EXHIBIT 4(c)
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AMENDED AND RESTATED DECLARATION
OF TRUST
BY AND AMONG
JPMORGAN CHASE BANK
AS PROPERTY TRUSTEE,
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
AS DELAWARE TRUSTEE
BANCINSURANCE CORPORATION,
AS SPONSOR,
AND
JOHN SOKOL, SI SOKOL AND SALLY CRESS
AS ADMINISTRATORS,
DATED AS OF SEPTEMBER 30, 2003
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TABLE OF CONTENTS
PAGE
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ARTICLE I INTERPRETATION AND DEFINITIONS............................................................ 1
Section 1.1. Definitions...................................................................... 1
ARTICLE II ORGANIZATION.............................................................................. 8
Section 2.1. Name............................................................................. 8
Section 2.2. Office........................................................................... 8
Section 2.3. Purpose.......................................................................... 8
Section 2.4. Authority........................................................................ 8
Section 2.5. Title to Property of the Trust................................................... 9
Section 2.6. Powers and Duties of the Trustees and the Administrators......................... 9
Section 2.7. Prohibition of Actions by the Trust and the Property Trustee..................... 12
Section 2.8. Powers and Duties of the Property Trustee........................................ 13
Section 2.9. Certain Duties and Responsibilities of the Property Trustee and
Administrators................................................................... 15
Section 2.10. Certain Rights of Property Trustee............................................... 16
Section 2.11. Execution of Documents........................................................... 19
Section 2.12. Not Responsible for Recitals or Issuance of Securities........................... 19
Section 2.13. Duration of Trust................................................................ 19
Section 2.14. Mergers.......................................................................... 19
ARTICLE III SPONSOR................................................................................... 21
Section 3.1. Sponsor's Purchase of Common Securities.......................................... 21
Section 3.2. Responsibilities of the Sponsor.................................................. 21
Section 3.3. Expenses......................................................................... 21
Section 3.4. Right to Proceed................................................................. 22
ARTICLE IV PROPERTY TRUSTEE, DELAWARE TRUSTEE AND ADMINISTRATORS..................................... 22
Section 4.1. Property Trustee; Eligibility.................................................... 22
Section 4.2. Administrators................................................................... 23
Section 4.3. Appointment, Removal and Resignation of Property Trustee and
Administrators................................................................... 23
Section 4.4. Property Trustee Vacancies....................................................... 25
Section 4.5. Effect of Vacancies.............................................................. 25
Section 4.6. Meetings of the Property Trustee and the Administrators.......................... 25
Section 4.7. Delegation of Power.............................................................. 25
Section 4.8. Conversion, Consolidation or Succession to Business.............................. 26
Section 4.9. Delaware Trustee................................................................. 26
ARTICLE V DISTRIBUTIONS............................................................................. 26
Section 5.1. Distributions.................................................................... 26
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TABLE OF CONTENTS
(continued)
ARTICLE VI ISSUANCE OF SECURITIES.................................................................... 26
Section 6.1. General Provisions Regarding Securities.......................................... 26
Section 6.2. Registrar and Paying Agent....................................................... 27
Section 6.3. Form and Dating.................................................................. 29
Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates................................ 29
Section 6.5. Temporary Securities............................................................. 30
Section 6.6. Cancellation..................................................................... 30
Section 6.7. Rights of Holders; Waivers of Past Defaults...................................... 30
ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST...................................................... 32
Section 7.1. Dissolution and Termination of Trust............................................. 32
ARTICLE VIII TRANSFER OF INTERESTS..................................................................... 33
Section 8.1. General.......................................................................... 33
Section 8.2. Transfer Procedures and Restrictions............................................. 34
Section 8.3. Deemed Security Holders.......................................................... 36
ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, PROPERTY TRUSTEE OR OTHERS.............. 36
Section 9.1. Liability........................................................................ 36
Section 9.2. Exculpation...................................................................... 37
Section 9.3. Fiduciary Duty................................................................... 37
Section 9.4. Indemnity........................................................................ 37
Section 9.5. Outside Businesses............................................................... 38
Section 9.6. Compensation; Fee................................................................ 39
ARTICLE X ACCOUNTING................................................................................ 39
Section 10.1. Fiscal Year...................................................................... 39
Section 10.2. Certain Accounting Matters....................................................... 39
Section 10.3. Banking.......................................................................... 40
Section 10.4. Withholding...................................................................... 40
ARTICLE XI AMENDMENTS AND MEETINGS................................................................... 41
Section 11.1. Amendments....................................................................... 41
Section 11.2. Meetings of the Holders of Securities; Action by Written Consent................. 43
ARTICLE XII REPRESENTATIONS OF PROPERTY TRUSTEE....................................................... 44
Section 12.1. Representations and Warranties of Property Trustee............................... 44
ARTICLE XIII MISCELLANEOUS............................................................................. 44
Section 13.1. Notices.......................................................................... 44
Section 13.2. Governing Law.................................................................... 46
Section 13.3. Intention of the Parties......................................................... 46
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TABLE OF CONTENTS
(continued)
Section 13.4. Headings......................................................................... 46
Section 13.5. Successors and Assigns........................................................... 46
Section 13.6. Partial Enforceability........................................................... 46
Section 13.7. Counterparts..................................................................... 46
ANNEX I TERMS OF SECURITIES
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE [FORM OF FACE OF
SECURITY]
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE
EXHIBIT B SPECIMEN OF INITIAL DEBENTURE
EXHIBIT C PURCHASE AGREEMENT
EXHIBIT D Form of Transferor Certificate to be Executed by QIBs
EXHIBIT E FORM OF TRANSFEREE CERTIFICATE TO BE EXECUTED BY TRANSFEREES
OTHER THAN QIBS
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
BIC STATUTORY TRUST II
SEPTEMBER 30, 2003
AMENDED AND RESTATED DECLARATION OF TRUST ("Trust Agreement") dated and
effective as of September 30, 2003, by the Property Trustee (as defined herein),
the Delaware Trustee (as defined herein), the Administrators (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust (as defined herein)
to be issued pursuant to this Trust Agreement;
WHEREAS, the Property Trustee, the Delaware Trustee, the Administrators
and the Sponsor established BIC Statutory Trust II (the "Trust"), a statutory
trust under the Statutory Trust Act (as defined herein) pursuant to a
Declaration of Trust dated as of September 25, 2003 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of the State
of the State of Delaware on September 25, 2003, for the sole purpose of issuing
and selling certain securities representing undivided beneficial interests in
the assets of the Trust and investing the proceeds thereof in certain debentures
of the Debenture Issuer (as defined herein); and
WHEREAS, the parties hereto, by this Trust Agreement, amend and restate
each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act and that
this Trust Agreement constitutes the governing instrument of such statutory
trust, the Property Trustee declares that all assets contributed to the Trust
will be held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Trust Agreement. The
parties hereto hereby agree as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. DEFINITIONS. Unless the context otherwise requires:
(a) Capitalized terms used in this Trust Agreement but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Trust Agreement has the same
meaning throughout;
(c) all references to "the Trust Agreement" or "this Trust
Agreement" are to this Trust Agreement as modified, supplemented or amended from
time to time;
(d) all references in this Trust Agreement to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Trust Agreement unless otherwise specified; and
(e) a reference to the singular includes the plural and vice
versa.
"Additional Interest" has the meaning set forth in the Indenture.
"Administrative Action" has the meaning set forth in paragraph 4(a) of
Annex I.
"Administrators" means each of John Sokol, Si Sokol and Sally Cress,
solely in such Person's capacity as Administrator of the Trust and not in such
Person's individual capacity, or such Administrator's successor in interest in
such capacity, or any successor appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(b) such Person 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 or sequestrator (or
other similar official) of such Person 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.
"Business Day" means any day other than Saturday, Sunday or any other
day on which banking institutions in New York City, Houston, Texas or
Wilmington, Delaware are permitted or required by any applicable law to close.
"Calculation Agent" shall mean the Person appointed as Calculation
Agent pursuant to Section 2.10 of the Indenture.
"Certificate" means any certificate evidencing Securities.
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"Closing Date" has the meaning set forth in the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Common Securities" has the meaning set forth in paragraph 1(b) of
Annex I.
"Common Security Certificate" means a definitive Certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Administrator; (b) any
Affiliate of any Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Trust Agreement is located at 600 Travis, Suite 1150, Houston,
Texas 77002, Attention: Institutional Trust Services.
"Coupon Rate" has the meaning set forth in paragraph 2(a) of Annex I.
"Covered Person" means: (a) any Administrator, officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) any of the Trust's Affiliates; and (b) any Holder of Securities.
"Creditor" has the meaning set forth in Section 3.3.
"Debenture Issuer" means Bancinsurance Corporation, an Ohio
corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means JPMorgan Chase Bank, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the Floating Rate Junior Subordinated Deferrable
Interest Debentures due 2033 to be issued by the Debenture Issuer under the
Indenture.
"Defaulted Interest" has the meaning set forth in the Indenture.
"Delaware Trustee" means Chase Manhattan Bank USA, National
Association, a national banking association, solely in its capacity as Delaware
Trustee of the Trust and not in its individual capacity, or its
successor-in-interest in such capacity, or any successor Delaware Trustee
appointed as herein provided.
"Direct Action" has the meaning set forth in Section 2.8(d).
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 5.1.
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"Distribution Payment Date" has the meaning set forth in paragraph 2(b)
of Annex I.
"Distribution Period" has the meaning set forth in paragraph 2(a) of
Annex I.
"Event of Default" means any one of the following events (whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the occurrence of an Indenture Event of Default; or
(b) default by the Trust in the payment of any Optional Redemption
Price of any Security when it becomes due and payable; or
(c) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Property Trustee in this Trust
Agreement (other than those specified in clause (a) or (b) above) and
continuation of such default or breach for a period of 60 days after there has
been given, by registered or certified mail to the Property Trustee and to the
Sponsor by the Holders of at least 25% in aggregate liquidation amount of the
outstanding Preferred Securities, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(d) the occurrence of a Bankruptcy Event with respect to the
Property Trustee if a successor Property Trustee has not been appointed within
90 days thereof.
"Extension Period" has the meaning set forth in paragraph 2(b) of Annex
I.
"Fee Letter" means the fee letter, dated as of the date hereof, between
Bancinsurance Corporation and JPMorgan Chase Bank, in its capacity as trustee
under various agreements, including this Trust Agreement.
