EXHIBIT NO. 4.1
HARRINGTON WEST FINANCIAL GROUP, INC.
as Issuer
INDENTURE
Dated as of September 25, 2003
WILMINGTON TRUST COMPANY
as Trustee
FLOATING RATE JUNIOR SUBORDINATED DEBT SECURITIES DUE 2033
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...................................................................................................... 1
Section 1.01 Definitions............................................................................................... 1
ARTICLE II DEBT SECURITIES.................................................................................................. 8
Section 2.01 Authentication and Dating................................................................................. 8
Section 2.02 Form of Trustee's Certificate of Authentication........................................................... 9
Section 2.03 Form and Denomination of Debt Securities.................................................................. 9
Section 2.04 Execution of Debt Securities.............................................................................. 9
Section 2.05 Exchange and Registration of Transfer of Debt Securities.................................................. 10
Section 2.06 Mutilated, Destroyed, Lost or Stolen Debt Securities...................................................... 13
Section 2.07 Temporary Debt Securities................................................................................. 14
Section 2.08 Payment of Interest....................................................................................... 14
Section 2.09 Cancellation of Debt Securities Paid, etc................................................................. 15
Section 2.10 Computation of Interest................................................................................... 16
Section 2.11 Extension of Interest Payment Period...................................................................... 17
Section 2.12 CUSIP Numbers............................................................................................. 18
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY.............................................................................. 18
Section 3.01 Payment of Principal, Premium and Interest; Agreed Treatment of the Debt Securities....................... 18
Section 3.02 Offices for Notices and Payments, etc..................................................................... 19
Section 3.03 Appointments to Fill Vacancies in Trustee's Office........................................................ 20
Section 3.04 Provision as to Paying Agent.............................................................................. 20
Section 3.05 Certificate to Trustee.................................................................................... 21
Section 3.06 Additional Amounts........................................................................................ 21
Section 3.07 Compliance with Consolidation Provisions.................................................................. 21
Section 3.08 Limitation on Dividends................................................................................... 22
Section 3.09 Covenants as to the Trust................................................................................. 22
ARTICLE IV LISTS............................................................................................................ 23
Section 4.01 Securityholders' Lists.................................................................................... 23
Section 4.02 Preservation and Disclosure of Lists...................................................................... 23
Section 4.03 Financial and Other Information........................................................................... 24
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS...................................................................... 25
Section 5.01 Events of Default......................................................................................... 25
Section 5.02 Payment of Debt Securities on Default; Suit Therefor...................................................... 26
Section 5.03 Application of Moneys Collected by Trustee................................................................ 28
Section 5.04 Proceedings by Securityholders............................................................................ 28
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Section 5.05 Proceedings by Trustee.................................................................................... 29
Section 5.06 Remedies Cumulative and Continuing........................................................................ 29
Section 5.07 Direction of Proceedings and Waiver of Defaults by Majority of Securityholders............................ 29
Section 5.08 Notice of Defaults........................................................................................ 30
Section 5.09 Undertaking to Pay Costs.................................................................................. 30
ARTICLE VI CONCERNING THE TRUSTEE........................................................................................... 31
Section 6.01 Duties and Responsibilities of Trustee.................................................................... 31
Section 6.02 Reliance on Documents, Opinions, etc...................................................................... 32
Section 6.03 No Responsibility for Recitals, etc....................................................................... 33
Section 6.04 Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own Debt Securities........ 33
Section 6.05 Moneys to be Held in Trust................................................................................ 33
Section 6.06 Compensation and Expenses of Trustee...................................................................... 34
Section 6.07 Officers' Certificate as Evidence......................................................................... 34
Section 6.08 Eligibility of Trustee.................................................................................... 35
Section 6.09 Resignation or Removal of Trustee......................................................................... 35
Section 6.10 Acceptance by Successor Trustee........................................................................... 36
Section 6.11 Succession by Merger, etc................................................................................. 37
Section 6.12 Authenticating Agents..................................................................................... 38
ARTICLE VII CONCERNING THE SECURITYHOLDERS................................................................................... 39
Section 7.01 Action by Securityholders................................................................................. 39
Section 7.02 Proof of Execution by Securityholders..................................................................... 39
Section 7.03 Who Are Deemed Absolute Owners............................................................................ 40
Section 7.04 Debt Securities Owned by Company Deemed Not Outstanding................................................... 40
Section 7.05 Revocation of Consents; Future Holders Bound.............................................................. 40
ARTICLE VIII SECURITYHOLDERS' MEETINGS........................................................................................ 41
Section 8.01 Purposes of Meetings...................................................................................... 41
Section 8.02 Call of Meetings by Trustee............................................................................... 41
Section 8.03 Call of Meetings by Company or Securityholders............................................................ 41
Section 8.04 Qualifications for Voting................................................................................. 42
Section 8.05 Regulations............................................................................................... 42
Section 8.06 Voting.................................................................................................... 42
Section 8.07 Quorum; Actions........................................................................................... 43
ARTICLE IX SUPPLEMENTAL INDENTURES.......................................................................................... 44
Section 9.01 Supplemental Indentures without Consent of Securityholders................................................ 44
Section 9.02 Supplemental Indentures with Consent of Securityholders................................................... 45
Section 9.03 Effect of Supplemental Indentures......................................................................... 46
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Section 9.04 Notation on Debt Securities............................................................................... 46
Section 9.05 Evidence of Compliance of Supplemental Indenture to be Furnished to Trustee............................... 47
ARTICLE X REDEMPTION OF SECURITIES......................................................................................... 47
Section 10.01 Optional Redemption....................................................................................... 47
Section 10.02 Special Event Redemption.................................................................................. 47
Section 10.03 Notice of Redemption; Selection of Debt Securities........................................................ 47
Section 10.04 Payment of Debt Securities Called for Redemption.......................................................... 48
ARTICLE XI CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE................................................................ 49
Section 11.01 Company May Consolidate, etc., on Certain Terms........................................................... 49
Section 11.02 Successor Entity to be Substituted........................................................................ 49
Section 11.03 Opinion of Counsel to be Given to Trustee................................................................. 50
ARTICLE XII SATISFACTION AND DISCHARGE OF INDENTURE.......................................................................... 50
Section 12.01 Discharge of Indenture.................................................................................... 50
Section 12.02 Deposited Moneys to be Held in Trust by Trustee........................................................... 51
Section 12.03 Paying Agent to Repay Moneys Held......................................................................... 51
Section 12.04 Return of Unclaimed Moneys................................................................................ 51
ARTICLE XIII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS.................................................. 52
Section 13.01 Indenture and Debt Securities Solely Corporate Obligations................................................ 52
ARTICLE XIV MISCELLANEOUS PROVISIONS......................................................................................... 52
Section 14.01 Successors................................................................................................ 52
Section 14.02 Official Acts by Successor Entity......................................................................... 52
Section 14.03 Surrender of Company Powers............................................................................... 52
Section 14.04 Addresses for Notices, etc................................................................................ 52
Section 14.05 Governing Law............................................................................................. 53
Section 14.06 Evidence of Compliance with Conditions Precedent.......................................................... 53
Section 14.07 Business Day Convention................................................................................... 53
Section 14.08 Table of Contents, Headings, etc.......................................................................... 54
Section 14.09 Execution in Counterparts................................................................................. 54
Section 14.10 Separability.............................................................................................. 54
Section 14.11 Assignment................................................................................................ 54
Section 14.12 Acknowledgment of Rights.................................................................................. 54
ARTICLE XV SUBORDINATION OF DEBT SECURITIES................................................................................. 55
Section 15.01 Agreement to Subordinate.................................................................................. 55
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Section 15.02 Default on Senior Indebtedness............................................................................ 55
Section 15.03 Liquidation; Dissolution; Bankruptcy...................................................................... 55
Section 15.04 Subrogation............................................................................................... 57
Section 15.05 Trustee to Effectuate Subordination....................................................................... 58
Section 15.06 Notice by the Company..................................................................................... 58
Section 15.07 Rights of the Trustee; Holders of Senior Indebtedness..................................................... 58
Section 15.08 Subordination May Not Be Impaired......................................................................... 59
EXHIBITS
EXHIBIT A Form of Debt Security
iv
THIS INDENTURE, dated as of September 25, 2003, between Harrington West
Financial Group, Inc., a savings and loan holding company incorporated in
Delaware (hereinafter sometimes called the "Company"), and Wilmington Trust
Company, a Delaware banking corporation, as trustee (hereinafter sometimes
called the "Trustee").
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its Floating Rate Junior Subordinated Debt Securities
due 2033 (the "Debt Securities") under this Indenture and to provide, among
other things, for the execution and authentication, delivery and administration
thereof, the Company has duly authorized the execution of this Indenture.
NOW, THEREFORE, in consideration of the premises, and the purchase of
the Debt Securities by the holders thereof, the Company covenants and agrees
with the Trustee for the equal and proportionate benefit of the respective
holders from time to time of the Debt Securities as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.01. All accounting terms used
herein and not expressly defined shall have the meanings assigned to such terms
in accordance with generally accepted accounting principles and the term
"generally accepted accounting principles" means such accounting principles as
are generally accepted in the United States at the time of any computation. The
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.
"Additional Amounts" has the meaning set forth in Section 3.06.
"Additional Provisions" has the meaning set forth in Section 15.01.
"Administrative Action" has the meaning specified within the definition
of "Tax Event" in this Section 1.01.
"Authenticating Agent" means any agent or agents of the Trustee which
at the time shall be appointed and acting pursuant to Section 6.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the board of directors or the executive
committee or any other duly authorized designated officers of the Company.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in Wilmington, Delaware, The City of New York
or Sacramento, California are permitted or required by law or executive order to
close.
"Calculation Agent" means the Person identified as "Trustee" in the
first paragraph hereof with respect to the Debt Securities and the Institutional
Trustee with respect to the Trust Securities.
"Capital Securities" means undivided beneficial interests in the assets
of the Trust which are designated as "MMCapS(SM)" and rank pari passu with
Common Securities issued by the Trust; provided, however, that if an Event of
Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of such Capital Securities.
"Capital Securities Guarantee" means the guarantee agreement that the
Company will enter into with Wilmington Trust Company or other Persons that
operates directly or indirectly for the benefit of holders of Capital Securities
of the Trust.
"Capital Treatment Event" means, if the Company is organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, the receipt by the Company and the Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) any
amendment to, or change in, the laws, rules or regulations of the United States
or any political subdivision thereof or therein, or any rules, guidelines or
policies of an applicable regulatory authority for the Company or (b) any
official or administrative pronouncement or action or decision interpreting or
applying such laws, rules or regulations, which amendment or change is effective
or which pronouncement, action or decision is announced on or after the date of
original issuance of the Debt Securities, there is more than an insubstantial
risk that the Company will not, within 90 days of the date of such opinion, be
entitled to treat an amount equal to the aggregate Liquidation Amount of the
Capital Securities as "Tier 1 Capital" (or its then equivalent if the Company
were subject to such capital requirement) applied as if the Company (or its
successors) were a bank holding company for purposes of the capital adequacy
guidelines of the Federal Reserve (or any successor regulatory authority with
jurisdiction over bank holding companies), or any capital adequacy guidelines as
then in effect and applicable to the Company; provided, however, that the
distribution of the Debt Securities in connection with the liquidation of the
Trust by the Company shall not in and of itself constitute a Capital Treatment
Event unless such liquidation shall have occurred in connection with a Tax Event
or an Investment Company Event.
"Certificate" means a certificate signed by any one of the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company.
"Code" has the meaning set forth in Section 4.03.
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"Common Securities" means undivided beneficial interests in the assets
of the Trust which are designated as "Common Securities" and rank pari passu
with Capital Securities issued by the Trust; provided, however, that if an Event
of Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of such Capital Securities.
"Company" means Harrington West Financial Group, Inc., a savings and
loan holding company incorporated in Delaware, and, subject to the provisions of
Article XI, shall include its successors and assigns.
"Debt Security" or "Debt Securities" has the meaning stated in the
first recital of this Indenture.
"Debt Security Register" has the meaning specified in Section 2.05.
"Declaration" means the Amended and Restated Declaration of Trust of
the Trust, dated as of September 25, 2003, as amended or supplemented from time
to time.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 2.08.
"Deferred Interest" has the meaning set forth in Section 2.11.
"Event of Default" means any event specified in Section 5.01, which has
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" has the meaning set forth in Section 2.11.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Indenture" means this Indenture as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented, or both.
"Institutional Trustee" has the meaning set forth in the Declaration.
"Interest Payment Date" means January 8, April 8, July 8 and October 8
of each year, commencing on January 8, 2004, subject to Section 14.07.
"Interest Period" has the meaning set forth in Section 2.08.
"Interest Rate" means, with respect to any Interest Period, a per annum
rate of interest equal to LIBOR, as determined on the LIBOR Determination Date
for such Interest Period, plus 2.85%; provided, however, that the Interest Rate
for any Interest Period may not
3
exceed the highest rate permitted by New York law, as the same may be modified
by United States law of general application.
"Investment Company Event" means the receipt by the Company and the
Trust of an Opinion of Counsel experienced in such matters to the effect that,
as a result of a change in law or regulation or written change in interpretation
or application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Trust is or, within 90 days of the date of such opinion will be, considered
an "investment company" that is required to be registered under the Investment
Company Act of 1940, as amended, which change or prospective change becomes
effective or would become effective, as the case may be, on or after the date of
the original issuance of the Debt Securities.
"LIBOR" means the London Interbank Offered Rate for three-month U.S.
Dollar deposits in Europe as determined by the Calculation Agent according to
Section 2.10(b).
"LIBOR Banking Day" has the meaning set forth in Section 2.10(b)(i).
"LIBOR Business Day" has the meaning set forth in Section 2.10(b)(i).
"LIBOR Determination Date" has the meaning set forth in Section
2.10(b)(i).
"Liquidation Amount" means the liquidation amount of $1,000 per Trust
Security.
"Maturity Date" means October 8, 2033, subject to Section 14.07.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Vice Chairman, the President or any Vice President, and by the
Chief Financial Officer, the Treasurer, an Assistant Treasurer, the Comptroller,
an Assistant Comptroller, the Secretary or an Assistant Secretary of the
Company, and delivered to the Trustee. Each such certificate shall include the
statements provided for in Section 14.06 if and to the extent required by the
provisions of such Section.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or may be other
counsel reasonably satisfactory to the Trustee. Each such opinion shall include
the statements provided for in Section 14.06 if and to the extent required by
the provisions of such Section.
