeemable as provided in the Declaration.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
_____________________________________________________ agent to transfer this
Common Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: _________________________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
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