"Fiduciary Indemnified Person" shall mean the Property Trustee, the
Delaware Trustee, any Affiliate of the Property Trustee or the Delaware Trustee,
and any officers, directors, shareholders, members, partners, employees,
representatives, custodians, nominees or agents of the Property Trustee or the
Delaware Trustee.
"Fiscal Year" has the meaning set forth in Section 10.1.
"Guarantee" means the guarantee agreement to be dated as of the Closing
Date, of the Sponsor in respect of the Preferred Securities.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Statutory Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
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"Indenture" means the Indenture dated as of the Closing Date, between
the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued, as such Indenture and
any supplemental indenture may be amended, supplemented or otherwise modified
from time to time.
"Indenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Interest" means any interest due on the Debentures including any
Additional Interest and Defaulted Interest.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in paragraph 4(a)
of Annex I.
"LIBOR Determination Date" has the meaning set forth in paragraph 4(a)
of Annex I.
"Liquidation" has the meaning set forth in paragraph 3 of Annex I.
"Liquidation Distribution" has the meaning set forth in paragraph 3 of
Annex I.
"Majority in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Maturity Date" has the meaning set forth in paragraph 4(a) of Annex I.
"Officers' Certificates" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person, and, with respect
to the Administrators, a certificate signed by at least two Administrators. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for it in this Trust Agreement shall include:
(a) a statement that each individual signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each individual in rendering the Officers'
Certificate;
(c) a statement that each such individual signing the Officers'
Certificate has made such examination or investigation as, in such individual's
opinion, is necessary to enable such
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individual to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Optional Redemption Price" has the meaning set forth in paragraph 4(a)
of Annex I.
"Paying Agent" means any Person authorized by the Administrators to pay
Distributions or other amounts in respect of any Securities on behalf of the
Trust.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning set forth in paragraph 1(a) of
Annex I.
"Preferred Security Certificate" means a definitive Certificate in
fully registered form representing a Preferred Security substantially in the
form of Exhibit A-1.
"Property Account" has the meaning set forth in Section 2.8(c).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 4.1.
"Pro Rata" has the meaning set forth in paragraph 8 of Annex I.
"Purchase Agreement" means the Purchase Agreement relating to the
offering and sale of Preferred Securities in the form of Exhibit C.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act.
"Quorum" means a majority of the Administrators or, if there are only
two Administrators, both of them.
"Redemption Date" has the meaning set forth in paragraph 4(a) of Annex
I.
"Redemption/Distribution Notice" has the meaning set forth in paragraph
4(e) of Annex I.
"Registrar" has the meaning set forth in Section 6.2.
"Responsible Officer" means, with respect to the Property Trustee, any
officer in the Institutional Trust Services Department of the Property Trustee
having direct responsibility for the administration of this Trust Agreement.
"Restricted Securities Legend" has the meaning set forth in Section
8.2(b).
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"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Special Event" has the meaning set forth in paragraph 4(a) of Annex I.
"Special Redemption Date" has the meaning set forth in paragraph 4(a)
of Annex I.
"Special Redemption Price" has the meaning set forth in paragraph 4(a)
of Annex I.
"Sponsor" means Bancinsurance Corporation, an Ohio corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del.C.Section 3801, et seq. as may be amended from time to time.
"Successor Entity" has the meaning set forth in Section 2.14(b).
"Successor Property Trustee" has the meaning set forth in Section
4.3(a).
"Successor Securities" has the meaning set forth in Section 2.14(b).
"Super Majority" has the meaning set forth in paragraph 5(b) of Annex
I.
"Tax Event" has the meaning set forth in paragraph 4(a) of Annex I.
"3-Month LIBOR" has the meaning set forth in paragraph 4(a) of Annex I.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustees" means the Property Trustee and the Delaware Trustee.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Property Trustee pursuant to the trusts of this Trust
Agreement.
"25% in liquidation amount of the Securities" means Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Preferred Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of 25%
or more of the aggregate liquidation amount (including the stated amount
7
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"U.S. Person" means a United States Person as defined in Section
7701(a)(30) of the Code.
ARTICLE II
ORGANIZATION
SECTION 2.1. NAME. The Trust is named "BIC Statutory Trust II," as such
name may be modified from time to time by the Administrators following written
notice to the Holders of the Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the
Administrators.
SECTION 2.2. OFFICE. The address of the Delaware Trustee in the State
of Delaware is Chase Manhattan Bank USA, National Association, c/o JPMorgan
Chase Bank, 500 Stanton Christiana Road, Building 4, (3rd Floor), Newark,
Delaware, 19713, Attention: Institutional Trust Services, or such other address
in the State of Delaware as the Delaware Trustee may designate by written notice
to the Holders, the Sponsor, the Property Trustee and the Administrators. The
principal executive office of the Trust is c/o Bancinsurance Corporation, 250
East Broad Street, 10th Floor, Columbus, Ohio 43215. On at least 10 Business
Days written notice to the Holders of the Securities, the Administrators may
designate another principal office, which shall be in a state of the United
States or in the District of Columbia.
SECTION 2.3. PURPOSE. The exclusive purposes and functions of the Trust
are (a) to issue and sell the Securities representing undivided beneficial
interests in the assets of the Trust, (b) to invest the gross proceeds from such
sale to acquire the Debentures, (c) to facilitate direct investment in the
assets of the Trust through issuance of the Common Securities and the Preferred
Securities and (d) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 2.4. AUTHORITY. Except as specifically provided in this Trust
Agreement, the Property Trustee shall have exclusive and complete authority to
carry out the purposes of the Trust. An action taken by the Property Trustee in
accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Property Trustee acting on behalf of the Trust, no
Person shall be required to inquire into the authority of the Property Trustee
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Property Trustee as set forth in
this Trust Agreement. The Administrators shall have only those ministerial
duties set forth herein with respect to accomplishing the purposes of the Trust
and are not intended to be trustees or fiduciaries with respect to the Trust or
the Holders. The Property Trustee shall have the right, but shall not be
obligated except as provided in Section 2.6, to perform those duties assigned to
the Administrators.
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SECTION 2.5. TITLE TO PROPERTY OF THE TRUST. Except as provided in
Section 2.8 with respect to the Debentures and the Property Account or as
otherwise provided in this Trust Agreement, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.
SECTION 2.6. POWERS AND DUTIES OF THE TRUSTEES AND THE ADMINISTRATORS.
(a) The Trustees and the Administrators shall conduct the affairs
of the Trust in accordance with the terms of this Trust Agreement. Subject to
the limitations set forth in paragraph (b) of this Section, and in accordance
with the following provisions (i) and (ii), the Property Trustee and the
Administrators shall have the authority to enter into all transactions and
agreements in exercising the authority, express or implied, otherwise granted to
the Property Trustee or the Administrators, as the case may be, under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(i) Each Administrator shall have the power and authority
to act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Securities;
(B) to cause the Trust to enter into, and to
execute and deliver on behalf of the Trust, such agreements as
may be necessary or desirable in connection with the purposes
and function of the Trust, including agreements with the
Paying Agent;
(C) ensuring compliance with the Securities Act
and applicable state securities or blue sky laws;
(D) the sending of notices (other than notices
of default), and other information regarding the Securities
and the Debentures to the Holders in accordance with this
Trust Agreement;
(E) the consent to the appointment of a Paying
Agent and Registrar in accordance with this Trust Agreement,
which consent shall not be unreasonably withheld or delayed;
(F) execution and delivery of the Securities in
accordance with this Trust Agreement;
(G) execution and delivery of closing
certificates pursuant to the Purchase Agreement and the
application for a taxpayer identification number;
(H) unless otherwise required by the Statutory
Trust Act, to execute on behalf of the Trust (either acting
alone or together with any or all of the Administrators) any
documents that the Administrators have the power to execute
pursuant to this Trust Agreement including execution of any
Officer's Certificate required pursuant to Section 11.1;
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(I) the taking of any action incidental to the
foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement for the benefit of the Holders
(without consideration of the effect of any such action on any
particular Holder);
(J) to establish a record date with respect to
all actions to be taken hereunder that require a record date
be established, including Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to
the Holders of Preferred Securities and Holders of Common
Securities as to such actions and applicable record dates; and
(K) to duly prepare and file all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust on behalf of the Trust.
(ii) As among the Property Trustee and the Administrators,
the Property Trustee shall have the power, duty and authority to act on behalf
of the Trust with respect to the following matters:
(A) the establishment of the Property Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and
any other payments made in respect of the Debentures in the
Property Account;
(D) the distribution through the Paying Agent of
amounts owed to the Holders in respect of the Securities;
(E) the exercise of all of the rights, powers
and privileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Securities and the Debentures to the
Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and liquidation of
the Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of the State of
the State of Delaware;
(I) after any Event of Default (provided that
such Event of Default is not by or with respect to the
Property Trustee) the taking of any action incidental to the
foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement and
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protect and conserve the Trust Property for the benefit of the
Holders (without consideration of the effect of any such
action on any particular Holder); and
(J) to take all action that may be necessary for
the preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory
trust under the laws of the State of Delaware and of each
other jurisdiction in which such existence is necessary to
protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for
which the Trust was created.
(iii) The Property Trustee shall have the power and
authority to act on behalf of the Trust with respect to any of the
duties, liabilities, powers or the authority of the Administrators set
forth in Section 2.6(a)(i)(D), (E) and (F) herein but shall not have a
duty to do any such act unless specifically requested to do so in
writing by the Sponsor, and shall then be fully protected in acting
pursuant to such written request; and in the event of a conflict
between the action of the Administrators and the action of the Property
Trustee, the action of the Property Trustee shall prevail.
(b) So long as this Trust Agreement remains in effect, the Trust
(or the Property Trustee or Administrators acting on behalf of the Trust) shall
not undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, neither the Property
Trustee nor the Administrators may cause the Trust to (i) acquire any
investments or engage in any activities not authorized by this Trust Agreement,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or otherwise
dispose of any of the Trust Property or interests therein, including to Holders,
except as expressly provided herein, (iii) take any action that would reasonably
be expected (x) to cause the Trust to fail or cease to qualify as a "grantor
trust" for United States federal income tax purposes or (y) to require the trust
to register as an Investment Company under the Investment Company Act, (iv)
incur any indebtedness for borrowed money or issue any other debt or (v) take or
consent to any action that would result in the placement of a lien on any of the
Trust Property. The Property Trustee shall, at the sole cost and expense of the
Trust, defend all claims and demands of all Persons at any time claiming any
lien on any of the Trust Property adverse to the interest of the Trust or the
Holders in their capacity as Holders.