The term "outstanding," when used with reference to Debt Securities,
subject to the provisions of Section 7.04, means, as of any particular time, all
Debt Securities authenticated and delivered by the Trustee or the Authenticating
Agent under this Indenture, except
(a) Debt Securities theretofore canceled by the Trustee or the
Authenticating Agent or delivered to the Trustee for cancellation;
(b) Debt Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been deposited in
trust with the Trustee or with any Paying Agent (other than the Company) or
shall have been set aside and segregated in
4
trust by the Company (if the Company shall act as its own Paying Agent);
provided, that, if such Debt Securities, or portions thereof, are to be redeemed
prior to maturity thereof, notice of such redemption shall have been given as
provided in Articles X and XIV or provision satisfactory to the Trustee shall
have been made for giving such notice; and
(c) Debt Securities paid pursuant to Section 2.06 or in lieu of or
in substitution for which other Debt Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to
the Company and the Trustee is presented that any such Debt Securities are held
by bona fide holders in due course.
"Optional Redemption Date" has the meaning set forth in Section 10.01.
"Optional Redemption Price" means an amount in cash equal to 100% of
the principal amount of the Debt Securities being redeemed plus unpaid interest
accrued on such Debt Securities to the Optional Redemption Date or, in the case
of a redemption due to the occurrence of a Special Event, to the Special
Redemption Date if the Special Redemption Date is on or after October 8, 2008.
"OTS" means the Office of Thrift Supervision.
"Paying Agent" has the meaning set forth in Section 3.04(e).
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 2.06 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.
"Principal Office of the Trustee" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which at all times shall be located within the United States and
at the time of the execution of this Indenture shall be Rodney Square North,
1100 North Market Street, Wilmington, DE 19890-0001.
"Reference Banks" has the meaning set forth in Section 2.10(b)(ii).
"Resale Restriction Termination Date" means, with respect to any Debt
Security, the date which is the later of (i) two years (or such shorter period
of time as permitted by Rule 144(k) under the Securities Act) after the later of
(y) the date of original issuance of such Debt Security and (z) the last date on
which the Company or any Affiliate (as defined in Rule 405 under the Securities
Act) of the Company was the holder of such Debt Security (or any predecessor
thereto) and (ii) such later date, if any, as may be required by any subsequent
change in applicable law.
5
"Responsible Officer" means, with respect to the Trustee, any officer
within the Principal Office of the Trustee with direct responsibility for the
administration of the Indenture, including any vice-president, any assistant
vice-president, any secretary, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer or other officer of the Principal Office
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Securities Act" means the Securities Act of 1933, as amended.
"Securityholder," "holder of Debt Securities" or other similar terms,
means any Person in whose name at the time a particular Debt Security is
registered on the Debt Security Register.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of the
Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company,
(ii) all capital lease obligations of the Company, (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations of the Company
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business), (iv) all obligations of the Company
for the reimbursement of any letter of credit, any banker's acceptance, any
security purchase facility, any repurchase agreement or similar arrangement, any
interest rate swap, any other hedging arrangement, any obligation under options
or any similar credit or other transaction, (v) all obligations of the type
referred to in clauses (i) through (iv) above of other Persons for the payment
of which the Company is responsible or liable as obligor, guarantor or otherwise
and (vi) all obligations of the type referred to in clauses (i) through (v)
above of other Persons secured by any lien on any property or asset of the
Company (whether or not such obligation is assumed by the Company), whether
incurred on or prior to the date of this Indenture or thereafter incurred,
unless, with the prior approval of the OTS if not otherwise generally approved,
it is provided in the instrument creating or evidencing the same or pursuant to
which the same is outstanding that such obligations are not superior or are pari
passu in right of payment to the Debt Securities; provided, however, that Senior
Indebtedness shall not include (A) any debt securities issued to any trust other
than the Trust (or a trustee of such trust) that is a financing vehicle of the
Company (a "financing entity"), in connection with the issuance by such
financing entity of equity or other securities in transactions substantially
similar in structure to the transactions contemplated hereunder and in the
Declaration or (B) any guarantees of the Company in respect of the equity or
other securities of any financing entity referred to in clause (A) above.
"Special Event" means any of a Tax Event, an Investment Company Event
or a Capital Treatment Event.
"Special Redemption Date" has the meaning set forth in Section 10.02.
6
"Special Redemption Price" means, with respect to the redemption of any
Debt Security following a Special Event, an amount in cash equal to the
percentage for the principal amount of the Debt Securities that is specified
below for the Special Redemption Date plus unpaid interest accrued thereon to
the Special Redemption Date:
Special Redemption During the 12-Month
- --------------------------------------
Period Beginning October 8, Percentage of Principal Amount
- --------------------------------------- ------------------------------
2003 104.40%
2004 103.52%
2005 102.64%
2006 101.76%
2007 100.88%
2008 and thereafter 100%
"Subsidiary" means, with respect to any Person, (i) any corporation, at
least a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries, (ii) any general partnership, joint venture
or similar entity, at least a majority of the outstanding partnership or similar
interests of which shall at the time be owned by such Person or one or more of
its Subsidiaries or by such Person and one or more of its Subsidiaries, and
(iii) any limited partnership of which such Person or any of its Subsidiaries is
a general partner. For the purposes of this definition, "voting stock" means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
"Tax Event" means the receipt by the Company and the Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of any amendment to or change (including any announced prospective change) in
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement (including any private letter ruling,
technical advice memorandum, regulatory procedure, notice or announcement (an
"Administrative Action")) or judicial decision interpreting or applying such
laws or regulations, regardless of whether such Administrative Action or
judicial decision is issued to or in connection with a proceeding involving the
Company or the Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action or decision is enacted,
promulgated or announced, in each case on or after the date of original issuance
of the Debt Securities, there is more than an insubstantial risk that: (i) the
Trust is, or will be within 90 days of the date of such
7
opinion, subject to United States federal income tax with respect to income
received or accrued on the Debt Securities; (ii) if the Company is organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, interest payable by the Company on the Debt Securities is
not, or within 90 days of the date of such opinion, will not be, deductible by
the Company, in whole or in part, for United States federal income tax purposes;
or (iii) the Trust is, or will be within 90 days of the date of such opinion,
subject to or otherwise required to pay, or required to withhold from
distributions to holders of Trust Securities, more than a de minimis amount of
other taxes (including withholding taxes), duties, assessments or other
governmental charges.
"Trust" means Harrington West Capital Trust I, the Delaware statutory
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debt Securities under this
Indenture, of which the Company is the sponsor.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Securities" means Common Securities and Capital Securities of
the Trust.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder.
"United States" means the United States of America and the District of
Columbia.
"U.S. Person" has the meaning given to United States Person as set
forth in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.
ARTICLE II
DEBT SECURITIES
Section 2.01 Authentication and Dating.
Upon the execution and delivery of this Indenture, or from time to time
thereafter, Debt Securities in an aggregate principal amount not in excess of
$15,464,000 may be executed and delivered by the Company to the Trustee for
authentication, and the Trustee shall thereupon authenticate and make available
for delivery said Debt Securities to or upon the written order of the Company,
signed by its Chairman of the Board of Directors, Vice Chairman, President or
Chief Financial Officer or one of its Vice Presidents, without any further
action by the Company hereunder. In authenticating such Debt Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Debt Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon a copy of any Board
Resolution or Board Resolutions relating thereto and, if applicable, an
appropriate record of any action taken pursuant to such resolution, in each case
certified by the Secretary or an Assistant Secretary or other officers with
appropriate delegated authority of the Company as the case may be.
8
The Trustee shall have the right to decline to authenticate and deliver
any Debt Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if a Responsible
Officer of the Trustee in good faith shall determine that such action would
expose the Trustee to personal liability to existing Securityholders.
The definitive Debt Securities shall be typed, printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Debt Securities, as evidenced by
their execution of such Debt Securities.
Section 2.02 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication on all Debt Securities
shall be in substantially the following form:
This is one of the Debt Securities referred to in the within-mentioned
Indenture.
Wilmington Trust Company,
not in its individual capacity
but solely as trustee
By: _____________________________
Authorized Officer
Section 2.03 Form and Denomination of Debt Securities.
The Debt Securities shall be substantially in the form of Exhibit A
hereto. The Debt Securities shall be in registered, certificated form without
coupons and in minimum denominations of $100,000 and any multiple of $1,000 in
excess thereof. The Debt Securities shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plans as the officers
executing the same may determine with the approval of the Trustee as evidenced
by the execution and authentication thereof.
Section 2.04 Execution of Debt Securities.
The Debt Securities shall be signed in the name and on behalf of the
Company by the manual or facsimile signature of its Chairman of the Board of
Directors, Vice Chairman, President or Chief Financial Officer or one of its
Executive Vice Presidents, Senior Vice Presidents or Vice Presidents, under its
corporate seal (if legally required) which may be affixed thereto or printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise, and which
need not be attested. Only such Debt Securities as shall bear thereon a
certificate of authentication substantially in the form herein before recited,
executed by the Trustee or the Authenticating Agent by the manual signature of
an authorized officer, shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Trustee or the
Authenticating Agent upon any Debt Security executed by the Company shall be
conclusive evidence that the Debt Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
9
In case any officer of the Company who shall have signed any of the
Debt Securities shall cease to be such officer before the Debt Securities so
signed shall have been authenticated and delivered by the Trustee or the
Authenticating Agent, or disposed of by the Company, such Debt Securities
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debt Securities had not ceased to be such officer of the
Company; and any Debt Security may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such Debt Security, shall be
the proper officers of the Company, although at the date of the execution of
this Indenture any such person was not such an officer.
Every Debt Security shall be dated the date of its authentication.
Section 2.05 Exchange and Registration of Transfer of Debt
Securities.
The Company shall cause to be kept, at the office or agency maintained
for the purpose of registration of transfer and for exchange as provided in
Section 3.02, a register (the "Debt Security Register") for the Debt Securities
issued hereunder in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration and transfer of all
Debt Securities as provided in this Article II. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.
Debt Securities to be exchanged may be surrendered at the Principal
Office of the Trustee or at any office or agency to be maintained by the Company
for such purpose as provided in Section 3.02, and the Company shall execute, the
Company or the Trustee shall register and the Trustee or the Authenticating
Agent shall authenticate and make available for delivery in exchange therefor,
the Debt Security or Debt Securities which the Securityholder making the
exchange shall be entitled to receive. Upon due presentment for registration of
transfer of any Debt Security at the Principal Office of the Trustee or at any
office or agency of the Company maintained for such purpose as provided in
Section 3.02, the Company shall execute, the Company or the Trustee shall
register and the Trustee or the Authenticating Agent shall authenticate and make
available for delivery in the name of the transferee or transferees, a new Debt
Security for a like aggregate principal amount. Registration or registration of
transfer of any Debt Security by the Trustee or by any agent of the Company
appointed pursuant to Section 3.02, and delivery of such Debt Security, shall be
deemed to complete the registration or registration of transfer of such Debt
Security.
All Debt Securities presented for registration of transfer or for
exchange or payment shall (if so required by the Company or the Trustee or the
Authenticating Agent) be duly endorsed by, or be accompanied by, a written
instrument or instruments of transfer in form satisfactory to the Company and
either the Trustee or the Authenticating Agent duly executed by, the holder or
such holder's attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Debt Securities, but the Company or the Trustee may require payment
of a sum sufficient to cover any tax, fee or other governmental charge that may
be imposed in connection therewith other than exchanges pursuant to Section
2.07, Section 9.04 or Section 10.04 not involving any transfer.
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The Company or the Trustee shall not be required to exchange or
register a transfer of any Debt Security for a period of 15 days immediately
preceding the date of selection of Debt Securities for redemption.
Notwithstanding the foregoing, Debt Securities may not be transferred
prior to the Resale Restriction Termination Date except in compliance with the
legend set forth below, unless otherwise determined by the Company in accordance
with applicable law, which legend shall be placed on each Debt Security:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
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OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN
ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN
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EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS
THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY
OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.
Section 2.06 Mutilated, Destroyed, Lost or Stolen Debt Securities.
In case any Debt Security shall become mutilated or be destroyed, lost
or stolen, the Company shall execute, and upon its written request the Trustee
shall authenticate and deliver, a new Debt Security bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Debt Security, or in lieu of and in substitution for the Debt Security so
destroyed, lost or stolen. In every case the applicant for a substituted Debt
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of
such Debt Security and of the ownership thereof.
The Trustee may authenticate any such substituted Debt Security and
deliver the same upon the written request or authorization of any officer of the
Company. Upon the issuance of any substituted Debt Security, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Debt Security which has matured or is about to mature or
has been called for redemption in full shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Debt Security,
pay or authorize the payment of the same (without surrender thereof except in
the case of a mutilated Debt Security) if the applicant for such payment shall
furnish to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless and, in case of destruction, loss
or theft, evidence satisfactory to the Company and to the Trustee of the
destruction, loss or theft of such Security and of the ownership thereof.
Every substituted Debt Security issued pursuant to the provisions of
this Section 2.06 by virtue of the fact that any such Debt Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Debt Security shall
be found at any time, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debt Securities
duly issued hereunder. All Debt Securities shall be held and owned upon the
express condition that, to the extent permitted by applicable law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
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Section 2.07 Temporary Debt Securities.
Pending the preparation of definitive Debt Securities, the Company may
execute and the Trustee shall authenticate and make available for delivery
temporary Debt Securities that are typed, printed or lithographed. Temporary
Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities. Without unreasonable delay, the
Company will execute and deliver to the Trustee or the Authenticating Agent
definitive Debt Securities and thereupon any or all temporary Debt Securities
may be surrendered in exchange therefor, at the Principal Office of the Trustee
or at any office or agency maintained by the Company for such purpose as
provided in Section 3.02, and the Trustee or the Authenticating Agent shall
authenticate and make available for delivery in exchange for such temporary Debt
Securities a like aggregate principal amount of such definitive Debt Securities.
Such exchange shall be made by the Company at its own expense and without any
charge therefor except that in case of any such exchange involving a
registration of transfer the Company may require payment of a sum sufficient to
cover any tax, fee or other governmental charge that may be imposed in relation
thereto. Until so exchanged, the temporary Debt Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Debt
Securities authenticated and delivered hereunder.
Section 2.08 Payment of Interest.