(c) In connection with the issuance and sale of the Preferred
Securities, the Sponsor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Sponsor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the taking of any action necessary to obtain an
exemption from the Securities Act;
(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part of the
Preferred Securities and the determination of any and all such acts,
other than actions which must be taken by or on behalf of the Trust,
and the advice to the Administrators of actions they must take on
behalf of the Trust, and the preparation for execution and filing of
any documents to be executed and filed by the
11
Trust or on behalf of the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States in connection with the sale of the Preferred Securities;
(iii) the negotiation of the terms of, and the execution
and delivery of, the Purchase Agreement providing for the sale of the
Preferred Securities; and
(iv) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrators and the Holders of a Majority in liquidation amount of the Common
Securities are authorized and directed to conduct the affairs of the Trust and
to operate the Trust so that the Trust will not (i) be deemed to be an
Investment Company required to be registered under the Investment Company Act,
and (ii) fail to be classified as a "grantor trust" for United States federal
income tax purposes. The Administrators and the Holders of a Majority in
liquidation amount of the Common Securities shall not take any action
inconsistent with the treatment of the Debentures as indebtedness of the
Debenture Issuer for United States federal income tax purposes. In this
connection, the Administrators and the Holders of a Majority in liquidation
amount of the Common Securities are authorized to take any action, not
inconsistent with applicable laws, the Certificate of Trust or this Trust
Agreement, as amended from time to time, that each of the Administrators and the
Holders of a Majority in liquidation amount of the Common Securities determines
in their discretion to be necessary or desirable for such purposes.
(e) Subject to the Fee Letter, all reasonable expenses incurred by
the Administrators or the Property Trustee pursuant to this Section 2.6 shall be
reimbursed by the Sponsor, and the Property Trustee and the Administrators shall
have no obligations with respect to such expenses.
(f) The assets of the Trust shall consist of the Trust Property.
(g) Legal title to all Trust Property shall be vested at all times
in the Property Trustee (in its capacity as such) and shall be held and
administered by the Property Trustee and the Administrators for the benefit of
the Trust in accordance with this Trust Agreement.
(h) If the Property Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Trust Agreement and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Property Trustee or to such Holder, then and in
every such case the Sponsor, the Property Trustee and the Holders shall, subject
to any determination in such proceeding, be restored severally and respectively
to their former positions hereunder, and thereafter all rights and remedies of
the Property Trustee and the Holders shall continue as though no such proceeding
had been instituted.
SECTION 2.7. PROHIBITION OF ACTIONS BY THE TRUST AND THE PROPERTY
TRUSTEE.
(a) The Trust shall not, and the Property Trustee shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Trust Agreement. In particular, the Trust shall not and the Property
Trustee shall cause the Trust not to:
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(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of the Securities pursuant to the terms of this Trust Agreement
and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust Property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever other than as expressly provided herein;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(vii) carry on any "trade or business" as that phrase is
used in the Code; or
(viii) other than as provided in this Trust Agreement
(including Annex I), (A) direct the time, method and place of
exercising any trust or power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past default that is waivable
under the Indenture, or (C) exercise any right to rescind or annul any
Trust Agreement that the principal of all the Debentures shall be due
and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall
be required unless the Trust shall have received a written opinion of
counsel to the effect that such modification will not cause the Trust
to cease to be classified as a "grantor trust" for United States
federal income tax purposes.
SECTION 2.8. POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Property Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Property Trustee to the Debentures shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with Section 4.3
and shall cease as to such predecessor Property Trustee. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrators.
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Account") in the name of and under
the exclusive control of the Property Trustee and the Paying Agent, and
maintained in the Property Trustee's trust department,
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on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures, deposit such funds
into the Property Account and make payments, or cause the Paying Agent
to make payments, to the Holders of the Preferred Securities and
Holders of the Common Securities from the Property Account in
accordance with Section 5.1. Funds in the Property Account shall be
held uninvested until disbursed in accordance with this Trust
Agreement;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature;
(iii) upon written notice of distribution issued by the
Administrators in accordance with the terms of the Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain circumstances pursuant to the terms of the
Securities; and
(iv) act as Calculation Agent until removed in accordance
with Section 2.10 of the Indenture.
(d) The Property Trustee may bring or defend, pay, collect,
compromise, arbitrate, resort to legal action with respect to, or otherwise
adjust claims or demands of or against, the Trust that arise out of or in
connection with an Event of Default of which a Responsible Officer of the
Property Trustee has actual knowledge or arises out of the Property Trustee's
duties and obligations under this Trust Agreement; provided, however, that if an
Event of Default has occurred and is continuing and such event is attributable
to the failure of the Debenture Issuer to pay interest or principal on the
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the Redemption Date or the Special Redemption Date,
as applicable), then a Holder of the Preferred Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder (a
"Direct Action") on or after the respective due dates specified in the
Debentures. In connection with such Direct Action, the rights of the Holders of
the Common Securities will be subrogated to the rights of such Holder of the
Preferred Securities to the extent of any payment made by the Debenture Issuer
to such Holder of the Preferred Securities in such Direct Action; provided,
however, that no Holder of the Common Securities may exercise such right of
subrogation so long as an Event of Default with respect to the Preferred
Securities has occurred and is continuing.
(e) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of the
Securities pursuant to the terms of the Securities and this Trust
Agreement; or
(ii) a Successor Property Trustee has been appointed and
has accepted that appointment in accordance with Section 4.3.
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(f) The Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a Holder of the Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee may, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to this
Trust Agreement (including Annex I).
(g) The Property Trustee must exercise the powers set forth in
this Section 2.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 2.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 2.3.
SECTION 2.9. CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY
TRUSTEE AND ADMINISTRATORS.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all such Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Trust Agreement and no implied covenants shall be read into
this Trust Agreement against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 6.7), the
Property Trustee shall exercise such of the rights and powers vested in it by
this Trust Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) The duties and responsibilities of the Property Trustee and
the Administrators shall be as provided by this Trust Agreement. Notwithstanding
the foregoing, no provision of this Trust Agreement shall require the Property
Trustee or Administrators to expend or risk their own funds or otherwise incur
any financial liability in the performance of any of their duties hereunder, or
in the exercise of any of their rights or powers if the Property Trustee or such
Administrator shall have reasonable grounds to believe that repayment of such
funds or adequate protection against such risk of liability is not reasonably
assured to the Property Trustee or such Administrator. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to the Property
Trustee or Administrators shall be subject to the provisions of this Article.
Nothing in this Trust Agreement shall be construed to relieve an Administrator
or the Property Trustee from liability for the Property Trustee's or such
Administrator's own negligent act, the Property Trustee's or such
Administrator's own negligent failure to act, or the Property Trustee's or such
Administrator's own willful misconduct. To the extent that, at law or in equity,
the Property Trustee or an Administrator has duties and liabilities relating to
the Trust or to the Holders, the Property Trustee or such Administrator shall
not be liable to the Trust or to any Holder for the Property Trustee's or such
Administrator's good faith reliance on the provisions of this Trust Agreement.
The provisions of this Trust Agreement, to the extent that they restrict the
duties and liabilities of the Administrators or the Property Trustee otherwise
existing at law or in equity, are agreed by the Sponsor and the Holders to
replace such other duties and liabilities of the Administrators or the Property
Trustee.
(c) All payments made by the Property Trustee or a Paying Agent in
respect of the Securities shall be made only from the revenue and proceeds from
the Trust Property and only to
15
the extent that there shall be sufficient revenue or proceeds from the Trust
Property to enable the Property Trustee or a Paying Agent to make payments in
accordance with the terms hereof. Each Holder, by its acceptance of a Security,
agrees that it will look solely to the revenue and proceeds from the Trust
Property to the extent legally available for distribution to it as herein
provided and that the Property Trustee and the Administrators are not personally
liable to it for any amount distributable in respect of any Security or for any
other liability in respect of any Security. This Section 2.9(c) does not limit
the liability of the Property Trustee expressly set forth elsewhere in this
Trust Agreement.
(d) The Property Trustee shall not be liable for its own acts or
omissions hereunder except as a result of its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred Securities or the
Common Securities, as applicable, relating to the time, method and
place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Debentures and
the Property Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its
fiduciary accounts generally, subject to the protections and
limitations on liability afforded to the Property Trustee under this
Trust Agreement;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor; and money held by the Property Trustee
need not be segregated from other funds held by it except in relation
to the Property Account maintained by the Property Trustee pursuant to
Section 2.8(c)(i) and except to the extent otherwise required by law;
and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with
their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for any default or misconduct of the
Administrators or the Sponsor.
SECTION 2.10. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the
provisions of Section 2.9:
(a) the Property Trustee may conclusively rely and shall fully be
protected in acting, or refraining from acting, in good faith upon any
resolution, opinion of counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
appraisal, bond,
16
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement,
the Property Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Trust Agreement, the
Property Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to any
matter as to which the Holders of Preferred Securities are entitled to vote
under the terms of this Trust Agreement, the Property Trustee may deliver a
notice to the Sponsor requesting the Sponsor's written instructions as to the
course of action to be taken and the Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be instructed in
writing, in which event the Property Trustee shall have no liability except for
its own negligence or willful misconduct;
(c) any direction or act of the Sponsor or the Administrators
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be proved or established
before undertaking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may request
and conclusively rely upon an Officers' Certificate as to factual matters which,
upon receipt of such request, shall be promptly delivered by the Sponsor or the
Administrators;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel of its selection
(which counsel may be counsel to the Sponsor or any of its Affiliates) and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon and in accordance with such advice; the Property
Trustee shall have the right at any time to seek instructions concerning the
administration of this Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; provided,
that nothing contained in this Section 2.10(g) shall be taken to relieve the
Property Trustee, subject to Section 2.9(b), upon the occurrence of an Event of
Default, to exercise such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs; provided, further, that nothing in this Section 2.10(g)
shall prevent the Property Trustee from exercising its rights under Section 4.3;
17
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless requested in writing to do so by one or more Holders, but
the Property Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys and the Property Trustee shall not be responsible for any
misconduct or negligence on the part of or for the supervision of, any such
agent or attorney appointed with due care by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request instructions from the Holders of the Preferred
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Preferred Securities as would be
entitled to direct the Property Trustee under the terms of the Preferred
Securities in respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;
(k) except as otherwise expressly provided in this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement;
(l) when the Property Trustee incurs expenses or renders services
in connection with a Bankruptcy Event, such expenses (including the fees and
expenses of its counsel) and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law or law relating
to creditors rights generally;
(m) the Property Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Property Trustee obtains
actual knowledge of such event or the Property Trustee receives written notice
of such event from any Holder, the Sponsor or the Debenture Trustee;
(n) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this Trust Agreement, both of
which shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action; and
(o) no provision of this Trust Agreement shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable
18
law, to perform any such act or acts, or to exercise any such right, power, duty
or obligation. No permissive power or authority available to the Property
Trustee shall be construed to be a duty.