Each Debt Security will bear interest at the then applicable Interest
Rate (i) in the case of the initial Interest Period, for the period from, and
including, the date of original issuance of such Debt Security to, but
excluding, the initial Interest Payment Date and (ii) thereafter, for the period
from, and including, the first day following the end of the preceding Interest
Period to, but excluding, the applicable Interest Payment Date or, in the case
of the last Interest Period, the related Optional Redemption Date, Special
Redemption Date or Maturity Date, as applicable (each such period, an "Interest
Period"), on the principal thereof, on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on Deferred
Interest and on any overdue installment of interest (including Defaulted
Interest), payable (subject to the provisions of Article XII) on each Interest
Payment Date. Interest and any Deferred Interest on any Debt Security that is
payable, and is punctually paid or duly provided for by the Company, on any
Interest Payment Date shall be paid to the Person in whose name such Debt
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment, except that
interest and any Deferred Interest payable on the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may be, shall be
paid to the Person to whom principal is paid. In case (i) the Maturity Date of
any Debt Security or (ii) any Debt Security or portion thereof is called for
redemption and the related Optional Redemption Date or the Special Redemption
Date, as the case may be, is subsequent to the regular record date with respect
to any Interest Payment Date and either on or prior to such Interest Payment
Date, interest on such Debt Security will be paid upon presentation and
surrender of such Debt Security.
14
Any interest on any Debt Security, other than Deferred Interest, that
is payable, but is not punctually paid or duly provided for by the Company, on
any Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the holder on the relevant regular record date by virtue
of having been such holder, and such Defaulted Interest shall be paid by the
Company to the Persons in whose names such Debt Securities (or their respective
Predecessor Securities) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such Debt Security and
the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements reasonably
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as provided in this paragraph.
Thereupon the Trustee shall fix a special record date for the payment of such
Defaulted Interest, which shall not be more than fifteen nor less than ten days
prior to the date of the proposed payment and not less than ten days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Debt Security Register, not less than ten days prior to such
special record date. Notice of the proposed payment of such Defaulted Interest
and the special record date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names such Debt
Securities (or their respective Predecessor Securities) are registered on such
special record date and thereafter the Company shall have no further payment
obligation in respect of the Defaulted Interest.
Any interest scheduled to become payable on an Interest Payment Date
occurring during an Extension Period shall not be Defaulted Interest and shall
be payable on such other date as may be specified in the terms of such Debt
Securities.
The term "regular record date", as used in this Section, shall mean the
fifteenth day prior to the applicable Interest Payment Date, whether or not such
day is a Business Day.
Subject to the foregoing provisions of this Section, each Debt Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debt Security shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debt
Security.
Section 2.09 Cancellation of Debt Securities Paid, etc.
All Debt Securities surrendered for the purpose of payment, redemption,
exchange or registration of transfer, shall, if surrendered to the Company or
any Paying Agent, be surrendered to the Trustee and promptly canceled by it, or,
if surrendered to the Trustee or any Authenticating Agent, shall be promptly
canceled by it, and no Debt Securities shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. All Debt
Securities canceled by any Authenticating Agent shall be delivered to the
Trustee. The
15
Trustee shall destroy all canceled Debt Securities unless the Company otherwise
directs the Trustee in writing, in which case the Trustee shall dispose of such
Debt Securities as directed by the Company. If the Company shall acquire any of
the Debt Securities, however, such acquisition shall not operate as a redemption
or satisfaction of the indebtedness represented by such Debt Securities unless
and until the same are surrendered to the Trustee for cancellation.
Section 2.10 Computation of Interest.
(a) The amount of interest payable for any Interest Period will be
computed on the basis of a 360-day year and the actual number of days elapsed in
such Interest Period.
(b) LIBOR shall be determined by the Calculation Agent for each
Interest Period in accordance with the following provisions:
(i) On the second LIBOR Business Day (provided, that on
such day commercial banks are open for business (including dealings in
foreign currency deposits) in London (a "LIBOR Banking Day"), and otherwise
the next preceding LIBOR Business Day that is also a LIBOR Banking Day)
prior to the January 15, April 15, July 15 or October 15, as the case may
be, immediately succeeding the commencement of such Interest Period (or, in
the case of the first Interest Period, on September 23, 2003) (each such
day, a "LIBOR Determination Date"), LIBOR shall equal the rate, as obtained
by the Calculation Agent, for three-month U.S. Dollar deposits in Europe,
which appears on Telerate (as defined in the International Swaps and
Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange
Definitions) page 3750 or such other page as may replace such page 3750, as
of 11:00 a.m. (London time) on such LIBOR Determination Date, as reported
by Bloomberg Financial Markets Commodities News or any successor service
("Telerate Page 3750"). "LIBOR Business Day" means any day that is not a
Saturday, Sunday or other day on which commercial banking institutions in
The City of New York or Wilmington, Delaware are authorized or obligated by
law or executive order to be closed. If such rate is superseded on Telerate
Page 3750 by a corrected rate before 12:00 noon (London time) on such LIBOR
Determination Date, the corrected rate as so substituted will be LIBOR for
such LIBOR Determination Date.
(ii) If, on such LIBOR Determination Date, such rate does
not appear on Telerate Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks to leading
banks in the London interbank market for three-month U.S. Dollar deposits
in Europe (in an amount determined by the Calculation Agent) by reference
to requests for quotations as of approximately 11:00 a.m. (London time) on
such LIBOR Determination Date made by the Calculation Agent to the
Reference Banks. If, on such LIBOR Determination Date, at least two of the
Reference Banks provide such quotations, LIBOR shall equal the arithmetic
mean of such quotations. If, on such LIBOR Determination Date, only one or
none of the Reference Banks provide such a quotation, LIBOR shall be deemed
to be the arithmetic mean of the offered quotations that at least two
leading banks in The City of New York (as selected by the Calculation
Agent) are quoting on such LIBOR Determination Date for three-month U.S.
Dollar deposits in Europe at approximately 11:00 a.m. (London time) (in an
16
amount determined by the Calculation Agent). As used herein, "Reference
Banks" means four major banks in the London interbank market selected by
the Calculation Agent.
(iii) If the Calculation Agent is required but is unable to
determine a rate in accordance with at least one of the procedures provided
above, LIBOR for such Interest Period shall be LIBOR in effect for the
immediately preceding Interest Period.
(c) All percentages resulting from any calculations on the Debt
Securities will be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)),
and all dollar amounts used in or resulting from such calculation will be
rounded to the nearest cent (with one-half cent being rounded upward).
(d) On each LIBOR Determination Date, the Calculation Agent shall
notify, in writing, the Company and the Paying Agent of the applicable Interest
Rate that applies to the related Interest Period. The Calculation Agent shall,
upon the request of a holder of any Debt Securities, inform such holder of the
Interest Rate that applies to the related Interest Period. All calculations made
by the Calculation Agent in the absence of manifest error shall be conclusive
for all purposes and binding on the Company and the holders of the Debt
Securities. The Paying Agent shall be entitled to rely on information received
from the Calculation Agent or the Company as to the applicable Interest Rate.
The Company shall, from time to time, provide any necessary information to the
Paying Agent relating to any original issue discount and interest on the Debt
Securities that is included in any payment and reportable for taxable income
calculation purposes.
Section 2.11 Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the Company shall
have the right, from time to time and without causing an Event of Default, to
defer payments of interest on the Debt Securities by extending the interest
payment period on the Debt Securities at any time and from time to time during
the term of the Debt Securities, for up to 20 consecutive quarterly periods
(each such extended interest payment period, together with all previous and
further consecutive extensions thereof, is referred to herein as an "Extension
Period"). No Extension Period may end on a date other than an Interest Payment
Date or extend beyond the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be. During any Extension Period,
interest will continue to accrue on the Debt Securities, and interest on such
accrued interest (such accrued interest and interest thereon referred to herein
as "Deferred Interest") will accrue at an annual rate equal to the Interest Rate
applicable during such Extension Period, compounded quarterly from the date such
Deferred Interest would have been payable were it not for the Extension Period,
to the extent permitted by applicable law. No interest or Deferred Interest
(except any Additional Amounts that may be due and payable) shall be due and
payable during an Extension Period, except at the end thereof. At the end of any
Extension Period, the Company shall pay all Deferred Interest then accrued and
unpaid on the Debt Securities; provided, however, that during any Extension
Period, the Company shall be subject to the restrictions set forth in Section
3.08. Prior to the termination of any Extension Period, the Company may further
extend such Extension Period, provided, that no Extension Period (including all
previous and further consecutive extensions that are part of such Extension
17
Period) shall exceed 20 consecutive quarterly periods. Upon the termination of
any Extension Period and upon the payment of all Deferred Interest, the Company
may commence a new Extension Period, subject to the foregoing requirements. The
Company must give the Trustee notice of its election to begin or extend an
Extension Period at least one Business Day prior to the earlier of (i) the next
succeeding date on which interest on the Debt Securities would have been payable
except for the election to begin or extend an Extension Period or (ii) the date
such interest is payable, but in any event not later than the related regular
record date. The Trustee shall give notice of the Company's election to begin or
extend an Extension Period to the Securityholders.
Section 2.12 CUSIP Numbers.
The Company in issuing the Debt Securities may use a "CUSIP" number (if
then generally in use), and, if so, the Trustee shall use a "CUSIP" number in
notices of redemption as a convenience to Securityholders; provided, that any
such notice may state that no representation is made as to the correctness of
such number either as printed on the Debt Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Debt Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee in writing of any change in the CUSIP number.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
Section 3.01 Payment of Principal, Premium and Interest; Agreed
Treatment of the Debt Securities.
(a) The Company covenants and agrees that it will duly and
punctually pay or cause to be paid all payments due in respect of the Debt
Securities at the place, at the respective times and in the manner provided in
this Indenture and the Debt Securities. Payment of the principal of and premium,
if any, and interest on the Debt Securities due on the Maturity Date, any
Optional Redemption Date or the Special Redemption Date, as the case may be,
will be made by the Company in immediately available funds against presentation
and surrender of such Debt Securities. At the option of the Company, each
installment of interest on the Debt Securities due on an Interest Payment Date
other than the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, as the case may be, may be paid (i) by mailing checks for such
interest payable to the order of the holders of Debt Securities entitled thereto
as they appear on the Debt Security Register or (ii) by wire transfer of
immediately available funds to any account with a banking institution located in
the United States designated by such holders to the Paying Agent no later than
the related record date. Notwithstanding anything to the contrary contained in
this Indenture or any Debt Security, if the Trust or the trustee of the Trust is
the holder of any Debt Security, then all payments in respect of such Debt
Security shall be made by the Company in immediately available funds when due.
(b) The Company will treat the Debt Securities as indebtedness,
and the interest payable in respect of such Debt Securities as interest, for all
U.S. federal income tax purposes. All payments in respect of such Debt
Securities will be made free and clear of U.S.
18
withholding tax to any beneficial owner thereof that has provided an Internal
Revenue Service Form W-8 BEN (or any substitute or successor form) establishing
its non-U.S. status for U.S. federal income tax purposes.
(c) As of the date of this Indenture, the Company represents that
it has no intention to exercise its right under Section 2.11 to defer payments
of interest on the Debt Securities by commencing an Extension Period.
(d) As of the date of this Indenture, the Company represents that
the likelihood that it would exercise its right under Section 2.11 to defer
payments of interest on the Debt Securities by commencing an Extension Period at
any time during which the Debt Securities are outstanding is remote because of
the restrictions that would be imposed on the Company's ability to declare or
pay dividends or distributions on, or to redeem, purchase or make a liquidation
payment with respect to, any of its outstanding equity and on the Company's
ability to make any payments of principal of or premium, if any, or interest on,
or repurchase or redeem, any of its debt securities that rank pari passu in all
respects with or junior in interest to the Debt Securities.
Section 3.02 Offices for Notices and Payments, etc.
So long as any of the Debt Securities remain outstanding, the Company
will maintain in Wilmington, Delaware or in Solvang, California an office or
agency where the Debt Securities may be presented for payment, an office or
agency where the Debt Securities may be presented for registration of transfer
and for exchange as provided in this Indenture and an office or agency where
notices and demands to or upon the Company in respect of the Debt Securities or
of this Indenture may be served. The Company will give to the Trustee written
notice of the location of any such office or agency and of any change of
location thereof. Until otherwise designated from time to time by the Company in
a notice to the Trustee, or specified as contemplated by Section 2.05, such
office or agency for all of the above purposes shall be the Principal Office of
the Trustee. In case the Company shall fail to maintain any such office or
agency in Wilmington, Delaware or in Sacramento, California, or shall fail to
give such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the Principal
Office of the Trustee.
In addition to any such office or agency, the Company may from time to
time designate one or more offices or agencies outside Wilmington, Delaware or
Sacramento, California where the Debt Securities may be presented for
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in Wilmington, Delaware or in
Sacramento, California for the purposes above mentioned. The Company will give
to the Trustee prompt written notice of any such designation or rescission
thereof.
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Section 3.03 Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint, in the manner provided in Section 6.09, a
Trustee, so that there shall at all times be a Trustee hereunder.
Section 3.04 Provision as to Paying Agent.
(a) If the Company shall appoint a Paying Agent other than the
Trustee, it will cause such Paying Agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provision of this Section 3.04,
(i) that it will hold all sums held by it as such agent
for the payment of all payments due on the Debt Securities (whether such
sums have been paid to it by the Company or by any other obligor on the
Debt Securities) in trust for the benefit of the holders of the Debt
Securities;
(ii) that it will give the Trustee prompt written notice
of any failure by the Company (or by any other obligor on the Debt
Securities) to make any payment on the Debt Securities when the same shall
be due and payable; and
(iii) that it will, at any time during the continuance of
any Event of Default, upon the written request of the Trustee, forthwith
pay to the Trustee all sums so held in trust by such Paying Agent.
(b) If the Company shall act as its own Paying Agent, it will, on
or before each due date of the payments due on the Debt Securities, set aside,
segregate and hold in trust for the benefit of the holders of the Debt
Securities a sum sufficient to make such payments so becoming due and will
notify the Trustee in writing of any failure to take such action and of any
failure by the Company (or by any other obligor under the Debt Securities) to
make any payment on the Debt Securities when the same shall become due and
payable.
Whenever the Company shall have one or more Paying Agents for the Debt
Securities, it will, on or prior to each due date of the payments on the Debt
Securities, deposit with a Paying Agent a sum sufficient to pay all payments so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee in writing of its action or failure to act.
(c) Anything in this Section 3.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge with respect to the Debt Securities, or for any other reason, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or any such Paying Agent, such sums to be held by the Trustee upon the
same terms and conditions herein contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 3.04 is subject
to Sections 12.03 and 12.04.
20
(e) The Company hereby initially appoints the Trustee to act as
paying agent for the Debt Securities (the "Paying Agent").
Section 3.05 Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days after the
end of each fiscal year, so long as Debt Securities are outstanding hereunder, a
Certificate stating that in the course of the performance by the signers of
their duties as officers of the Company they would normally have knowledge of
any default by the Company in the performance of any covenants of the Company
contained herein, stating whether or not they have knowledge of any such default
and, if so, specifying each such default of which the signers have knowledge and
the nature thereof.
Section 3.06 Additional Amounts.
If and for so long as the Trust is the holder of all Debt Securities
and is subject to or otherwise required to pay (or is required to withhold from
distributions to holders of Trust Securities) any additional taxes (including
withholding taxes), duties, assessments or other governmental charges as a
result of a Tax Event, the Company will pay such additional amounts (the
"Additional Amounts") on the Debt Securities or the Trust Securities, as the
case may be, as shall be required so that the net amounts received and retained
by the holders of Debt Securities or Trust Securities, as the case may be, after
payment of all taxes (including withholding taxes), duties, assessments or other
governmental charges, will be equal to the amounts that such holders would have
received and retained had no such taxes (including withholding taxes), duties,
assessments or other governmental charges been imposed.
Whenever in this Indenture or the Debt Securities there is a reference
in any context to the payment of principal of or premium, if any, or interest on
the Debt Securities, such mention shall be deemed to include mention of payments
of the Additional Amounts provided for in this Section to the extent that, in
such context, Additional Amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
such express mention is not made, provided, however, that, notwithstanding
anything to the contrary contained in this Indenture or any Debt Security, the
deferral of the payment of interest during an Extension Period pursuant to
Section 2.11 shall not defer the payment of any Additional Amounts that may be
due and payable.
Section 3.07 Compliance with Consolidation Provisions.
The Company will not, while any of the Debt Securities remain
outstanding, consolidate with, or merge into, any other Person, or merge into
itself, or sell, convey, transfer or otherwise dispose of all or substantially
all of its property or capital stock to any other Person unless the provisions
of Article XI hereof are complied with.
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Section 3.08 Limitation on Dividends.
If (i) there shall have occurred and be continuing an Event of Default,
(ii) the Company shall be in default with respect to its payment of any
obligations under the Capital Securities Guarantee or (iii) the Company shall
have given notice of its election to defer payments of interest on the Debt
Securities by extending the interest payment period as provided herein and such
period, or any extension thereof, shall have commenced and be continuing, then
the Company may not (A) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock, (B) make any payment of principal of or premium, if
any, or interest on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu in all respects with or junior in interest to the
Debt Securities or (C) make any payment under any guarantees of the Company that
rank pari passu in all respects with or junior in interest to the Capital
Securities Guarantee (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company (I) in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of one or more employees, officers, directors or consultants, (II)
in connection with a dividend reinvestment or stockholder stock purchase plan or
(III) in connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the occurrence
of (i), (ii) or (iii) above, (b) as a result of any exchange or conversion of
any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (c) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any stockholder's rights
plan, or the issuance of rights, stock or other property under any stockholder's
rights plan, or the redemption or repurchase of rights pursuant thereto or (e)
any dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior in interest to such stock).
Section 3.09 Covenants as to the Trust.
For so long as such Trust Securities remain outstanding, the Company
shall maintain 100% ownership of the Common Securities; provided, however, that
any permitted successor of the Company under this Indenture may succeed to the
Company's ownership of such Common Securities. The Company, as owner of the
Common Securities, shall use commercially reasonable efforts to cause the Trust
(a) to remain a statutory trust, except in connection with a distribution of
Debt Securities to the holders of Trust Securities in liquidation of the Trust,
the redemption of all of the Trust Securities or mergers, consolidations or
amalgamations, each as permitted by the Declaration, (b) to otherwise continue
to be classified as a grantor trust for United States federal income tax
purposes and (c) to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Debt Securities.
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ARTICLE IV
LISTS
Section 4.01 Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on each regular record date for an Interest Payment Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Securityholders of the Debt Securities as of such record date;
and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; except that no such lists need be furnished under this
Section 4.01 so long as the Trustee is in possession thereof by reason of its
acting as Debt Security registrar.
Section 4.02 Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debt Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of Debt
Securities registrar (if so acting) hereunder. The Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.
(b) In case three or more holders of Debt Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Debt Security for
a period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other holders
of Debt Securities with respect to their rights under this Indenture or under
such Debt Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall
within five Business Days after the receipt of such application, at its
election, either:
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 4.02, or
(ii) inform such applicants as to the approximate number
of holders of Debt Securities whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02, and as to the
approximate cost of mailing to such Securityholders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder of Debt Securities whose name and address appear in
the information preserved at the time by the
23
Trustee in accordance with the provisions of subsection (a) of this Section 4.02
a copy of the form of proxy or other communication which is specified in such
request with reasonable promptness after a tender to the Trustee of the material
to be mailed and of payment, or provision for the payment, of the reasonable
expenses of mailing, unless within five days after such tender, the Trustee
shall mail to such applicants and file with the Securities and Exchange
Commission, if permitted or required by applicable law, together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interests of
the holders of all Debt Securities, as the case may be, or would be in violation
of applicable law. Such written statement shall specify the basis of such
opinion. If said Commission, as permitted or required by applicable law, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of an order sustaining one or more of such objections, said
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring, the
Trustee shall mail copies of such material to all such Securityholders with
reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Each and every holder of Debt Securities, by receiving and
holding the same, agrees with the Company and the Trustee that none of the
Company, the Trustee or any Paying Agent shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
holders of Debt Securities in accordance with the provisions of subsection (b)
of this Section 4.02, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under said subsection (b).
Section 4.03 Financial and Other Information.
If at any time the Trust ceases to exist for whatever reason or is no
longer the holder of the Debt Securities, the Company shall:
(a) deliver to each Securityholder (1) each Report on Form 10-K
and Form 10-Q prepared by the Company and filed with the Securities and Exchange
Commission in accordance with the Exchange Act within 90 days after the filing
of each Form 10-K and within 30 days after the filing of each Form 10-Q, (2) if
the Company is at any time neither subject to Section 13 or 15(d) of the
Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder,
the information required to be provided by Rule 144A(d)(4) under the Securities
Act and (3) within 30 days after the end of the fiscal year of the Company Form
1099 or such other annual U.S. federal income tax information statement required
by the Internal Revenue Code of 1986, as amended (the "Code"), containing such
information with regard to the Debt Securities held by such Securityholder as is
required by the Code and the income tax regulations of the U.S. Treasury
thereunder; and
(b) if and for so long as ALESCO Preferred Funding I, Ltd. or an
entity that holds a pool of debt securities or trust preferred securities, or a
trustee thereof, is the holder of the Debt Securities, deliver to such holder
the Company's reports on Form H(b)11, promptly following their filing with the
Federal Reserve.
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ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
Section 5.01 Events of Default.
The following events shall be "Events of Default" with respect to Debt
Securities:
(a) the Company defaults in the payment of any interest upon any
Debt Security when it becomes due and payable, and continuance of such default
for a period of 30 days; for the avoidance of doubt, an extension of any
interest payment period by the Company in accordance with Section 2.11 of this
Indenture shall not constitute a default under this clause 5.01(a); or
(b) the Company defaults in the payment of all or any part of the
principal of (or premium, if any, on) any Debt Securities as and when the same
shall become due and payable, whether at maturity, upon redemption, by
acceleration of maturity pursuant to Section 5.01 of this Indenture or
otherwise; or
(c) the Company defaults in the performance of, or breaches, any
of its covenants or agreements in Sections 3.06, 3.07, 3.08 or 3.09 of this
Indenture (other than a covenant or agreement a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 90 days after there has
been given, by registered or certified mail, to the Company by the Trustee or to
the Company and the Trustee by the holders of not less than 25% in aggregate
principal amount of the outstanding Debt Securities, a written notice specifying
such default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(d) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Company in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoints a receiver, liquidator, assignee, custodian,
trustee, sequestrator or other similar official of the Company or for any
substantial part of its property, or orders the winding-up or liquidation of its
affairs and such decree, appointment or order shall remain unstayed and in
effect for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(f) the Trust shall have voluntarily or involuntarily liquidated,
dissolved, wound-up its business or otherwise terminated its existence except in
connection with (1) the distribution of the Debt Securities to holders of the
Trust Securities in liquidation of their interests in the Trust, (2) the
redemption of all of the outstanding Trust Securities or (3) certain mergers,
consolidations or amalgamations, each as permitted by the Declaration.
25
If an Event of Default specified under clause (a), (b) or (c) of this
Section 5.01 occurs and is continuing with respect to the Debt Securities, then,
in each and every such case, either the Trustee or the holders of not less than
25% in aggregate principal amount of the Debt Securities then outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal of the Debt Securities and
any premium and interest accrued, but unpaid, thereon to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable. If an Event of Default specified under clause (d), (e) or (f) of
this Section 5.01 occurs, then, in each and every such case, the entire
principal amount of the Debt Securities and any premium and interest accrued,
but unpaid, thereon shall ipso facto become immediately due and payable without
further action.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal of the Debt Securities shall have become due
by acceleration, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Debt Securities and all payments on the
Debt Securities which shall have become due otherwise than by acceleration (with
interest upon all such payments and Deferred Interest, to the extent permitted
by law) and such amount as shall be sufficient to cover reasonable compensation
to the Trustee and each predecessor Trustee, their respective agents, attorneys
and counsel, and all other amounts due to the Trustee pursuant to Section 6.06,
if any, and (ii) all Events of Default under this Indenture, other than the
non-payment of the payments in respect of Debt Securities which shall have
become due by acceleration, shall have been cured, waived or otherwise remedied
as provided herein, then, in each and every such case, the holders of a majority
in aggregate principal amount of the Debt Securities then outstanding, by
written notice to the Company and to the Trustee, may waive all defaults and
rescind and annul such acceleration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon; provided, however, that if the
Debt Securities are held by the Trust or a trustee of the Trust, such waiver or
rescission and annulment shall not be effective until the holders of a majority
in aggregate liquidation amount of the outstanding Capital Securities of the
Trust shall have consented to such waiver or rescission and annulment.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the Trustee and the holders of the Debt Securities shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee and the holders of the Debt
Securities shall continue as though no such proceeding had been taken.
Section 5.02 Payment of Debt Securities on Default; Suit Therefor.
The Company covenants that upon the occurrence of an Event of Default
pursuant to clause (a) or (b) of Section 5.01 and upon demand of the Trustee,
the Company will pay to the Trustee, for the benefit of the holders of the Debt
Securities, the whole amount that then shall have become due and payable on all
Debt Securities, including Deferred Interest accrued on the
26
Debt Securities; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any other
amounts due to the Trustee under Section 6.06. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee, in its own name and
as trustee of an express trust, shall be entitled and empowered to institute any
actions or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Company or
any other obligor on such Debt Securities and collect in the manner provided by
law out of the property of the Company or any other obligor on such Debt
Securities wherever situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debt Securities
under Bankruptcy Law, or in case a receiver or trustee shall have been appointed
for the property of the Company or such other obligor, or in the case of any
other similar judicial proceedings relative to the Company or other obligor upon
the Debt Securities, or to the creditors or property of the Company or such
other obligor, the Trustee, irrespective of whether the principal of the Debt
Securities shall then be due and payable as therein expressed or by acceleration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 5.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal and interest owing and unpaid
in respect of the Debt Securities and, in case of any judicial proceedings, to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all other
amounts due to the Trustee under Section 6.06) and of the Securityholders
allowed in such judicial proceedings relative to the Company or any other
obligor on the Debt Securities, or to the creditors or property of the Company
or such other obligor, unless prohibited by applicable law and regulations, to
vote on behalf of the holders of the Debt Securities in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or Person performing similar
functions in comparable proceedings, and to collect and receive any moneys or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of its charges and expenses; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and their
respective agents, attorneys and counsel, and all other amounts due to the
Trustee under Section 6.06.
Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Debt Securities or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such proceeding.
27
All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities, may be enforced by the Trustee without the
possession of any of the Debt Securities, or the production thereof at any trial
or other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall be for the ratable benefit of the holders of
the Debt Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Debt Securities, and it shall not be necessary to make any
holders of the Debt Securities parties to any such proceedings.
Section 5.03 Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the following
order, at the date or dates fixed by the Trustee for the distribution of such
moneys, upon presentation of the several Debt Securities in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses incurred by, and reasonable
fees of, the Trustee, its agents, attorneys and counsel, and of all other
amounts due to the Trustee under Section 6.06;
Second: To the payment of all Senior Indebtedness of the Company if and
to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon Debt
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due upon such Debt Securities; and
Fourth: The balance, if any, to the Company.
Section 5.04 Proceedings by Securityholders.
No holder of any Debt Security shall have any right to institute any
suit, action or proceeding for any remedy hereunder, unless such holder
previously shall have given to the Trustee written notice of an Event of Default
with respect to the Debt Securities and unless the holders of not less than 25%
in aggregate principal amount of the Debt Securities then outstanding shall have
given the Trustee a written request to institute such action, suit or proceeding
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred thereby, and
the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such action, suit or proceeding;
provided, that no holder of Debt Securities shall have any right to prejudice
the rights of any other holder of Debt Securities, obtain priority or preference
over any other such holder or enforce any right under this Indenture except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Debt Securities.
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Notwithstanding any other provisions in this Indenture, the right of
any holder of any Debt Security to receive payment of the principal of and
premium, if any, and interest on such Debt Security when due, or to institute
suit for the enforcement of any such payment, shall not be impaired or affected
without the consent of such holder. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 5.05 Proceedings by Trustee.
In case of an Event of Default, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either by suit in equity or by action at
law or by proceeding in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
Section 5.06 Remedies Cumulative and Continuing.
Except as otherwise provided in Section 2.06, all powers and remedies
given by this Article V to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive of any other
powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to the Debt Securities, and no delay or
omission of the Trustee or of any holder of any of the Debt Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.04, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.
Section 5.07 Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.