SECTION 2.11. EXECUTION OF DOCUMENTS. Unless otherwise required by the
Statutory Trust Act, the Property Trustee, or any one or more of the
Administrators, as the case may be, is authorized to execute on behalf of the
Trust any documents that the Property Trustee or the Administrators, as the case
may be, have the power and authority to execute pursuant to Section 2.6.
SECTION 2.12. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Trust Agreement and the Securities shall be taken
as the statements of the Sponsor, and the Property Trustee does not assume any
responsibility for their correctness. The Property Trustee makes no
representations as to the value or condition of the property of the Trust or any
part thereof. The Property Trustee makes no representations as to the validity
or sufficiency of this Trust Agreement, the Debentures or the Securities.
SECTION 2.13. DURATION OF TRUST. The Trust, unless earlier dissolved
pursuant to the provisions of Article VII hereof, shall be in existence for 35
years from the Closing Date.
SECTION 2.14. MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 2.14(b) and (c) and except in connection with the
liquidation of the Trust and the distribution of the Debentures to Holders of
Securities pursuant to Section 7.1(a)(iv) of the Trust Agreement or Section 4 of
Annex I.
(b) The Trust may, with the consent of the Property Trustee and
without the consent of the Holders of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any state; provided that:
(i) if the Trust is not the surviving entity, such
successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so that the Successor Securities rank
the same as the Securities rank with respect to Distributions
and payments upon Liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the
Successor Entity that possesses substantially the same powers and
duties as the Property Trustee as the Holder of the Debentures;
19
(iii) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities) in any material respect;
(iv) the Property Trustee receives written confirmation
from a nationally recognized statistical rating organization that rates
securities issued by the initial purchaser of the Preferred Securities
that it will not reduce or withdraw the rating of any such securities
because of such merger, conversion, consolidation, amalgamation or
replacement;
(v) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect;
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a "grantor trust"
for United States federal income tax purposes;
(vii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Guarantee;
(viii) the Sponsor owns 100% of the common securities of any
Successor Entity; and
(ix) prior to such merger, consolidation, amalgamation or
replacement, the Property Trustee shall have received an Officers'
Certificate of the Administrators and an opinion of counsel, each to
the effect that all conditions precedent under this Section 2.14(b) to
such transaction have been satisfied.
(c) Notwithstanding Section 2.14(b), the Trust shall not, except
with the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
20
ARTICLE III
SPONSOR
SECTION 3.1. SPONSOR'S PURCHASE OF COMMON SECURITIES. On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the Trust
in an amount at least equal to 3% of the capital of the Trust, at the same time
as the Preferred Securities are sold.
SECTION 3.2. RESPONSIBILITIES OF THE SPONSOR. In connection with the
issue and sale of the Preferred Securities, the Sponsor shall have the exclusive
right and responsibility to engage in, or direct the Administrators to engage
in, the following activities:
(a) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States; and
(b) to negotiate the terms of and/or execute on behalf of the
Trust, the Purchase Agreement and other related agreements providing for the
sale of the Preferred Securities.
SECTION 3.3. EXPENSES. Subject to the Fee Letter, in connection with
the offering, sale and issuance of the Debentures to the Trust and in connection
with the sale of the Securities by the Trust, the Sponsor, in its capacity as
Debenture Issuer, shall:
(a) pay all reasonable costs and expenses relating to the
offering, sale and issuance of the Debentures, including compensation of the
Debenture Trustee under the Indenture in accordance with the provisions of the
Indenture;
(b) be responsible for and shall pay all debts and obligations
(other than with respect to the Securities) and all costs and expenses of the
Trust (including, but not limited to, costs and expenses relating to the
organization, maintenance and dissolution of the Trust) and the offering, sale
and issuance of the Securities, the reasonable fees and expenses (including
reasonable counsel fees and expenses) of the Property Trustee, the Delaware
Trustee and the Administrators and the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, Paying Agents,
Registrars, duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets and the enforcement by the Property
Trustee of the rights of the Holders; and
(c) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 3.3 shall be for the
benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may
21
enforce the Sponsor's obligations under this Section 3.3 directly against the
Sponsor and the Sponsor irrevocably waives any right or remedy to require that
any such Creditor take any action against the Trust or any other Person before
proceeding against the Sponsor. The Sponsor agrees to execute such additional
agreements as may be necessary or desirable in order to give full effect to the
provisions of this Section 3.3.
SECTION 3.4. RIGHT TO PROCEED. The Sponsor acknowledges the rights of
Holders to institute a Direct Action as set forth in Section 2.8(d) hereto.
ARTICLE IV
PROPERTY TRUSTEE, DELAWARE TRUSTEE AND ADMINISTRATORS
SECTION 4.1. PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) not offer or provide credit or credit enhancement to
the Trust; and
(iii) be a banking corporation or trust company organized
and doing business under the laws of the United States of America or
any state thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000.00), and
subject to supervision or examination by Federal, state, or District of
Columbia authority. If such corporation or trust company publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 4.1(a)(iii), the combined
capital and surplus of such corporation or trust company shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 4.1(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 4.3(a).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act of
1939, as amended, the Property Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to this Trust
Agreement.
(d) The initial Property Trustee shall be JPMorgan Chase Bank.
SECTION 4.1A DELAWARE TRUSTEE REQUIRED.
(a) If required by the Statutory Trust Act, there shall at all
times be a Delaware Trustee with respect to the Securities. The Delaware Trustee
shall either be (i) a natural person who is at least 21 years of age and a
resident of the State of Delaware or (ii) a legal entity that
22
has its principal place of business in the State of Delaware, otherwise meets
the requirements of applicable Delaware law and shall act through one or more
persons authorized to bind such entity. If at any time the Delaware Trustee
shall cease to be eligible in accordance with the provisions of this Section
4.1A, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article IV.
(b) The Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrators set forth
herein. The Delaware Trustee shall be one of the trustees of the Trust for the
sole and limited purpose of fulfilling the requirements of Section 3807 of the
Statutory Trust Act and for taking such actions as are required to be taken by a
Delaware trustee under the Statutory Trust Act. The duties (including fiduciary
duties), liabilities and obligations of the Delaware Trustee shall be limited to
(a) accepting legal process served on the Trust in the State of Delaware and (b)
the execution of any certificates required to be filed with the Secretary of
State of the State of Delaware that the Delaware Trustee is required to execute
under Section 3811 of the Statutory Trust Act and there shall be no other duties
(including fiduciary duties) or obligations, express or implied, at law or in
equity, of the Delaware Trustee. The Delaware Trustee shall have all rights,
privileges and immunities of the Property Trustee.
SECTION 4.2. ADMINISTRATORS. Each Administrator shall be a U.S. Person,
21 years of age or older and authorized to bind the Sponsor. The initial
Administrators shall be John Sokol, Si Sokol and Sally Cress. There shall at all
times be at least one Administrator. Except where a requirement for action by a
specific number of Administrators is expressly set forth in this Trust Agreement
and except with respect to any action the taking of which is the subject of a
meeting of the Administrators, any action required or permitted to be taken by
the Administrators may be taken by, and any power of the Administrators may be
exercised by, or with the consent of, any one such Administrator.
SECTION 4.3. APPOINTMENT, REMOVAL AND RESIGNATION OF PROPERTY TRUSTEE
AND ADMINISTRATORS.
(a) Notwithstanding anything to the contrary in this Trust
Agreement, no resignation or removal of the Property Trustee and no appointment
of a Successor Property Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the Successor Property Trustee in
accordance with the applicable requirements of this Section 4.3.
Subject to the immediately preceding paragraph, the Property Trustee
may resign at any time by giving written notice thereof to the Sponsor. Upon the
resignation of the Property Trustee, the Holders of the Common Securities shall
appoint a successor meeting the eligibility requirements (the "Successor
Property Trustee"). If the instrument of acceptance by the Successor Property
Trustee required by this Section 4.3 shall not have been delivered to the
Property Trustee within 60 days after the giving of such notice of resignation
or delivery of the instrument of removal, the Property Trustee may petition, at
the expense of the Trust, any Federal, state or District of Columbia court of
competent jurisdiction for the appointment of a Successor Property Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Property Trustee. The Property Trustee shall have no
liability for the selection of such successor pursuant to this Section 4.3.
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The Property Trustee may be removed by the act of the Holders of a
Majority in liquidation amount of the Preferred Securities, delivered to the
Property Trustee (in its individual capacity and on behalf of the Trust) if an
Event of Default shall have occurred and be continuing. If the Property Trustee
shall be so removed, the Holders of Preferred Securities, by act of the Holders
of a Majority in liquidation amount of the Preferred Securities then outstanding
delivered to the Property Trustee, shall promptly appoint a Successor Property
Trustee, and such Successor Property Trustee shall comply with the applicable
requirements of this Section 4.3. If no Successor Property Trustee shall have
been so appointed by the Holders of a Majority in liquidation amount of the
Preferred Securities and accepted appointment in the manner required by this
Section 4.3, within 30 days after delivery of an instrument of removal, any
Holder who has been a Holder of the Securities for at least 6 months may, on
behalf of himself and all others similarly situated, petition any Federal, state
or District of Columbia court of competent jurisdiction for the appointment of
the Successor Property Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Property Trustee.
The Property Trustee shall give notice of its resignation to the
Sponsor and the Successor Property Trustee shall give notice of a removal and
each appointment of a Successor Property Trustee to all Holders in the manner
provided in Section 13.1(d) and shall give notice to the Sponsor. Each notice
shall include the name of the Successor Property Trustee and the address of its
Corporate Trust Office.