The holders of a majority in aggregate principal amount of the Debt
Securities affected at the time outstanding and, if the Debt Securities are held
by the Trust or a trustee of the Trust, the holders of a majority in aggregate
liquidation amount of the outstanding Capital Securities of the Trust shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to such Debt Securities; provided, however, that if
the Debt Securities are held by the Trust or a trustee of the Trust, such time,
method and place or such exercise, as the case may be, may not be so directed
until the holders of a majority in aggregate liquidation amount of the
outstanding Capital Securities of the Trust shall have directed such time,
method and place or such exercise, as the case may be; provided, further, that
(subject to the provisions of Section 6.01) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine that the
action so directed would be unjustly prejudicial to the holders
29
not taking part in such direction or if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken
or if a Responsible Officer of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability. Prior
to any declaration of acceleration, or ipso facto acceleration, of the maturity
of the Debt Securities, the holders of a majority in aggregate principal amount
of the Debt Securities at the time outstanding may on behalf of the holders of
all of the Debt Securities waive (or modify any previously granted waiver of)
any past Default or Event of Default and its consequences, except a default (a)
in the payment of principal of or premium, if any, or interest on any of the
Debt Securities, (b) in respect of covenants or provisions hereof which cannot
be modified or amended without the consent of the holder of each Debt Security
affected, or (c) in respect of the covenants contained in Section 3.09;
provided, however, that if the Debt Securities are held by the Trust or a
trustee of the Trust, such waiver or modification to such waiver shall not be
effective until the holders of a majority in aggregate liquidation amount of the
outstanding Capital Securities of the Trust shall have consented to such waiver
or modification to such waiver; provided, further, that if the consent of the
holder of each outstanding Debt Security is required, such waiver or
modification to such waiver shall not be effective until each holder of the
outstanding Capital Securities of the Trust shall have consented to such waiver
or modification to such waiver. Upon any such waiver or modification to such
waiver, the Default or Event of Default covered thereby shall be deemed to be
cured for all purposes of this Indenture and the Company, the Trustee and the
holders of the Debt Securities shall be restored to their former positions and
rights hereunder, respectively; but no such waiver or modification to such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon. Whenever any Default or Event of Default
hereunder shall have been waived as permitted by this Section, said Default or
Event of Default shall for all purposes of the Debt Securities and this
Indenture be deemed to have been cured and to be not continuing.
Section 5.08 Notice of Defaults.
The Trustee shall, within 90 days after a Responsible Officer of the
Trustee shall have actual knowledge or received written notice of the occurrence
of a default with respect to the Debt Securities, mail to all Securityholders,
as the names and addresses of such holders appear upon the Debt Security
Register, notice of all defaults with respect to the Debt Securities known to
the Trustee, unless such defaults shall have been cured before the giving of
such notice (the term "default" for the purpose of this Section is hereby
defined to be any event specified in Section 5.01, not including periods of
grace, if any, provided for 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 Debt Securities, the Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders.
Section 5.09 Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Debt
Security by such holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its
30
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 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the outstanding Debt Securities (or, if such Debt Securities are held by the
Trust or a trustee of the Trust, more than 10% in liquidation amount of the
outstanding Capital Securities),to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of or premium, if any, or
interest on any Debt Security against the Company on or after the same shall
have become due and payable or to any suit instituted in accordance with Section
14.12.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.01 Duties and Responsibilities of Trustee.
With respect to the holders of Debt Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with respect to the Debt
Securities and after the curing or waiving of all Events of Default which may
have occurred, with respect to the Debt Securities, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture. In
case an Event of Default with respect to the Debt Securities has occurred (which
has not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct or bad faith, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee with respect to the
Debt Securities shall be determined solely by the express provisions of
this Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations with respect to the Debt
Securities as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
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 Trustee and conforming to the requirements of
this Indenture; but, in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to determine
whether or not they conform on their face to the requirements of this
Indenture;
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(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(d) the Trustee shall not be charged with knowledge of any Default
or Event of Default with respect to the Debt Securities unless either (1) a
Responsible Officer shall have actual knowledge of such Default or Event of
Default or (2) written notice of such Default or Event of Default shall have
been given to the Trustee by the Company or any other obligor on the Debt
Securities or by any holder of the Debt Securities, except that the Trustee
shall be deemed to have knowledge of any Event of Default pursuant to Sections
5.01(a) or 5.01(b) hereof (other than an Event of Default resulting from the
default in the payment of Additional Amounts if the Trustee does not have actual
knowledge or written notice that such payment is due and payable) .
None of the provisions contained in this Indenture shall require the
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.
Section 6.02 Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, note,
debenture or other paper or document believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any Board Resolution may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
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(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to the Debt Securities
(which has not been cured or waived) to exercise with respect to the Debt
Securities such of the rights and powers vested in it by this Indenture, and to
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 such person's
own affairs;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, coupon or other paper or document, unless requested in writing to do
so by the holders of a majority in aggregate principal amount of the outstanding
Debt Securities affected thereby; provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
(including any Authenticating Agent) or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed by it with due care.
Section 6.03 No Responsibility for Recitals, etc.
The recitals contained herein and in the Debt Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company, and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same.
The Trustee and the Authenticating Agent make no representations as to the
validity or sufficiency of this Indenture or of the Debt Securities. The Trustee
and the Authenticating Agent shall not be accountable for the use or application
by the Company of any Debt Securities or the proceeds of any Debt Securities
authenticated and delivered by the Trustee or the Authenticating Agent in
conformity with the provisions of this Indenture.
Section 6.04 Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debt Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar, in its individual or any other capacity,
may become the owner or pledgee of Debt Securities with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, transfer agent
or Debt Security registrar.
Section 6.05 Moneys to be Held in Trust.
Subject to the provisions of Section 12.04, all moneys received by the
Trustee or any Paying Agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent
33
required by law. The Trustee and any Paying Agent shall be under no liability
for interest on any money received by it hereunder except as otherwise agreed in
writing with the Company. So long as no Event of Default shall have occurred and
be continuing, all interest allowed on any such moneys, if any, shall be paid
from time to time to the Company upon the written order of the Company, signed
by the Chairman of the Board of Directors, the President, the Chief Operating
Officer, a Vice President, the Treasurer or an Assistant Treasurer of the
Company.
Section 6.06 Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation as shall be agreed
to in writing between the Company and the Trustee (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust), and the Company will pay or reimburse the Trustee upon its written
request for all documented reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Indenture (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 that arises from its
negligence, willful misconduct or bad faith. The Company also covenants to
indemnify each of the Trustee (including in its individual capacity) and any
predecessor Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any and all loss, damage, claim, liability or
expense including taxes (other than taxes based on the income of the Trustee),
except to the extent such loss, damage, claim, liability or expense results from
the negligence, willful misconduct or bad faith of such indemnitee, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in the premises. The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
documented expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a lien
prior to that of the Debt Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Debt Securities.
Without prejudice to any other rights available to the Trustee under
applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in clause (d), (e) or (f) of
Section 5.01, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the resignation or removal
of the Trustee and the defeasance or other termination of this Indenture.
Section 6.07 Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such
34
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence, willful misconduct or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.
Section 6.08 Eligibility of Trustee.
The Trustee hereunder shall at all times be a U.S. Person that is a
banking corporation or national association organized and doing business under
the laws of the United States of America or any state thereof or of the District
of Columbia and authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least fifty million U.S. dollars
($50,000,000) and subject to supervision or examination by federal, state, or
District of Columbia authority. If such corporation or national association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation or
national association shall be deemed to be its combined capital and surplus as
set forth in its most recent records of condition so published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee, notwithstanding that such corporation or national association shall be
otherwise eligible and qualified under this Article.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.09.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of ss.310(b) of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to, this Indenture.
Section 6.09 Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof, at the Company's expense, to the holders
of the Debt Securities at their addresses as they shall appear on the Debt
Security Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee or trustees by written instrument, in
duplicate, executed by order of its Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of
resignation to the affected Securityholders, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee,
or any Securityholder who has been a bona fide holder of a Debt Security or Debt
Securities for at least six months may, subject to the provisions of Section
5.09, on behalf of himself or herself and all others
35
similarly situated, petition any such court for the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor Trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions
of the last paragraph of Section 6.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a Debt
Security or Debt Securities for at least six months;
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.08 and shall fail to resign after written
request therefor by the Company or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 5.09, if no successor Trustee shall have been so appointed
and have accepted appointment within 30 days of the occurrence of any of (i),
(ii) or (iii) above, any Securityholder who has been a bona fide holder of a
Debt Security or Debt Securities for at least six months may, on behalf of
himself or herself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
Trustee.
(c) Upon prior written notice to the Company and the Trustee, the
holders of a majority in aggregate principal amount of the Debt Securities at
the time outstanding may at any time remove the Trustee and nominate a successor
Trustee, which shall be deemed appointed as successor Trustee unless within ten
Business Days after such nomination the Company objects thereto, in which case
or in the case of a failure by such holders to nominate a successor Trustee, the
Trustee so removed or any Securityholder, upon the terms and conditions and
otherwise as in subsection (a) of this Section, may petition any court of
competent jurisdiction for an appointment of a successor.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor Trustee as provided in
Section 6.10.
Section 6.10 Acceptance by Successor Trustee.
Any successor Trustee appointed as provided in Section 6.09 shall
execute, acknowledge and deliver to the Company and to its predecessor Trustee
an indenture
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supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all of the rights, powers, trusts and
duties of the retiring Trustee shall be vested in the successor Trustee, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to the Debt Securities of its predecessor hereunder,
with like effect as if originally named as Trustee herein; but, nevertheless, on
the written request of the Company or of the successor Trustee, the Trustee
ceasing to act shall, upon payment of the amounts then due it pursuant to the
provisions of Section 6.06, execute and deliver an instrument transferring to
such successor Trustee all the rights and powers of the Trustee so ceasing to
act and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder. Upon request of any
such successor Trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
Trustee all such rights and powers. Any Trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions of Section
6.06.
No successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Trustee shall be
eligible and qualified under the provisions of Section 6.08.
In no event shall a retiring Trustee be liable for the acts or
omissions of any successor Trustee hereunder.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Company shall mail notice of the succession of such Trustee
hereunder to the holders of Debt Securities at their addresses as they shall
appear on the Debt Security Register. If the Company fails to mail such notice
within ten Business Days after the acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Company.
Section 6.11 Succession by Merger, etc.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided, that such corporation shall be otherwise eligible
and qualified under this Article.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Debt Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such Debt
Securities so authenticated; and in case at that time any of the Debt Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Debt Securities either in the name of any predecessor hereunder or in the
name of the
37
successor Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Debt Securities or in this Indenture provided
that the certificate of the Trustee shall have; provided, however, that the
right to adopt the certificate of authentication of any predecessor Trustee or
authenticate Debt Securities in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
Section 6.12 Authenticating Agents.
There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on its behalf and subject to
its direction in the authentication and delivery of Debt Securities issued upon
exchange or registration of transfer thereof as fully to all intents and
purposes as though any such Authenticating Agent had been expressly authorized
to authenticate and deliver Debt Securities; provided, however, that the Trustee
shall have no liability to the Company for any acts or omissions of the
Authenticating Agent with respect to the authentication and delivery of Debt
Securities. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
thereof or of the District of Columbia authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of at least
$50,000,000 and being subject to supervision or examination by federal, state or
District of Columbia authority. If such corporation publishes reports of
condition at least annually pursuant to law or the requirements of such
authority, then for the purposes of this Section 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. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner and
with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, if such successor corporation is
otherwise eligible under this Section without the execution or filing of any
paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any Authenticating Agent with respect to the Debt
Securities by giving written notice of termination to such Authenticating Agent
and to the Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible under this Section, the Trustee may, and upon the request of the
Company shall, promptly appoint a successor Authenticating Agent eligible under
this Section, shall give written notice of such appointment to the Company and
shall mail notice of such appointment to all holders of Debt Securities as the
names and addresses of such holders appear on the Debt Security Register. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein.
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The Company agrees to pay to any Authenticating Agent from time to time
reasonable compensation for its services. Any Authenticating Agent shall have no
responsibility or liability for any action taken by it as such in accordance
with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
Section 7.01 Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a
specified percentage in aggregate principal amount of the Debt Securities may
take any action (including the making of any demand or request, the giving of
any notice, consent or waiver or the taking of any other action), the fact that
at the time of taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, or (b) by the record of such holders of
Debt Securities voting in favor thereof at any meeting of such Securityholders
duly called and held in accordance with the provisions of Article VIII, or (c)
by a combination of such instrument or instruments and any such record of such a
meeting of such Securityholders, or (d) by any other method the Trustee deems
satisfactory.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action or
revocation of the same, the Company may, at its option, as evidenced by an
Officers' Certificate, fix in advance a record date for such Debt Securities for
the determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same may be given before or after
the record date, but only the Securityholders of record at the close of business
on the record date shall be deemed to be Securityholders for the purposes of
determining whether Securityholders of the requisite proportion of outstanding
Debt Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation
of the same, and for that purpose the outstanding Debt Securities shall be
computed as of the record date; provided, however, that no such authorization,
agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than six months after the record date.
Section 7.02 Proof of Execution by Securityholders.
Subject to the provisions of Sections 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or such Securityholder's agent
or proxy shall be sufficient if made in accordance with such reasonable rules
and regulations as may be prescribed by the Trustee or in such manner as shall
be satisfactory to the Trustee. The ownership of Debt Securities shall be proved
by the Debt Security Register or by a certificate of the Debt Security
registrar. The Trustee may require such additional proof of any matter referred
to in this Section as it shall deem necessary.
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The record of any Securityholders' meeting shall be proved in the
manner provided in Section 8.06.
Section 7.03 Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and any Debt Security registrar may deem the Person in whose
name such Debt Security shall be registered upon the Debt Security Register to
be, and may treat such Person as, the absolute owner of such Debt Security
(whether or not such Debt Security shall be overdue) for the purpose of
receiving payment of or on account of the principal of and premium, if any, and
interest on such Debt Security and for all other purposes; and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being or upon
such holder's order shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Debt Security.
Section 7.04 Debt Securities Owned by Company Deemed Not
Outstanding.