(b) In case of the appointment hereunder of a Successor Property
Trustee, the retiring Property Trustee and the Successor Property Trustee shall
execute and deliver an amendment hereto wherein the Successor Property Trustee
shall accept such appointment and which (i) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in, the
Successor Property Trustee all the rights, powers, trusts and duties of the
retiring Property Trustee with respect to the Securities and the Trust and (ii)
shall add to or change any of the provisions of this Trust Agreement as shall be
necessary to provide for or facilitate the administration of the Trust by more
than one Property Trustee, it being understood that nothing herein or in such
amendment shall constitute such Property Trustees co-trustees and upon the
execution and delivery of such amendment the resignation or removal of the
retiring Property Trustee shall become effective to the extent provided therein
and each Successor Property Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Property Trustee; but, on request of the Trust or any Successor
Property Trustee such retiring Property Trustee shall duly assign, transfer and
deliver to such Successor Property Trustee all Trust Property, all proceeds
thereof and money held by such retiring Property Trustee hereunder with respect
to the Securities and the Trust.
(c) No Property Trustee shall be liable for the acts or omissions
to act of any Successor Property Trustee.
(d) The Holders of the Preferred Securities will have no right to
vote to appoint, remove or replace the Administrators, which voting rights are
hereby vested exclusively in the Holder of the Common Securities.
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SECTION 4.4. PROPERTY TRUSTEE VACANCIES. If the Property Trustee ceases
to hold office for any reason a vacancy shall occur. A resolution certifying the
existence of such vacancy by the Property Trustee, the Delaware Trustee or any
Administrator shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a trustee appointed in accordance with Section 4.3.
SECTION 4.5. EFFECT OF VACANCIES. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of the Property Trustee, the Delaware Trustee or any
Administrator shall not operate to dissolve, terminate or annul the Trust or
terminate this Trust Agreement.
SECTION 4.6. MEETINGS OF THE PROPERTY TRUSTEE AND THE ADMINISTRATORS.
Meetings of the Administrators shall be held from time to time upon the call of
an Administrator. Regular meetings of the Administrators may be held in person
in the United States or by telephone, at a place (if applicable) and time fixed
by resolution of the Administrators. Notice of any in-person meetings of the
Property Trustee with the Administrators or meetings of the Administrators shall
be hand delivered or otherwise delivered in writing (including by facsimile,
with a hard copy by overnight courier) not less than 48 hours before such
meeting. Notice of any telephonic meetings of the Property Trustee with the
Administrators or meetings of the Administrators or any committee thereof shall
be hand delivered or otherwise delivered in writing (including by facsimile,
with a hard copy by overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of the
Property Trustee or an Administrator, as the case may be, at a meeting shall
constitute a waiver of notice of such meeting except where the Property Trustee
or an Administrator, as the case may be, attends a meeting for the express
purpose of objecting to the transaction of any activity on the grounds that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Trust Agreement, any action of the Property Trustee or the Administrators,
as the case may be, may be taken at a meeting by vote of the Property Trustee or
a majority vote of the Administrators present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Property Trustee or the Administrators. Meetings of the Property Trustee and the
Administrators together shall be held from time to time upon the call of the
Property Trustee or an Administrator.
SECTION 4.7. DELEGATION OF POWER.
(a) Any Administrator may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 that is
a U.S. Person his or her power for the purpose of executing any documents
contemplated in Section 2.6; and
(b) the Administrators shall have power to delegate from time to
time to such of their number the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrators
or otherwise as the Administrators may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
the Trust, as set forth herein.
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SECTION 4.8. CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
Person into which the Property Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Property Trustee shall be the successor of the Property Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
SECTION 4.9. DELAWARE TRUSTEE. The provisions of this Article IV
governing the appointment, removal and resignation and vacancies of the Property
Trustee shall apply to the Delaware Trustee, so long as one is required. Upon
the appointment of a successor Delaware Trustee, such successor shall file a
certificate of amendment to the certificate of trust in accordance with Section
3810 of the Statutory Trust Act.
ARTICLE V
DISTRIBUTIONS
SECTION 5.1. DISTRIBUTIONS. Holders shall receive Distributions in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Preferred Securities and the Common
Securities in accordance with the preferences set forth in their respective
terms. If and to the extent that the Debenture Issuer makes a payment of
Interest or any principal on the Debentures held by the Property Trustee, the
Paying Agent shall and is directed, to the extent funds are available for that
purpose, to make a distribution (a "Distribution") of such amounts to Holders.
ARTICLE VI
ISSUANCE OF SECURITIES
SECTION 6.1. GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Administrators shall, on behalf of the Trust, issue one
series of preferred securities substantially in the form of Exhibit A-1
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I and one series of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I. The Trust shall issue no securities or
other interests in the assets of the Trust other than the Preferred Securities
and the Common Securities. The Preferred Securities rank pari passu to, and
payment thereon shall be made Pro Rata with, the Common Securities except that,
where an Event of Default has occurred and is continuing, the rights of Holders
of the Common Securities to payment in respect of Distributions and payments
upon liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Preferred Securities as set forth in Annex I.
(b) The Certificates shall be signed on behalf of the Trust by one
or more Administrators. Such signature shall be the facsimile or manual
signature of any Administrator. In case any Administrator of the Trust who shall
have signed any of the Securities shall cease to
26
be such Administrator before the Certificates so signed shall be delivered by
the Trust, such Certificates nevertheless may be delivered as though the person
who signed such Certificates had not ceased to be such Administrator, and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be an Administrator of the
Trust, although at the date of the execution and delivery of the Trust Agreement
any such person was not such an Administrator. A Preferred Security Certificate
shall not be valid until authenticated by the facsimile or manual signature of
an authorized signatory of the Property Trustee. Such signature shall be
conclusive evidence that the Preferred Security Certificate has been
authenticated under this Trust Agreement. Upon written order of the Trust signed
by at least one Administrator, the Property Trustee shall authenticate the
Preferred Securities Certificate for original issue. The Property Trustee may
appoint an authenticating agent that is a U.S. Person acceptable to the Trust to
authenticate the Preferred Securities Certificate. A Common Security Certificate
need not be so authenticated.
(c) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Trust
Agreement, the Securities so issued shall be deemed to be validly issued, fully
paid and non-assessable.
(e) Every Person, by virtue of having become a Holder in
accordance with the terms of this Trust Agreement, shall be deemed to have
expressly assented and agreed to the terms of, and shall be bound by, this Trust
Agreement and the Guarantee.
SECTION 6.2. REGISTRAR AND PAYING AGENT.
(a) The Property Trustee shall keep or cause to be kept, at the
Corporate Trust Office, a register or registers (the "Register") in which the
registrar and transfer agent with respect to the Trust Securities (the
"Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Person acting as the Property
Trustee shall at all times also be the Registrar. The provisions of Article IX
shall apply to the Property Trustee in its role as Registrar.
(b) Subject to Section 6.2(d), upon surrender for registration of
transfer of any Preferred Securities Certificate at the office or agency
maintained pursuant to Section 6.2(f), the Administrators or any one of them
shall execute by manual or facsimile signature and deliver to the Property
Trustee, and the Property Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
as may be required by this Trust Agreement dated the date of execution by such
Administrator or Trustee. At the option of a Holder, Preferred Securities
Certificates may be exchanged for other Preferred Securities Certificates in
authorized denominations and of a like aggregate Liquidation Amount upon
surrender of the Preferred Securities Certificate to be exchanged at the office
or agency maintained pursuant to Section 6.2(f). Whenever any Preferred
Securities Certificates are so surrendered for exchange, the Administrators or
any one of them shall execute by manual or facsimile signature and deliver to
the Property Trustee, and the Property Trustee shall
27
authenticate and deliver, the Preferred Securities Certificates that the Holder
making the exchange is entitled to receive.
(c) The Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Preferred Security during a period beginning at
the opening of business fifteen (15) days before the day of selection for
redemption of such Preferred Securities pursuant to Annex I and ending at the
close of business on the day of mailing of the notice of redemption or (ii) to
register the transfer of or exchange any Preferred Security so selected for
redemption in whole or in part, except, in the case of any such Preferred
Security to be redeemed in part, any portion thereof not to be redeemed.
(d) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by the Holder or such Holder's attorney duly authorized
in writing and (i) if such Preferred Securities Certificate is being transferred
to a QIB, accompanied by a certificate of the transferor substantially in the
form set forth as Exhibit E hereto or (ii) if such Preferred Securities
Certificate is being transferred otherwise than to a QIB, accompanied by a
certificate of the transferee substantially in the form set forth as Exhibit F
hereto.
(e) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the Property
Trustee on behalf of the Trust may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Preferred Securities Certificates.
(f) The Administrators shall designate an office or offices or
agency or agencies where Preferred Securities Certificates may be surrendered
for registration of transfer or exchange. The Administrators initially designate
the Corporate Trust Office of the Property Trustee as its office and agency for
such purposes. The Administrators shall give prompt written notice to the
Property Trustee and to the Holders of any change in the location of any such
office or agency.
(g) The Paying Agent shall initially be the Property Trustee. The
Paying Agent shall make Distributions to Holders from the Property Account and
shall report the amounts of such Distributions to the Property Trustee and the
Administrators. Any Paying Agent shall have the revocable power to withdraw
funds from the Property Account solely for the purpose of making the
Distributions referred to above. The Administrators may revoke such power and
remove the Paying Agent in their sole discretion. Any Person acting as Paying
Agent shall be permitted to resign as Paying Agent upon thirty (30) days'
written notice to the Administrators and the Property Trustee. If the Property
Trustee shall no longer be the Paying Agent or a successor Paying Agent shall
resign or its authority to act be revoked, the Administrators shall appoint a
successor (which shall be a bank or trust company) to act as Paying Agent. Such
successor Paying Agent appointed by the Administrators shall execute and deliver
to the Trustees an instrument in which such successor Paying Agent shall agree
with the Trustees that as Paying Agent, such successor Paying Agent will hold
all sums, if any, held by it for payment to the Holders in trust for the benefit
of the Holders entitled thereto until such sums shall be paid to such Holders.
The Paying Agent shall return all unclaimed funds to the Property Trustee and
28
upon removal of a Paying Agent such Paying Agent shall also return all funds in
its possession to the Property Trustee. The provisions of Article IX shall apply
to the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other Paying Agent appointed hereunder. Any reference in this Trust Agreement to
the Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 6.3. FORM AND DATING. The Preferred Securities Certificates and
the Property Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit A-1, and the Common Securities Certificates
shall be substantially in the form of Exhibit A-2, each of which is hereby
incorporated in and expressly made a part of this Trust Agreement. Certificates
may be typed, printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Administrators, as conclusively
evidenced by one or more of their execution thereof. The Securities may have
letters, numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange rule, agreements to
which the Trust is subject if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Sponsor). The Trust at the
direction of the Sponsor shall furnish any such legend not contained in Exhibit
A-1 to the Property Trustee in writing. Each Preferred Security Certificate
shall be dated on or before the date of its authentication. The terms and
provisions of the Securities set forth in Annex I and the forms of Securities
set forth in Exhibits A-1 and A-2 are part of the terms of this Trust Agreement
and to the extent applicable, the Property Trustee, the Administrators and the
Sponsor, by their execution and delivery of this Trust Agreement, expressly
agree to such terms and provisions and to be bound thereby. Preferred Securities
will be issued only in blocks having a stated liquidation amount of not less
than $100,000.00 and any multiple of $1,000.00 in excess thereof.