In determining whether the holders of the requisite aggregate principal
amount of Debt Securities have concurred in any direction, consent or waiver
under this Indenture, Debt Securities which are owned by the Company or any
other obligor on the Debt Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company (other than the Trust) or any other obligor on the Debt Securities shall
be disregarded and deemed not to be outstanding for the purpose of any such
determination, provided, that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver,
only Debt Securities which a Responsible Officer of the Trustee actually knows
are so owned shall be so disregarded. Debt Securities so owned which have been
pledged in good faith may be regarded as outstanding for the purposes of this
Section if the pledgee shall establish to the satisfaction of the Trustee the
pledgee's right to vote such Debt Securities and that the pledgee is not the
Company or any such other obligor or Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any such other obligor. In the case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
Section 7.05 Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Debt Securities specified in
this Indenture in connection with such action, any holder (in cases where no
record date has been set pursuant to Section 7.01) or any holder as of an
applicable record date (in cases where a record date has been set pursuant to
Section 7.01) of a Debt Security (or any Debt Security issued in whole or in
part in exchange or substitution therefor) the serial number of which is shown
by the evidence to be included in the Debt Securities the holders of which have
consented to such action may, by filing written notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in
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Section 7.02, revoke such action so far as concerns such Debt Security (or so
far as concerns the principal amount represented by any exchanged or substituted
Debt Security). Except as aforesaid any such action taken by the holder of any
Debt Security shall be conclusive and binding upon such holder and upon all
future holders and owners of such Debt Security, and of any Debt Security issued
in exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
Section 8.01 Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VI;
(c) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on
behalf of the holders of any specified aggregate principal amount of such Debt
Securities under any other provision of this Indenture or under applicable law.
Section 8.02 Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders to take
any action specified in Section 8.01, to be held at such time and at such place
in The City of New York, the Borough of Manhattan, or Wilmington, Delaware, as
the Trustee shall determine. Notice of every meeting of the Securityholders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be mailed to holders of Debt
Securities affected at their addresses as they shall appear on the Debt
Securities Register. Such notice shall be mailed not less than 20 nor more than
180 days prior to the date fixed for the meeting.
Section 8.03 Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a Board Resolution, or the
holders of at least 10% in aggregate principal amount of the Debt Securities, as
the case may be, then outstanding, shall have requested the Trustee to call a
meeting of Securityholders, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the
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Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may determine
the time and the place in Solvang, California for such meeting and may call such
meeting to take any action authorized in Section 8.01, by mailing notice thereof
as provided in Section 8.02.
Section 8.04 Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders, a Person
shall be (a) a holder of one or more Debt Securities or (b) a Person appointed
by an instrument in writing as proxy by a holder of one or more Debt Securities.
The only Persons who shall be entitled to be present or to speak at any meeting
of Securityholders shall be the Persons entitled to vote at such meeting and
their counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 8.05 Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Debt Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote at the meeting.
Subject to the provisions of Section 7.04, at any meeting each holder
of Debt Securities with respect to which such meeting is being held or proxy
therefor shall be entitled to one vote for each $1,000 principal amount of Debt
Securities held or represented by such holder; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Debt Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debt Securities held by such chairman or instruments in writing as
aforesaid duly designating such chairman as the Person to vote on behalf of
other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.
Section 8.06 Voting.
The vote upon any resolution submitted to any meeting of holders of
Debt Securities with respect to which such meeting is being held shall be by
written ballots on which shall be subscribed the signatures of such holders or
of their representatives by proxy and the serial number or numbers of the Debt
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at
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the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 8.02. The record
shall show the serial numbers of the Debt Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 8.07 Quorum; Actions.
The Persons entitled to vote a majority in aggregate principal amount
of the Debt Securities then outstanding shall constitute a quorum for a meeting
of Securityholders; provided, however, that if any action is to be taken at such
meeting with respect to a consent, waiver, request, demand, notice,
authorization, direction or other action which may be given by the holders of
not less than a specified percentage in aggregate principal amount of the Debt
Securities then outstanding, the Persons holding or representing such specified
percentage in aggregate principal amount of the Debt Securities then outstanding
will constitute a quorum. In the absence of a quorum within 30 minutes of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Securityholders, be dissolved. In any other case, the meeting may be
adjourned for a period of not less than 10 days as determined by the permanent
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the permanent
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 8.02, except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the aggregate principal amount of the Debt
Securities then outstanding which shall constitute a quorum.
Except as limited by the proviso in the first paragraph of Section
9.02, any resolution presented to a meeting or adjourned meeting duly reconvened
at which a quorum is present as aforesaid may be adopted by the affirmative vote
of the holders of a majority in aggregate principal amount of the Debt
Securities then outstanding; provided, however, that, except as limited by the
proviso in the first paragraph of Section 9.02, any resolution with respect to
any consent, waiver, request, demand, notice, authorization, direction or other
action that this Indenture expressly provides may be given by the holders of not
less than a specified percentage in outstanding principal amount of the Debt
Securities may be adopted at a meeting or an adjourned meeting duly reconvened
and at which a quorum is present as aforesaid only by the
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affirmative vote of the holders of not less than such specified percentage in
aggregate principal amount of the Debt Securities then outstanding.
Any resolution passed or decision taken at any meeting of holders of
Debt Securities duly held in accordance with this Section shall be binding on
all the Securityholders, whether or not present or represented at the meeting.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures without Consent of
Securityholders.
The Company, when authorized by a Board Resolution, and the Trustee may
from time to time and at any time enter into an indenture or indentures
supplemental hereto, without the consent of the Securityholders, for one or more
of the following purposes:
(a) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company,
pursuant to Article XI hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the holders of Debt Securities
as the Board of Directors shall consider to be for the protection of the holders
of such Debt Securities, and to make the occurrence, or the occurrence and
continuance, of a Default in any of such additional covenants, restrictions or
conditions a Default or an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect of any such additional covenant, restriction
or condition such supplemental indenture may provide for a particular period of
grace after Default (which period may be shorter or longer than that allowed in
the case of other Defaults) or may provide for an immediate enforcement upon
such Default or may limit the remedies available to the Trustee upon such
default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture, provided, that any such action shall not
adversely affect the interests of the holders of the Debt Securities then
outstanding;
(d) to add to, delete from, or revise the terms of Debt
Securities, including, without limitation, any terms relating to the issuance,
exchange, registration or transfer of Debt Securities, including to provide for
transfer procedures and restrictions substantially similar to those applicable
to the Capital Securities, as required by Section 2.05 (for purposes of assuring
that no registration of Debt Securities is required under the Securities Act),
provided, that any such action shall not adversely affect the interests of the
holders of the Debt Securities then outstanding (it being understood, for
purposes of this proviso, that transfer restrictions on Debt Securities
substantially similar to those applicable to Capital Securities shall not be
deemed to adversely affect the holders of the Debt Securities);
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(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debt Securities and to add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 6.10;
(f) to make any change (other than as elsewhere provided in this
Section) that does not adversely affect the rights of any Securityholder in any
material respect; or
(g) to provide for the issuance of and establish the form and
terms and conditions of the Debt Securities, to establish the form of any
certifications required to be furnished pursuant to the terms of this Indenture
or the Debt Securities, or to add to the rights of the holders of Debt
Securities.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed by the Company and the Trustee without the consent of the
holders of any of the Debt Securities at the time outstanding, notwithstanding
any of the provisions of Section 9.02.
Section 9.02 Supplemental Indentures with Consent of
Securityholders.
With the consent (evidenced as provided in Section 7.01) of the holders
of a majority in aggregate principal amount of the Debt Securities at the time
outstanding affected by such supplemental indenture (voting as a class), the
Company, when authorized by a Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act, then in
effect, applicable to indentures qualified thereunder) for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debt Securities; provided, however, that no
such supplemental indenture shall, without the consent of the holders of each
Debt Security then outstanding and affected thereby, (i) change the Maturity
Date of any Debt Security, or reduce the principal amount thereof or any premium
thereon, or reduce the rate (or manner of calculation of the rate) or extend the
time of payment of interest thereon, or reduce (other than as a result of the
maturity or earlier redemption of any such Debt Security in accordance with the
terms of this Indenture and such Debt Security) or increase the aggregate
principal amount of Debt Securities then outstanding, or change any of the
redemption provisions, or make the principal thereof or any interest or premium
thereon payable in any coin or currency other than United States Dollars, or
impair or affect the right of any Securityholder to institute suit for payment
thereof, or (ii) reduce the aforesaid percentage of Debt Securities the holders
of which are required to consent to any such supplemental indenture; and
provided, further, that if the Debt Securities are held by the Trust or the
trustee of the Trust, such supplemental indenture shall not be effective until
the holders of a majority in aggregate
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liquidation amount of the outstanding Capital Securities shall have consented to
such supplemental indenture; provided, further, that if the consent of the
Securityholder of each outstanding Debt Security is required, such supplemental
indenture shall not be effective until each holder of the outstanding Capital
Securities shall have consented to such supplemental indenture.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Debt Security Register. Any failure of the Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 9.03 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article IX, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debt Securities shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.04 Notation on Debt Securities.
Debt Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article IX may bear a
notation as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debt Securities so modified as to
conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared and executed by the Company, authenticated by the Trustee or the
Authenticating Agent and delivered in exchange for the Debt Securities then
outstanding.
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Section 9.05 Evidence of Compliance of Supplemental Indenture to
be Furnished to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02,
shall, in addition to the documents required by Section 14.06, receive an
Officers' Certificate as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this Article IX. The
Trustee shall also receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article IX is authorized or
permitted by, and conforms to, the terms of this Article IX and that it is
proper for the Trustee under the provisions of this Article IX to join in the
execution thereof.
ARTICLE X
REDEMPTION OF SECURITIES
Section 10.01 Optional Redemption.
The Company shall have the right, subject to the receipt by the Company
of the prior approval from the OTS, if then required under applicable capital
guidelines or policies of the OTS, to redeem the Debt Securities, in whole or
(provided that all accrued and unpaid interest has been paid on all Debt
Securities for all Interest Periods terminating on or prior to such date) from
time to time in part, on any Interest Payment Date on or after October 8, 2008
(each, an "Optional Redemption Date"), at the Optional Redemption Price.
Section 10.02 Special Event Redemption.
If a Special Event shall occur and be continuing, the Company shall
have the right, subject to the receipt by the Company of prior approval from the
OTS, if then required under applicable capital guidelines or policies of the
OTS, to redeem the Debt Securities, in whole but not in part, at any time within
90 days following the occurrence of such Special Event (the "Special Redemption
Date"), at the Special Redemption Price. In the event that the Special
Redemption Date falls on a day prior to the LIBOR Determination Date for any
Interest Period, then the Company shall be required to pay to Securityholders,
on the Business Day following such LIBOR Determination Date, any additional
amount of interest that would have been payable on the Special Redemption Date
had the amount of interest determined on such LIBOR Determination Date been
known on the first day of such Interest Period.
Section 10.03 Notice of Redemption; Selection of Debt Securities.
In case the Company shall desire to exercise the right to redeem all,
or, as the case may be, any part of the Debt Securities, it shall fix a date for
redemption and shall mail, or cause the Trustee to mail (at the expense of the
Company), a notice of such redemption at least 30 and not more than 60 days
prior to the date fixed for redemption to the holders of Debt Securities so to
be redeemed as a whole or in part at their last addresses as the same appear on
the Debt Security Register. Such mailing shall be by first class mail. The
notice if mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
holder of any Debt Security designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Debt Security.
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Each such notice of redemption shall specify the CUSIP number, if any,
of the Debt Securities to be redeemed, the date fixed for redemption, the price
at which Debt Securities are to be redeemed, the place or places of payment,
that payment will be made upon presentation and surrender of such Debt
Securities, that interest accrued to the date fixed for redemption will be paid
as specified in said notice, and that on and after said date interest thereon or
on the portions thereof to be redeemed will cease to accrue. If less than all
the Debt Securities are to be redeemed, the notice of redemption shall specify
the numbers of the Debt Securities to be redeemed. In case the Debt Securities
are to be redeemed in part only, the notice of redemption shall state the
portion of the principal amount thereof to be redeemed and shall state that on
and after the date fixed for redemption, upon surrender of such Debt Security, a
new Debt Security or Debt Securities in principal amount equal to the unredeemed
portion thereof will be issued.
Prior to 10:00 a.m., New York City time, on the Optional Redemption
Date or the Special Redemption Date specified in the notice of redemption given
as provided in this Section, the Company will deposit with the Trustee or with
one or more Paying Agents an amount of money sufficient to redeem on such date
all the Debt Securities so called for redemption at the applicable price
therefor, together with unpaid interest accrued to such date.
The Company will give the Trustee notice not less than 45 nor more than
75 days prior to the date fixed for redemption as to the price at which the Debt
Securities are to be redeemed and the aggregate principal amount of Debt
Securities to be redeemed and the Trustee shall select, in such manner as in its
sole discretion it shall deem appropriate and fair, the Debt Securities or
portions thereof (in integral multiples of $1,000) to be redeemed.
Section 10.04 Payment of Debt Securities Called for Redemption.
If notice of redemption has been given as provided in Section 10.03,
the Debt Securities or portions of Debt Securities with respect to which such
notice has been given shall become due and payable on the related Optional
Redemption Date or Special Redemption Date (as the case may be) and at the place
or places stated in such notice at the applicable price therefor, together with
unpaid interest accrued thereon to said Optional Redemption Date or the Special
Redemption Date (as the case may be), and on and after said Optional Redemption
Date or the Special Redemption Date (as the case may be) (unless the Company
shall default in the payment of such Debt Securities at the redemption price,
together with unpaid interest accrued thereon to said date) interest on the Debt
Securities or portions of Debt Securities so called for redemption shall cease
to accrue. On presentation and surrender of such Debt Securities at a place of
payment specified in said notice, such Debt Securities or the specified portions
thereof shall be paid and redeemed by the Company at the applicable price
therefor, together with unpaid interest accrued thereon to said Optional
Redemption Date or the Special Redemption Date (as the case may be).
Upon presentation of any Debt Security redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities of authorized denominations in principal amount
equal to the unredeemed portion of the Debt Security so presented.