The Preferred Securities are being offered and sold by the Trust
pursuant to the Purchase Agreement in definitive, registered form without
coupons and with the Restricted Securities Legend.
SECTION 6.4. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the
Registrar, or if the Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Property Trustee such security
or indemnity as may be required by it to keep the Registrar, the Administrators
and the Property Trustee harmless;
then, in the absence of notice that such Certificate shall have been acquired by
a protected purchaser, an Administrator on behalf of the Trust shall execute
(and in the case of a Preferred Security Certificate, the Property Trustee shall
authenticate) and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 6.4,
the Registrar or the Administrators may require the payment of a sum sufficient
to cover any tax or
29
other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 6.5. TEMPORARY SECURITIES. Until definitive Securities are
ready for delivery, the Administrators may prepare and, in the case of the
Preferred Securities, the Property Trustee shall authenticate, temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Administrators consider
appropriate for temporary Securities. Without unreasonable delay, the
Administrators shall prepare and, in the case of the Preferred Securities, the
Property Trustee shall authenticate, definitive Securities in exchange for
temporary Securities.
SECTION 6.6. CANCELLATION. The Administrators at any time may deliver
Securities to the Property Trustee for cancellation. The Registrar shall forward
to the Property Trustee any Securities surrendered to it for registration of
transfer, redemption or payment. The Property Trustee shall promptly cancel all
Securities surrendered for registration of transfer, payment, replacement or
cancellation and shall retain such canceled Securities in accordance with its
customary practices. The Administrators may not issue new Securities to replace
Securities that have been paid or that have been delivered to the Property
Trustee for cancellation.
SECTION 6.7. RIGHTS OF HOLDERS; WAIVERS OF PAST DEFAULTS.
(a) The legal title to the Trust Property is vested exclusively in
the Property Trustee (in its capacity as such) in accordance with Section 2.5,
and the Holders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Trust except as described below. The
Securities shall be personal property giving only the rights specifically set
forth therein and in this Trust Agreement. The Securities and the Holders
thereof shall have no preemptive or similar rights.
(b) For so long as any Preferred Securities remain outstanding, if
upon an Indenture Event of Default, the Debenture Trustee fails or the holders
of not less than 25% in principal amount of the outstanding Debentures fail to
declare the principal of all of the Debentures to be immediately due and
payable, the Holders of a Majority in liquidation amount of the Preferred
Securities then outstanding shall have the right to make such declaration by a
notice in writing to the Property Trustee, the Sponsor and the Debenture
Trustee.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Property Trustee fails to annul any such Trust Agreement and
waive such default, the Holders of a Majority in liquidation amount of the
Preferred Securities, by written notice to the Property Trustee, the Sponsor and
the Debenture Trustee, may rescind and annul such Trust Agreement and its
consequences if:
(i) the Debenture Issuer has paid or deposited with the
Debenture Trustee a sum sufficient to pay
30
(A) all overdue installments of interest on all
of the Debentures,
(B) any accrued Additional Interest on all of
the Debentures,
(C) the principal of (and premium, if any, on)
any Debentures that have become due otherwise than by such
declaration of acceleration and interest and Additional
Interest thereon at the rate borne by the Debentures, and
(D) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee
and the Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures,
other than the nonpayment of the principal of the Debentures that has
become due solely by such acceleration, have been cured or waived as
provided in Section 5.7 of the Indenture.
The Holders of at least a Majority in liquidation amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default, except a default or
Event of Default in the payment of principal or interest (unless such default or
Event of Default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default or Event of Default in
respect of a covenant or provision that under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Preferred Securities, a record date shall be established for determining
Holders of outstanding Preferred Securities entitled to join in such notice,
which record date shall be at the close of business on the day the Property
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 6.7.
(c) Except as otherwise provided in paragraphs (a) and (b) of this
Section 6.7, the Holders of at least a Majority in liquidation amount of the
Preferred Securities may, on behalf of the Holders of all the Preferred
Securities, waive any past default or Event of Default and its
31
consequences. Upon such waiver, any such default or Event of Default shall cease
to exist, and any default or Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Trust Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 7.1. DISSOLUTION AND TERMINATION OF TRUST.
(a) The Trust shall dissolve on the first to occur of:
(i) unless earlier dissolved, on September 30, 2038, the
expiration of the term of the Trust;
(ii) upon a Bankruptcy Event with respect to the Sponsor,
the Trust or the Debenture Issuer;
(iii) (other than in connection with a merger,
consolidation or similar transaction not prohibited by the Indenture,
this Trust Agreement or the Guarantee, as the case may be) upon the
filing of a certificate of dissolution or its equivalent with respect
to the Sponsor, upon the consent of Holders of a Majority in
liquidation amount of the Securities voting together as a single class
to file a certificate of cancellation with respect to the Trust or upon
the revocation of the charter of the Sponsor and the expiration of 90
days after the date of revocation without a reinstatement thereof;
(iv) upon exercise of the right of the Holder of all of
the outstanding Common Securities to dissolve the Trust as provided in
Annex I hereto;
(v) upon the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Sponsor, the Trust or the
Debenture Issuer;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities; or
(vii) before the issuance of any Securities, with the
consent of the Property Trustee and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 7.1(a), and after satisfaction of liabilities to
creditors of the Trust as required by applicable law, including of the Statutory
Trust Act, and subject to the terms set forth in Annex I, the Delaware Trustee
shall, upon receipt of direction from the Administrators, terminate the Trust by
filing a certificate of cancellation with the Secretary of the State of the
State of Delaware and shall notify the Property Trustee in writing of such
filing as soon as such filing has been made.
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(c) The provisions of Section 2.9 and Article IX shall survive the
termination of the Trust.
ARTICLE VIII
TRANSFER OF INTERESTS
SECTION 8.1. GENERAL.
(a) Subject to Section 8.1(c), where Preferred Securities are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal number of Preferred Securities
represented by different certificates, the Registrar shall register the transfer
or make the exchange if its requirements for such transactions are met. To
permit registrations of transfer and exchanges, the Trust shall issue and the
Property Trustee shall authenticate Preferred Securities Certificates at the
Registrar's request.
(b) Upon issuance of the Common Securities, the Sponsor shall
acquire and retain beneficial and record ownership of the Common Securities and
for so long as the Securities remain outstanding, the Sponsor shall maintain
100% ownership of the Common Securities; provided, however, that any permitted
successor of the Sponsor, in its capacity as Debenture Issuer, under the
Indenture that is a U.S. Person may succeed to the Sponsor's ownership of the
Common Securities.
(c) Preferred Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Trust
Agreement and in the terms of the Securities. To the fullest extent permitted by
applicable law, any transfer or purported transfer of any Security not made in
accordance with this Trust Agreement shall be null and void and will be deemed
to be of no legal effect whatsoever and any such transferee shall be deemed not
to be the holder of such Preferred Securities for any purpose, including but not
limited to the receipt of Distributions on such Preferred Securities, and such
transferee shall be deemed to have no interest whatsoever in such Preferred
Securities.
(d) The Registrar shall provide for the registration of Securities
and of transfers of Securities, which will be effected without charge but only
upon payment (with such indemnity as the Registrar may require) in respect of
any tax or other governmental charges that may be imposed in relation to it.
Upon surrender for registration of transfer of any Securities, the Registrar
shall cause one or more new Securities of the same tenor to be issued in the
name of the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Property Trustee pursuant to
Section 6.6. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Trust Agreement.
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(e) The Trust shall not be required (i) to issue, register the
transfer of, or exchange any Securities during a period beginning at the opening
of business 15 days before the day of any selection of Securities for redemption
and ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all Holders of the
Securities to be redeemed, or (ii) to register the transfer or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 8.2. TRANSFER PROCEDURES AND RESTRICTIONS.
(a) The Preferred Securities shall bear the Restricted Securities
Legend, which shall not be removed unless there is delivered to the Property
Trustee and the Sponsor such satisfactory evidence, which may include an opinion
of counsel, as may be reasonably required to ensure that neither the legend nor
the restrictions on transfer set forth therein are required to comply with the
provisions of the Securities Act. Upon provision of such satisfactory evidence,
the Administrators shall execute and deliver to the Property Trustee and the
Property Trustee shall authenticate and deliver, at the written direction of the
Administrators, Preferred Securities that do not bear the legend.
(b) Except as permitted by Section 8.2(a), each Preferred Security
shall bear a legend (the "Restricted Securities Legend") in substantially the
following form and a Preferred Security shall not be transferred except in
compliance with such legend, unless otherwise determined by the Sponsor, upon
the advice of counsel expert in securities law, in accordance with applicable
law:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS
OR ANY OTHER APPLICABLE SECURITIES LAW. 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
AND ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER OF THIS SECURITY
BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS SECURITY ONLY (A) TO THE SPONSOR OR THE TRUST, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (D) TO A
NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903
OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
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THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS PREFERRED SECURITY FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT,
OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE SPONSOR'S AND THE
TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR
OR THE TRUST. HEDGING TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF 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 THE SECURITIES OR ANY INTEREST THEREIN, UNLESS
SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR 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 IS NOT PROHIBITED BY SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE
OR HOLDING. ANY PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST
THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING
THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT 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.
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THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 AND
MULTIPLES OF $1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN
$100,000.00 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH
THE FOREGOING RESTRICTIONS.
(c) To permit registrations of transfers and exchanges, the
Administrators shall execute and the Property Trustee shall authenticate
Preferred Securities at the Registrar's request.
(d) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Registrar or
the Sponsor may require) in respect of any tax or other governmental charge that
may be imposed in relation to it.
(e) All Preferred Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Trust Agreement shall
evidence the same security and shall be entitled to the same benefits under this
Trust Agreement as the Preferred Securities surrendered upon such registration
of transfer or exchange.
SECTION 8.3. DEEMED SECURITY HOLDERS. The Trust, the Administrators,
the Property Trustee, the Paying Agent, or the Registrar may treat the Person in
whose name any Certificate shall be registered on the books and records of the
Trust as the sole holder of such Certificate and of the Securities represented
by such Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the Securities
represented by such Certificate on the part of any Person, whether or not the
Trust, the Administrators, the Property Trustee, the Paying Agent, or the
Registrar shall have actual or other notice thereof.
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, PROPERTY TRUSTEE OR OTHERS
SECTION 9.1. LIABILITY.
(a) Except as expressly set forth in this Trust Agreement, the
Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of the
Securities any deficit upon dissolution of the Trust or otherwise.
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(b) Pursuant to the Statutory Trust Act, the Holders of the
Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 9.2. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Trust Agreement or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and, if selected by such Indemnified Person,
has been selected by such Indemnified Person with reasonable care by or on
behalf of the Trust, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 9.3. FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in equity,
are agreed by the parties hereto to replace such other duties and liabilities of
the Indemnified Person.
(b) Whenever in this Trust Agreement an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Trust Agreement or by applicable law.
SECTION 9.4. INDEMNITY.
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(a) The Sponsor agrees to the fullest extent permitted by
applicable law, to indemnify and hold harmless each Indemnified Person from and
against any loss, damage, liability, tax (other than income, franchise or other
taxes imposed on amounts paid pursuant to Section 3.3 or 9.6 hereof), penalty,
expense or claim of any kind or nature whatsoever incurred without negligence
(or, in the case of the Delaware Trustee, gross negligence), bad faith or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of the Trust hereunder, including the advancement
of funds to cover the cost and expenses of defending itself against any claims
or liability in connection with the exercise or performance of any of its powers
or its duties hereunder; provided, however, that the Sponsor shall have no such
obligation to make any such advancement unless it receives an undertaking, by or
on behalf of such Indemnified Person, to repay such amount if it is determined
that such Indemnified Person is not entitled to be indemnified pursuant to this
Section 9.4.
(b) The Trust shall have no payment, reimbursement or indemnity
obligations to any Indemnified Person under this Section 9.4 or Section 3.3 or
9.6 hereof. The provisions of this Section 9.4 shall survive the termination of
this Trust Agreement and the earlier removal or resignation of any Trustee.
(c) No Indemnified Person may claim any Lien on any Trust Property
whether before or after termination of the Trust as a result of any amount due
pursuant to this Section 9.4.
(d) In no event shall the Property Trustee and the Delaware
Trustee be liable for any failure or delay in the performance of its obligations
hereunder because of circumstances beyond its reasonable control, including, but
not limited to, acts of God, flood, war (whether declared or undeclared),
terrorism, fire, riot, embargo, government action, including any laws,
ordinances, regulations, governmental action or the like which delay, restrict
or prohibit the providing of the services contemplated by this Trust Agreement.
(e) The Sponsor or the Trust may purchase and maintain insurance
on behalf of any Person who is or was an Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor would have the
power to indemnify him against such liability under the provisions of this
Section 9.4.
(f) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 9.4 shall, unless otherwise provided when
authorized or ratified, (i) continue as to a Person who has ceased to be an
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a Person; and (ii) survive the termination or expiration
of this Trust Agreement or the earlier removal or resignation of an Indemnified
Person.
SECTION 9.5. OUTSIDE BUSINESSES. Any Covered Person, the Sponsor, the
Delaware Trustee and the Property Trustee (subject to Section 4.1(c)) may engage
in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Securities shall have no rights
by virtue of this Trust Agreement in and to such independent ventures or the
income or profits derived therefrom, and the pursuit of any such venture, even
if competitive with the
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business of the Trust, shall not be deemed wrongful or improper. None of any
Covered Person, the Sponsor, the Delaware Trustee or the Property Trustee shall
be obligated to present any particular investment or other opportunity to the
Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the
Delaware Trustee and the Property Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered Person,
the Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
SECTION 9.6. COMPENSATION; FEE. Subject to the Fee Letter, the Sponsor
agrees:
(a) to pay to the Property Trustee and the Delaware Trustee from
time to time such compensation for all services rendered by it hereunder as the
parties shall agree from time to time (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust); and
(b) except as otherwise expressly provided herein, to reimburse
the Property Trustee and the Delaware Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Property Trustee or
the Delaware Trustee in accordance with any provision of this Trust Agreement
(including the reasonable compensation and the expenses and disbursements of
their respective agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence (or, in the case of the
Delaware Trustee, its gross negligence), bad faith or willful misconduct.
The provisions of this Section 9.6 shall survive the dissolution of the
Trust and the termination of this Trust Agreement and the removal or resignation
of the Property Trustee and the Delaware Trustee.
No Trustee may claim any lien or charge on any property of the Trust as
a result of any amount due pursuant to this Section 9.6.
ARTICLE X
ACCOUNTING
SECTION 10.1. FISCAL YEAR. The fiscal year ("Fiscal Year") of the Trust
shall be the calendar year, or such other year as is required by the Code.
SECTION 10.2. CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the
Administrators shall keep, or cause to be kept at the principal office of the
Trust in the United States, as defined for purposes of Treasury Regulations
section 301.7701-7, full books of account, records and supporting documents,
which shall reflect in reasonable detail each transaction of the Trust. The
books of account shall be maintained, at the Sponsor's expense, in accordance
with generally accepted accounting principles, consistently applied. The books
of account and the records of the Trust
39
shall be examined by and reported upon (either separately or as part of the
Sponsor's regularly prepared consolidated financial report) as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrators.
(b) The Administrators shall cause to be duly prepared and
delivered to each of the Holders of Securities Form 1099 or such other annual
United States federal income tax information statement required by the Code,
containing such information with regard to the Securities held by each Holder as
is required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrators
shall endeavor to deliver all such statements within 30 days after the end of
each Fiscal Year of the Trust.
(c) The Administrators, at the Sponsor's expense, shall cause to
be duly prepared at the principal office of the Trust in the United States, as
defined for purposes of Treasury Regulations section 301.7701-7, and filed an
annual United States federal income tax return on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income
tax returns required to be filed by the Administrators on behalf of the Trust
with any state or local taxing authority.
SECTION 10.3. BANKING. The Trust shall maintain in the United States,
as defined for purposes of Treasury Regulations section 301.7701-7, one or more
bank accounts in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Property Trustee shall be made directly to the Property Account and no other
funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Property Trustee.
SECTION 10.4. WITHHOLDING. The Property Trustee or any Paying Agent and
the Administrators shall comply with all withholding requirements under United
States federal, state and local law. The Property Trustee or any Paying Agent
shall request, and each Holder shall provide to the Property Trustee or any
Paying Agent, such forms or certificates as are necessary to establish an
exemption from withholding with respect to the Holder, and any representations
and forms as shall reasonably be requested by the Property Trustee or any Paying
Agent to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Administrators shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Property Trustee or any
Paying Agent is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution in the amount of the withholding to the
Holder. In the event of any claimed overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Property Trustee
or any Paying Agent may reduce subsequent Distributions by the amount of such
withholding.
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ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1. AMENDMENTS.
(a) Except as otherwise provided in this Trust Agreement or by any
applicable terms of the Securities, this Trust Agreement may only be amended by
a written instrument approved and executed by the Property Trustee.
(b) Notwithstanding any other provision of this Article XI, an
amendment may be made, and any such purported amendment shall be valid and
effective only if:
(i) the Property Trustee shall have first received
(A) an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Trust Agreement (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such amendment is permitted by,
and conforms to, the terms of this Trust Agreement (including
the terms of the Securities); and
(ii) the result of such amendment would not be to
(A) cause the Trust to cease to be classified
for purposes of United States federal income taxation as a
grantor trust; or
(B) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act.
(c) Except as provided in Sections 4.3(b), 11.1(d), (e) or (h), no
amendment shall be made, and any such purported amendment shall be void and
ineffective unless the Holders of a Majority in liquidation amount of the
Preferred Securities shall have consented to such amendment.
(d) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder, this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date or change any conversion or exchange provisions or (ii) restrict the right
of a Holder to institute suit for the enforcement of any such payment on or
after such date.
(e) Section 8.1(b) and 8.1(c) and this Section 11.1 shall not be
amended without the consent of all of the Holders of the Securities.
(f) Article III shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
41
(g) The rights of the Holders of the Preferred Securities under
Article IV to appoint and remove the Property Trustee shall not be amended
without the consent of the Holders of a Majority in liquidation amount of the
Preferred Securities.
(h) Subject to Sections 11.1(b)-(g), this Trust Agreement may be
amended by the Property Trustee and the Holders of a Majority in liquidation
amount of the Common Securities without the consent of the Holders of the
Preferred Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Trust
Agreement that may be defective or inconsistent with any other
provision of this Trust Agreement;
(iii) add to the covenants, restrictions or obligations of
the Sponsor; or
(iv) modify, eliminate or add to any provision of this
Trust Agreement to such extent as may be necessary to ensure that the
Trust will be classified for United States federal income tax purposes
at all times as a grantor trust and will not be required to register as
an "investment company" under the Investment Company Act (including
without limitation to conform to any change in Rule 3a-5, Rule 3a-7 or
any other applicable rule under the Investment Company Act or written
change in interpretation or application thereof by any legislative
body, court, government agency or regulatory authority) which amendment
does not have a material adverse effect on the rights, preferences or
privileges of the Holders of Securities;
provided, however, that no such modification, elimination or addition
referred to in clauses (i), (ii) or (iii) shall adversely affect in any material
respect the powers, preferences or special rights of Holders of Preferred
Securities.
(i) No amendment or modification to this Trust Agreement that
affects the rights, duties, liabilities or indemnities of the Delaware Trustee
hereunder shall be permitted without the prior written consent of the Delaware
Trustee.
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SECTION 11.2. MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrators (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Trust Agreement or the
terms of the Securities. The Administrators shall call a meeting of the Holders
of such class if directed to do so by the Holders of at least 25% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Administrators one or more calls in a writing stating that the signing
Holders of the Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of the
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of the Securities exercising the right to call a meeting and only
those Securities represented by such Certificates shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of the
Securities:
(i) notice of any such meeting shall be given to all the
Holders of the Securities having a right to vote thereat at least 7
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of the Securities
is permitted or required under this Trust Agreement, such vote, consent
or approval may be given at a meeting of the Holders of the Securities.