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ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 11.01 Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in the Debt Securities shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of all or substantially all of the property or
capital stock of the Company or its successor or successors to any other
corporation (whether or not affiliated with the Company, or its successor or
successors) authorized to acquire and operate the same; provided, however, that
the Company hereby covenants and agrees that (i) upon any such consolidation,
merger (where the Company is not the surviving corporation), sale, conveyance,
transfer or other disposition, the successor entity shall be a corporation
organized and existing under the laws of the United States or any state thereof
or the District of Columbia (unless such corporation has (1) agreed to make all
payments due in respect of the Debt Securities or, if outstanding, the Trust
Securities and the Capital Securities Guarantee without withholding or deduction
for, or on account of, any taxes, duties, assessments or other governmental
charges under the laws or regulations of the jurisdiction of organization or
residence (for tax purposes) of such corporation or any political subdivision or
taxing authority thereof or therein unless required by applicable law, in which
case such corporation shall have agreed to pay such additional amounts as shall
be required so that the net amounts received and retained by the holders of such
Debt Securities or Trust Securities, as the case may be, after payment of all
taxes (including withholding taxes), duties, assessments or other governmental
charges, will be equal to the amounts that such holders would have received and
retained had no such taxes (including withholding taxes), duties, assessments or
other governmental charges been imposed, (2) irrevocably and unconditionally
consented and submitted to the jurisdiction of any United States federal court
or New York state court, in each case located in the Borough of Manhattan, The
City of New York, in respect of any action, suit or proceeding against it
arising out of or in connection with this Indenture or the Debt Securities and
irrevocably and unconditionally waived, to the fullest extent permitted by law,
any objection to the laying of venue in any such court or that any such action,
suit or proceeding has been brought in an inconvenient forum and (3) irrevocably
appointed an agent in The City of New York for service of process in any action,
suit or proceeding referred to in clause (2) above) and such corporation
expressly assumes all of the obligations of the Company under the Debt
Securities, this Indenture, the Capital Securities Guarantee and the Declaration
and (ii) after giving effect to any such consolidation, merger, sale,
conveyance, transfer or other disposition, no Default or Event of Default shall
have occurred and be continuing.
Section 11.02 Successor Entity to be Substituted.
In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and reasonably
satisfactory in form to the Trustee, of the due and punctual payment of the
principal of and premium, if any, and interest on all of the Debt Securities and
the due and punctual performance and observance of all of the covenants and
49
conditions of this Indenture to be performed or observed by the Company, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein as the Company, and thereupon the
predecessor entity shall be relieved of any further liability or obligation
hereunder or upon the Debt Securities. Such successor corporation thereupon may
cause to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Debt Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor corporation instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Debt Securities which previously shall have been signed and
delivered by the officers of the Company to the Trustee or the Authenticating
Agent for authentication, and any Debt Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Trustee or
the Authenticating Agent for that purpose. All the Debt Securities so issued
shall in all respects have the same legal rank and benefit under this Indenture
as the Debt Securities theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Debt Securities had been issued at
the date of the execution hereof.
Section 11.03 Opinion of Counsel to be Given to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall
receive, in addition to the Opinion of Counsel required by Section 9.05, an
Opinion of Counsel as conclusive evidence that any consolidation, merger, sale,
conveyance, transfer or other disposition, and any assumption, permitted or
required by the terms of this Article XI complies with the provisions of this
Article XI.
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 12.01 Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all
Debt Securities theretofore authenticated (other than any Debt Securities which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.06) and not theretofore canceled, or (b) all the
Debt Securities not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds,
which shall be immediately due and payable, sufficient to pay at maturity or
upon redemption all of the Debt Securities (other than any Debt Securities which
shall have been destroyed, lost or stolen and which shall have been replaced or
paid as provided in Section 2.06) not theretofore canceled or delivered to the
Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, but excluding, however, the amount
of any moneys for the payment of principal of and premium, if any, or interest
on the Debt Securities (1) theretofore repaid to the Company in accordance with
the provisions of Section 12.04, or (2) paid to any state or to the District of
50
Columbia pursuant to its unclaimed property or similar laws, and if in the case
of either clause (a) or (b) above the Company shall also pay or cause to be paid
all other sums payable hereunder by the Company, then this Indenture shall cease
to be of further effect except for the provisions of Sections 2.05, 2.06, 3.01,
3.02, 3.04, 6.06, 6.09 and 12.04 hereof, which shall survive until such Debt
Securities shall mature or are redeemed, as the case may be, and are paid in
full. Thereafter, Sections 6.06, 6.09 and 12.04 shall survive, and the Trustee,
on demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with, and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture, the
Company, however, hereby agreeing to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with this Indenture or the Debt Securities.
Section 12.02 Deposited Moneys to be Held in Trust by Trustee.
Subject to the provisions of Section 12.04, all moneys deposited with
the Trustee pursuant to Section 12.01 shall be held in trust and applied by it
to the payment, either directly or through any Paying Agent (including the
Company if acting as its own Paying Agent), to the holders of the particular
Debt Securities for the payment of which such moneys have been deposited with
the Trustee, of all sums due and to become due thereon for principal, premium,
if any, and interest.
Section 12.03 Paying Agent to Repay Moneys Held.
Upon the satisfaction and discharge of this Indenture, all moneys then
held by any Paying Agent of the Debt Securities (other than the Trustee) shall,
upon demand of the Company, be repaid to the Company or paid to the Trustee, and
thereupon such Paying Agent shall be released from all further liability with
respect to such moneys.
Section 12.04 Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any Paying Agent
for payment of the principal of and premium, if any, or interest on Debt
Securities and not applied but remaining unclaimed by the holders of Debt
Securities for two years after the date upon which the principal of and premium,
if any, or interest on such Debt Securities, as the case may be, shall have
become due and payable, shall be repaid to the Company by the Trustee or such
Paying Agent on written demand; and the holder of any of the Debt Securities
shall thereafter look only to the Company for any payment which such holder may
be entitled to collect and all liability of the Trustee or such Paying Agent
with respect to such moneys shall thereupon cease.
51
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 13.01 Indenture and Debt Securities Solely Corporate
Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Debt Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture, or
in any such Debt Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
officer, director, employee or agent, as such, past, present or future, of the
Company or of any predecessor or successor corporation of the Company, either
directly or through the Company or any successor corporation of the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Debt Securities.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.01 Successors.
All the covenants, stipulations, promises and agreements of the Company
contained in this Indenture shall bind its successors and assigns, whether so
expressed or not.
Section 14.02 Official Acts by Successor Entity.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee, officer or other authorized Person of any entity that
shall at the time be the lawful successor of the Company.
Section 14.03 Surrender of Company Powers.
The Company, by instrument in writing executed by authority of 2/3 (two
thirds) of its Board of Directors and delivered to the Trustee, may surrender
any of the powers reserved to the Company and thereupon such power so
surrendered shall terminate both as to the Company and as to any permitted
successor.
Section 14.04 Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the
Securityholders on the Company may be given or served in writing by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee for such purpose) to the Company at Harrington West Financial Group,
Inc., Attention: Lisa Watkins. Any notice, direction, request or demand by any
Securityholder or the Company to or
52
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made in writing at the office of Wilmington Trust
Company at Rodney Square North, 1100 North Market Street, Wilmington, DE
19890-0001, Attention: Corporate Trust Administration.
Section 14.05 Governing Law.
This Indenture and the Debt Securities shall each be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflict of laws principles of said State other than Section 5-1401 of the
New York General Obligations Law.
Section 14.06 Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee to take
any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that in the opinion of
the signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with (except that no such Opinion of Counsel is
required to be furnished to the Trustee in connection with the authentication
and issuance of Debt Securities issued on the date of this Indenture).
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (except certificates delivered pursuant to
Section 3.05) shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition; (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based; (c) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her 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 or not, in the opinion of
such person, such condition or covenant has been complied with.
Section 14.07 Business Day Convention.
Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Optional Redemption
Date or the Special Redemption Date, falls on a day that is not a Business Day,
then any interest payable will be paid on, and such Interest Payment Date will
be moved to, the next succeeding Business Day, and additional interest will
accrue for each day that such payment is delayed as a result thereof. If the
Maturity Date, any Optional Redemption Date or the Special Redemption Date falls
on a day that is not a Business Day, then the principal, premium, if any, and/or
interest payable on such date will be paid on the next succeeding Business Day,
and no additional interest will accrue in respect of such payment made on such
next succeeding Business Day.
53
Section 14.08 Table of Contents, Headings, etc.
The table of contents and the titles and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 14.09 Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one and the same instrument.
Section 14.10 Separability.
In case any one or more of the provisions contained in this Indenture
or in the Debt Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of such Debt
Securities, but this Indenture and such Debt Securities shall be construed as if
such invalid, illegal or unenforceable provision had never been contained herein
or therein.
Section 14.11 Assignment.
Subject to Article XI, the Company will have the right at all times to
assign any of its rights or obligations under this Indenture and the Debt
Securities to a direct or indirect wholly owned Subsidiary of the Company;
provided, however, that, in the event of any such assignment, the Company will
remain liable for all such obligations. Subject to the foregoing, this Indenture
is binding upon and inures to the benefit of the parties hereto and their
respective successors and assigns. This Indenture may not otherwise be assigned
by the parties thereto.
Section 14.12 Acknowledgment of Rights.
The Company acknowledges that, with respect to any Debt Securities held
by the Trust or a trustee of the Trust, if such trustee of the Trust fails to
enforce its rights under this Indenture as the holder of Debt Securities held as
the assets of the Trust after the holders of a majority in aggregate liquidation
amount of the outstanding Capital Securities of the Trust have so directed in
writing such trustee, a holder of record of such Capital Securities may, to the
fullest extent permitted by law, institute legal proceedings directly against
the Company to enforce such trustee's rights under this Indenture without first
instituting any legal proceedings against such trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or premium, if any, on or principal of the Debt Securities on the date
such interest, premium, if any, or principal is otherwise due and payable (or,
in the case of redemption, on the related Optional Redemption Date or the
Special Redemption Date (as the case may be)), the Company acknowledges that a
holder of outstanding Capital Securities of the Trust may directly institute a
proceeding against the Company for enforcement of payment to such holder
directly of the principal of or premium, if any, or interest on the Debt
Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the Capital Securities of such
54
holder on or after the respective due date (or Optional Redemption Date or
Special Redemption Date (as the case may be)) specified in the Debt Securities.
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
Section 15.01 Agreement to Subordinate.
The Company covenants and agrees, and each holder of Debt Securities
issued hereunder and under any supplemental indenture (the "Additional
Provisions") by such holder's acceptance thereof likewise covenants and agrees,
that all Debt Securities shall be issued subject to the provisions of this
Article XV; and each holder of a Debt Security, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
The payment by the Company of the payments due on all Debt Securities
issued hereunder and under any Additional Provisions shall, to the extent and in
the manner hereinafter set forth, be subordinated and junior in right of payment
to the prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the
occurrence of any default or Event of Default hereunder.
Section 15.02 Default on Senior Indebtedness.
In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company following any applicable grace period, or in
the event that the maturity of any Senior Indebtedness of the Company has been
accelerated because of a default, and such acceleration has not been rescinded
or canceled and such Senior Indebtedness has not been paid in full, then, in
either case, no payment shall be made by the Company with respect to the
payments due on the Debt Securities.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section, such payment shall, subject to Section 15.06, be held
in trust for the benefit of, and shall be paid over or delivered to, the holders
of Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or trustee) notify the Trustee in writing within 90 days of such
payment of the amounts then due and owing on the Senior Indebtedness and only
the amounts specified in such notice to the Trustee shall be paid to the holders
of Senior Indebtedness.
Section 15.03 Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution,
55
winding-up, liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due upon all Senior Indebtedness of the Company shall first be paid in
full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Company on the Debt Securities; and upon any
such dissolution, winding-up, liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Securityholders or the
Trustee would be entitled to receive from the Company, except for the provisions
of this Article XV, shall be paid by the Company, or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Securityholders or by the Trustee under this Indenture
if received by them or it, directly to the holders of Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Securityholders.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of, and shall be
paid over or delivered to, the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness of the
Company remaining unpaid to the extent necessary to pay such Senior Indebtedness
in full in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of such
Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided, that (a) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance, transfer or other
disposition of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XI of
this Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article XI of
56
this Indenture. Nothing in Section 15.02 or in this Section shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.06 of this
Indenture.
Section 15.04 Subrogation.
Subject to the payment in full of all Senior Indebtedness of the
Company, the Securityholders shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments or distributions of cash, property
or securities of the Company applicable to such Senior Indebtedness until all
payments due on the Debt Securities shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Securityholders or
the Trustee would be entitled except for the provisions of this Article XV, and
no payment over pursuant to the provisions of this Article XV to or for the
benefit of the holders of such Senior Indebtedness by Securityholders or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness of the Company, and the holders of the Debt Securities be
deemed to be a payment or distribution by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XV
are, and are intended, solely for the purposes of defining the relative rights
of the holders of the Debt Securities, on the one hand, and the holders of such
Senior Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture,
any Additional Provisions or in the Debt Securities is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Indebtedness of the Company, and the holders of the Debt Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Debt Securities all payments on the Debt Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the Debt
Securities and creditors of the Company other than the holders of Senior
Indebtedness of the Company, nor shall anything herein or therein prevent the
Trustee or the holder of any Debt Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XV of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article XV, the Trustee, subject to the provisions of Article VI of this
Indenture, and the Securityholders shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
57
Section 15.05 Trustee to Effectuate Subordination.
Each Securityholder, by such Securityholder's acceptance thereof,
authorizes and directs the Trustee on such Securityholder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder's
attorney-in-fact for any and all such purposes.
Section 15.06 Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee at the Principal Office of the Trustee of any fact known to the
Company that would prohibit the making of any payment of moneys to or by the
Trustee in respect of the Debt Securities pursuant to the provisions of this
Article XV. Notwithstanding the provisions of this Article XV or any other
provision of this Indenture or any Additional Provisions, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Trustee in respect of the Debt
Securities pursuant to the provisions of this Article XV unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of or premium, if
any, or interest on any Debt Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself or herself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 15.07 Rights of the Trustee; Holders of Senior
Indebtedness.
The Trustee, in its individual capacity, shall be entitled to all the
rights set forth in this Article XV in respect of any Senior Indebtedness at any
time held by it, to the same extent as
58
any other holder of Senior Indebtedness, and nothing in this Indenture or any
Additional Provisions shall deprive the Trustee of any of its rights as such
holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture or any Additional Provisions against the
Trustee. The Trustee shall not owe or be deemed to owe any fiduciary duty to the
holders of such Senior Indebtedness and, subject to the provisions of Article VI
of this Indenture, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Securityholders, the Company or
any other Person money or assets to which any holder of such Senior Indebtedness
shall be entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06.
Section 15.08 Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company, or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company, with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Company may, at any time and from time
to time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Debt Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (c) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company or any other Person.
59
EXHIBIT A
FORM OF DEBT SECURITY
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) OF THE SECURITIES ACT)
AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST
OR PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY,
AS MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER", AS
DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (A) (1), (2), (3), (7) OR (8) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (D)
PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE
WITH THE
A-1
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR
THEREOF, AS THE CASE MAY BE, AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY
ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS
AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT
OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY
ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER
U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60,
91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
OF THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR
HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND
HOLDING HEREOF OR THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,
OR (ii) SUCH PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM
DENOMINATIONS OF $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY
ATTEMPTED TRANSFER OF THIS SECURITY IN DENOMINATIONS OF LESS THAN $100,000 SHALL
BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE
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61
SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF DISTRIBUTIONS ON THIS SECURITY OR SUCH INTEREST OR PARTICIPATION, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN.
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED
STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT
INSURANCE CORPORATION (THE "FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE
CLAIMS OF THE DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES AND IS NOT SECURED.
Floating Rate Junior Subordinated Debt Security due 2033
of
HARRINGTON WEST FINANCIAL GROUP, INC.
Harrington West Financial Group, Inc., a savings and loan holding
company incorporated in Harrington West Financial Group, Inc. (the "Company",
which term includes any successor permitted under the Indenture (as defined
herein)), for value received, promises to pay to Wilmington Trust Company, not
in its individual capacity but solely as Institutional Trustee for Harrington
West Capital Trust I, a Delaware statutory trust, or registered assigns, the
principal amount of FIFTEEN MILLION FOUR HUNDRED SIXTY FOUR THOUSAND Dollars
($15,464,000) on October 8, 2033 (the "Maturity Date") (or any Optional
Redemption Date or the Special Redemption Date, each as defined herein, or any
earlier date of acceleration of the maturity of this Debt Security), and to pay
interest on the outstanding principal amount of this Debt Security from
September 25, 2003, or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, quarterly (subject
to deferral as set forth herein) in arrears on January 8, April 8, July 8 and
October 8 of each year, commencing on January 8, 2004 (each, an "Interest
Payment Date"), at a floating rate per annum, which, with respect to any
Interest Period (as defined in the Indenture), will be equal to LIBOR (as
defined in the Indenture), as determined on the LIBOR Determination Date (as
defined in the Indenture) for such Interest Period, plus 2.85 % (the "Interest
Rate") (provided that the Interest Rate for any Interest Period may not exceed
the highest rate permitted by New York law, as the same may be modified by
United States law of general application) until the principal hereof shall have
been paid or duly provided for, and on any overdue principal and (without
duplication and to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at an annual rate equal
to the then applicable Interest Rate, compounded quarterly. The amount of
interest payable for any Interest Period shall be computed on the basis of a
360-day year and the actual number of days elapsed in such Interest Period.
The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose
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name this Debt Security (or one or more Predecessor Securities, as defined in
the Indenture) is registered at the close of business on the "regular record
date" for such interest installment, which shall be the fifteenth day prior to
such Interest Payment Date, whether or not such day is a Business Day (as
defined herein). Any such interest installment (other than Deferred Interest (as
defined herein)) not punctually paid or duly provided for shall forthwith cease
to be payable to the holders on such regular record date and may be paid to the
Person in whose name this Debt Security (or one or more Predecessor Securities)
is registered at the close of business on a special record date to be fixed by
the Trustee for the payment of such defaulted interest, notice whereof shall be
given to the holders of the Debt Securities not less than 10 days prior to such
special record date, all as more fully provided in the Indenture.
Payment of the principal of and premium, if any, and interest on this
Debt Security due on the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, shall be made in immediately
available funds against presentation and surrender of this Debt Security at the
office or agency of the Trustee maintained for that purpose in Wilmington,
Delaware, or at the office or agency of any other Paying Agent appointed by the
Company maintained for that purpose in Wilmington, Delaware or Sacramento,
California. Payment of interest on this Debt Security due on any Interest
Payment Date other than the Maturity Date, any Optional Redemption Date or the
Special Redemption Date, as the case may be, shall be made at the option of the
Company by check mailed to the holder thereof at such address as shall appear in
the Debt Security Register or by wire transfer of immediately available funds to
an account appropriately designated by the holder hereof. Notwithstanding the
foregoing, so long as the holder of this Debt Security is the Institutional
Trustee, payment of the principal of and premium, if any, and interest on this
Debt Security shall be made in immediately available funds when due at such
place and to such account as may be designated by the Institutional Trustee. All
payments in respect of this Debt Security shall be payable in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts.
Notwithstanding anything to the contrary contained herein, if any
Interest Payment Date, other than the Maturity Date, any Optional Redemption
Date or the Special Redemption Date, falls on a day that is not a Business Day,
then any interest payable will be paid on, and such Interest Payment Date will
be moved to, the next succeeding Business Day, and additional interest will
accrue for each day that such payment is delayed as a result thereof. If the
Maturity Date, any Optional Redemption Date or the Special Redemption Date falls
on a day that is not a Business Day, then the principal, premium, if any, and/or
interest payable on such date will be paid on the next succeeding Business Day,
and no additional interest will accrue in respect of such payment made on such
next succeeding Business Day.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, from time to time and without causing an Event of
Default, to defer payments of interest on the Debt Securities by extending the
interest payment period on the Debt Securities at any time and from time to time
during the term of the Debt Securities, for up to 20 consecutive quarterly
periods (each such extended interest payment period, together with all previous
and further consecutive extensions thereof, is referred to herein as an
"Extension Period"). No Extension Period may end on a date other than an
Interest Payment Date or extend beyond the Maturity Date, any Optional
Redemption Date or the Special Redemption Date, as the case may
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be. During any Extension Period, interest will continue to accrue on the Debt
Securities, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as "Deferred Interest") will accrue at an
annual rate equal to the Interest Rate applicable during such Extension Period,
compounded quarterly from the date such Deferred Interest would have been
payable were it not for the Extension Period, to the extent permitted by
applicable law. No interest or Deferred Interest (except any Additional Amounts
(as defined in the Indenture) that may be due and payable) shall be due and
payable during an Extension Period, except at the end thereof. At the end of any
Extension Period, the Company shall pay all Deferred Interest then accrued and
unpaid on the Debt Securities; provided, however, that during any Extension
Period, the Company may not (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Company's capital stock or (ii) make any payment of principal of or
premium, if any, or interest on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior in
interest to the Debt Securities (other than (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company (A) in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of one or more employees, officers, directors or consultants,
(B) in connection with a dividend reinvestment or stockholder stock purchase
plan or (C) in connection with the issuance of capital stock of the Company (or
securities convertible into or exercisable for such capital stock), as
consideration in an acquisition transaction entered into prior to such Extension
Period, (b) as a result of any exchange or conversion of any class or series of
the Company's capital stock (or any capital stock of a subsidiary of the
Company) for any class or series of the Company's capital stock or of any class
or series of the Company's indebtedness for any class or series of the Company's
capital stock, (c) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any stockholder's rights plan, or
the issuance of rights, stock or other property under any stockholder's rights
plan, or the redemption or repurchase of rights pursuant thereto or (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock). Prior to the termination of any
Extension Period, the Company may further extend such Extension Period,
provided, that no Extension Period (including all previous and further
consecutive extensions that are part of such Extension Period) shall exceed 20
consecutive quarterly periods. Upon the termination of any Extension Period and
upon the payment of all Deferred Interest, the Company may commence a new
Extension Period, subject to the foregoing requirements. The Company must give
the Trustee notice of its election to begin or extend an Extension Period at
least one Business Day prior to the earlier of (i) the next succeeding date on
which interest on the Debt Securities would have been payable except for the
election to begin or extend such Extension Period or (ii) the date such interest
is payable, but in any event not later than the related regular record date.
The indebtedness evidenced by this Debt Security is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness (as defined in the Indenture),
and this Debt Security is issued subject to the provisions of the Indenture with
respect thereto. Each holder of this Debt Security, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on such holder's behalf to take such action as may be necessary or
appropriate to
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acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee such holder's attorney-in-fact for any and all such purposes. Each
holder hereof, by such holder's acceptance hereof, hereby waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
The Company waives diligence, presentment, demand for payment, notice
of nonpayment, notice of protest, and all other demands and notices.
This Debt Security shall not be entitled to any benefit under the
Indenture hereinafter referred to and shall not be valid or become obligatory
for any purpose until the certificate of authentication hereon shall have been
signed by or on behalf of the Trustee.
The provisions of this Debt Security are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
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[FORM OF REVERSE OF SECURITY]
This Debt Security is one of a duly authorized series of debt
securities of the Company (collectively, the "Debt Securities"), all issued or
to be issued pursuant to an Indenture (the "Indenture"), dated as of September
25, 2003, duly executed and delivered between the Company and Wilmington Trust
Company, as Trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debt Securities of which this Debt
Security is a part.
Upon the occurrence and continuation of a Tax Event, an Investment
Company Event or a Capital Treatment Event (each, a "Special Event"), the
Company shall have the right to redeem this Debt Security, at its option, in
whole with all other Debt Securities but not in part, at any time, within 90
days following the occurrence of such Special Event (the "Special Redemption
Date"), at the Special Redemption Price (as defined herein). In the event that
the Special Redemption Date falls on a day prior to the LIBOR Determination Date
for any Interest Period, then the Company shall be required to pay to
Securityholders, on the Business Day following such LIBOR Determination Date,
any additional amount of interest that would have been payable on the Special
Redemption Date had the amount of interest determined on such LIBOR
Determination Date been known on the first day of such Interest Period.
The Company shall also have the right to redeem this Debt Security at
its option, in whole or (provided that all accrued and unpaid interest has been
paid on all Debt Securities for all Interest Periods terminating on or prior to
such date) from time to time in part, on any Interest Payment Date on or after
October 8, 2008 (each, an "Optional Redemption Date"), at the Optional
Redemption Price (as defined herein).
Any redemption pursuant to the preceding two paragraphs will be made,
subject to receipt by the Company of prior approval from the Office of Thrift
Supervision (the "OTS") if then required under applicable capital guidelines or
policies of the OTS, upon not less than 30 days' nor more than 60 days' prior
written notice. If the Debt Securities are only partially redeemed by the
Company, the Debt Securities will be redeemed pro rata or by any other method
utilized by the Trustee. In the event of redemption of this Debt Security in
part only, a new Debt Security or Debt Securities for the unredeemed portion
hereof will be issued in the name of the holder hereof upon the cancellation
hereof.
"Optional Redemption Price" means an amount in cash equal to 100% of
the principal amount of this Debt Security being redeemed plus unpaid interest
accrued thereon to the Optional Redemption Date or, in the case of a redemption
due to the occurrence of a Special Event, to the Special Redemption Date if the
Special Redemption Date is on or after October 8, 2008.
"Special Redemption Price" means an amount in cash equal to the
percentage for the principal amount of this Debt Security that is specified
below for the Special Redemption Date plus unpaid interest accrued thereon to
the Special Redemption Date:
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Special Redemption During the 12-Month
Period Beginning October 8, Percentage of Principal Amount
2003 104.40%
2004 103.52%
2005 102.64%
2006 101.76%
2007 100.88%
2008 and thereafter 100%
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debt Securities may be
declared, and, in certain cases, shall ipso facto become, due and payable, and
upon any such declaration of acceleration shall become due and payable, in each
case, in the manner, with the effect and subject to the conditions provided in
the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the Debt Securities at the time outstanding affected thereby, as
specified in the Indenture, to execute supplemental indentures for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Debt Securities; provided, however,
that no such supplemental indenture shall, among other things, without the
consent of the holders of each Debt Security then outstanding and affected
thereby (i) change the Maturity Date of any Debt Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate (or manner
of calculation of the rate) or extend the time of payment of interest thereon,
or reduce (other than as a result of the maturity or earlier redemption of any
such Debt Security in accordance with the terms of the Indenture and such Debt
Security) or increase the aggregate principal amount of Debt Securities then
outstanding, or change any of the redemption provisions, or make the principal
thereof or any interest or premium thereon payable in any coin or currency other
than United States Dollars, or impair or affect the right of any holder to
institute suit for payment thereof, or (ii) reduce the aforesaid percentage of
Debt Securities the holders of which are required to consent to any such
supplemental indenture. The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Debt Securities at
the time outstanding, on behalf of the holders of all the Debt Securities, to
waive any past default in the performance of any of the covenants contained in
the Indenture, or established pursuant to the Indenture, and its consequences,
except (a) a default in payments due in respect of any of the Debt Securities,
(b) in respect of covenants or provisions of the Indenture which cannot be
modified or amended without the consent of the holder of each Debt Security
affected, or (c) in respect of the covenants of the Company relating to its
ownership of Common Securities of the Trust. Any such consent or waiver by the
holder of this Debt Security (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon
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all future holders and owners of this Debt Security and of any Debt Security
issued in exchange herefor or in place hereof (whether by registration of
transfer or otherwise), irrespective of whether or not any notation of such
consent or waiver is made upon this Debt Security.
No reference herein to the Indenture and no provision of this Debt
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to make all payments due on this
Debt Security at the time and place and at the rate and in the money herein
prescribed.
As provided in the Indenture and subject to certain limitations herein
and therein set forth, this Debt Security is transferable by the holder hereof
on the Debt Security Register (as defined in the Indenture) of the Company, upon
surrender of this Debt Security for registration of transfer at the office or
agency of the Trustee in Wilmington, Delaware, or at any other office or agency
of the Company in Wilmington, Delaware or Sacramento, California, accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Debt
Securities of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such registration of transfer, but the Company or
the Trustee may require payment of a sum sufficient to cover any tax, fee or
other governmental charge payable in relation thereto as specified in the
Indenture.
Prior to due presentment for registration of transfer of this Debt
Security, the Company, the Trustee, any Authenticating Agent, any Paying Agent,
any transfer agent and the Debt Security registrar may deem and treat the holder
hereof as the absolute owner hereof (whether or not this Debt Security shall be
overdue and notwithstanding any notice of ownership or writing hereon) for the
purpose of receiving payment of the principal of and premium, if any, and
interest on this Debt Security and for all other purposes, and none of the
Company, the Trustee, any Authenticating Agent, any Paying Agent, any transfer
agent or any Debt Security registrar shall be affected by any notice to the
contrary.
As provided in the Indenture and subject to certain limitations herein
and therein set forth, Debt Securities are exchangeable for a like aggregate
principal amount of Debt Securities of different authorized denominations, as
requested by the holder surrendering the same.
The Debt Securities are issuable only in registered certificated form
without coupons.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Debt Security, or for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer, director, employee or
agent, past, present or future, as such, of the Company or of any predecessor or
successor corporation of the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
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All terms used but not defined in this Debt Security shall have the
meanings assigned to them in the Indenture.
THIS DEBT SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
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