Any action that may be taken at a meeting of the Holders of the
Securities may be taken without a meeting and without prior notice if a
consent in writing setting forth the action so taken is signed by the
Holders of the Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary to authorize
or take such action at a meeting at which all Holders of the Securities
having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the Holders
of the Securities entitled to vote who have not consented in writing.
The Administrators may specify that any written ballot submitted to the
Holders of the Securities for the purpose of taking any action without
a meeting shall be returned to the Trust within the time specified by
the Administrators;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of the Securities executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
of the Securities were stockholders of a Delaware corporation; each
meeting of the Holders of the Securities shall be conducted by the
Administrators or by such other Person that the Administrators may
designate; and
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(iii) unless the Statutory Trust Act, this Trust Agreement,
or the terms of the Securities otherwise provides, the Administrators,
in their sole discretion, shall establish all other provisions relating
to meetings of Holders of Securities, including notice of the time,
place or purpose of any meeting at which any matter is to be voted on
by any Holders of the Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote; provided, however,
that each meeting shall be conducted in the United States (as that term
is defined in Treasury Regulations section 301.7701-7).
ARTICLE XII
REPRESENTATIONS OF PROPERTY TRUSTEE
SECTION 12.1. REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE. The
initial Property Trustee represents and warrants to the Trust and to the Sponsor
at the date of this Trust Agreement, and each Successor Property Trustee
represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as Property Trustee,
that:
(a) the Property Trustee is a New York banking corporation with
trust powers, duly organized and validly existing under the laws of the State of
New York with trust power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Trust Agreement;
(b) the execution, delivery and performance by the Property
Trustee of this Trust Agreement have been duly authorized by all necessary
corporate action on the part of the Property Trustee. This Trust Agreement has
been duly executed and delivered by the Property Trustee, and it constitutes a
legal, valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of this Trust
Agreement by the Property Trustee do not conflict with or constitute a breach of
the charter or by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this Trust
Agreement.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. NOTICES. All notices provided for in this Trust Agreement
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied (which
44
telecopy shall be followed by notice delivered or mailed by first class mail) or
mailed by first class mail, as follows:
(a) if given to the Trust in care of the Administrators at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
BIC Statutory Trust II
c/o Bancinsurance Corporation
250 East Broad Street, 10th Floor
Columbus, Ohio 43215
Attention: John S. Sokol
Telecopy: 614-228-5552
with a copy to the Property Trustee
(b) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities):
JPMorgan Chase Bank
600 Travis, Suite 1150
Houston, Texas 77002
Attention: Institutional Trust Services
Telecopy: 713-577-5200
(c) if given to the Delaware Trustee, at the Delaware Trustee's
mailing address set forth below (or such other address as the Delaware Trustee
may give notice of to the Holders of the Securities):
Chase Manhattan Bank USA, National Association
c/o JPMorgan Chase Bank
500 Stanton Christiana Road
Building 4 (3rd Floor)
Newark, Delaware 19713
Attention: Corporate Trust Administration
Telecopy No.: 302-552-6280
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Bancinsurance Corporation
250 East Broad Street, 10th Floor
Columbus, Ohio 43215
Attention: John S. Sokol
Telecopy: 614-228-5552
45
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 13.2. GOVERNING LAW. This Trust Agreement and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
law of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to the principles of conflict of laws of the State of
Delaware or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Delaware; provided, however,
that there shall not be applicable to the Trust, the Trustees or this Trust
Agreement any provision of the laws (statutory or common) of the State of
Delaware pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (a) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (c) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (d) fees or other sums payable to trustees, officers,
agents or employees of a trust, (e) the allocation of receipts and expenditures
to income or principal, or (f) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets.
SECTION 13.3. INTENTION OF THE PARTIES. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Trust Agreement shall be
interpreted to further this intention of the parties.
SECTION 13.4. HEADINGS. Headings contained in this Trust Agreement are
inserted for convenience of reference only and do not affect the interpretation
of this Trust Agreement or any provision hereof.
SECTION 13.5. SUCCESSORS AND ASSIGNS. Whenever in this Trust Agreement
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Trust Agreement by the Sponsor and the Property Trustee shall bind and
inure to the benefit of their respective successors and assigns, whether or not
so expressed.
SECTION 13.6. PARTIAL ENFORCEABILITY. If any provision of this Trust
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, or the application
of such provision to persons or circumstances other than those to which it is
held invalid, shall not be affected thereby.
SECTION 13.7. COUNTERPARTS. This Trust Agreement may contain more than
one counterpart of the signature page and this Trust Agreement may be executed
by the affixing of
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the signature of each of the Property Trustee, the Delaware Trustee and
Administrators to any of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
Signatures appear on the following page
47
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
JPMORGAN CHASE BANK, NOT IN ITS
INDIVIDUAL CAPACITY BUT SOLELY AS
PROPERTY TRUSTEE
By: /s/Rebecca A. Newman
-----------------------------------
Name: Rebecca A. Newman
Title: Vice President
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, AS DELAWARE
TRUSTEE
By: /s/John J. Cashin
-----------------------------------
Name: John J. Cashin
Title: Vice President
BANCINSURANCE CORPORATION, AS
SPONSOR
By: /s/John Sokol
-----------------------------------
Name: John Sokol
Title: President
/s/John Sokol
---------------------------------------
John Sokol, as Administrator
/s/ Si Sokol
---------------------------------------
Si Sokol as, Administrator
/s/Sally Cress
---------------------------------------
Sally Cress, as Administrator
ANNEX I
TERMS OF SECURITIES
Pursuant to Section 6.1 of the Amended and Restated
Declaration of Trust, dated as of September 30, 2003 (as amended from time to
time, the "Trust Agreement"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Trust Agreement):
1. Designation and Number.
(a) 7,000 Floating Rate Preferred Securities of BIC
Statutory Trust II (the "Trust"), with an aggregate stated liquidation amount
with respect to the assets of the Trust of seven million dollars ($7,000,000)
and a stated liquidation amount with respect to the assets of the Trust of
$1,000.00 per Preferred Security, are hereby designated for the purposes of
identification only as the "Preferred Securities". The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Trust Agreement, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.
(b) 217 Floating Rate Common Securities of the Trust (the
"Common Securities") with an aggregate stated liquidation amount with respect to
the assets of the Trust of Two Hundred Seventeen Thousand Dollars ($217,000) and
a stated liquidation amount of $1,000 per Common Security will be evidenced by
Common Security Certificates substantially in the form of Exhibit A-2 to the
Trust Agreement, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions will be payable on each Security for
the period beginning on (and including) September 30, 2003 and ending on (but
excluding) December 31, 2003 and for each successive period beginning on (and
including) December 31 2003, and each succeeding Distribution Payment Date and
ending on (but excluding) the next succeeding Distribution Payment Date (each, a
"Distribution Period") at a variable rate per annum equal to the 3-Month LIBOR,
determined as described below, plus 4.05% (the "Coupon Rate"), applied to the
stated liquidation amount thereof, such rate being the rate of interest payable
on the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one quarterly period will bear interest thereon compounded
quarterly at the applicable Coupon Rate (to the extent permitted by law). A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. In the event that any date on which a
Distribution is payable on the Securities is not a Business Day, then payment of
interest payable on such date shall be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment was
originally payable. The amount of
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interest payable for any Distribution Period will be calculated by applying the
Coupon Rate to the principal amount outstanding at the commencement of the
Distribution Period and multiplying each such amount by the actual number of
days in the Distribution Period concerned divided by 360. All percentages
resulting from any calculations on the Preferred 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)).
(b) Distributions on the Securities will be cumulative,
will accrue from the date of original issuance, and will be payable, subject to
extension of distribution payment periods as described herein, quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing on December 31, 2003 (each a "Distribution Payment Date") when, as
and if available for payment. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no
Indenture Event of Default has occurred and is continuing, by deferring the
payment of interest on the Debentures for up to 20 consecutive quarterly periods
(each an "Extension Period") at any time and from time to time, subject to the
conditions described below, although such interest would continue to accrue on
the Debentures at the Coupon Rate compounded quarterly (to the extent permitted
by law) during any Extension Period. No Extension Period may end on a date other
than a Distribution Payment Date. At the end of any such Extension Period the
Debenture Issuer shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however, that
no Extension Period may extend beyond the Maturity Date and provided further,
however, during any such Extension Period, the Debenture Issuer and its
Affiliates shall 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 Debenture Issuer's or its Affiliates' capital stock (other than payments of
dividends or distributions to the Debenture Issuer) or make any guarantee
payments with respect to the foregoing, or (ii) make any payment of principal of
or interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Debenture Issuer or any Affiliate that rank pari passu in all
respects with or junior in interest to the Debentures (other than, with respect
to clauses (i) and (ii) above, (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Debenture Issuer 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, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Debenture Issuer (or
securities convertible into or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to the applicable
Extension Period, (b) as a result of any reclassification, exchange or
conversion of any class or series of the Debenture Issuer's capital stock (or
any capital stock of a subsidiary of the Debenture Issuer) for any class or
series of the Debenture Issuer's capital stock or of any class or series of the
Debenture Issuer's indebtedness for any class or series of the Debenture
Issuer's capital stock, (c) the purchase of fractional interests in shares of
the Debenture Issuer's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
or pursuant to a merger, consolidation or other business combination, (d) any
declaration of a dividend in connection with any stockholders' rights plan, or
the issuance of rights, stock or other property under any stockholders' rights
plan, or the redemption or repurchase of rights pursuant thereto, (e) any
dividend in the form of stock, warrants, options or
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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 and any
cash payments in lieu of fractional shares issued in connection therewith, or
(f) payments under the Preferred Securities Guarantee). Prior to the termination
of any Extension Period, the Debenture Issuer may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Debenture Issuer may commence a new Extension Period,
subject to the foregoing requirements. No interest or Additional Interest shall
be due and payable during an Extension Period, except at the end thereof, but
each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest. If Distributions
are deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, to Holders of the Securities as they appear on the
books and records of the Trust on the record date immediately preceding such
date. Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust's funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to and to the extent set forth in the Guarantee.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. The relevant record dates shall be 15 days before the
relevant Distribution Payment Date. Distributions payable on any Securities that
are not punctually paid on any Distribution Payment Date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures, as the
case may be, when due (taking into account any Extension Period), will cease to
be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable to
the Person in whose name such Securities are registered on the special record
date or other specified date determined in accordance with the Indenture. If any
date on which Distributions are payable on the Securities is not a Business Day,
then payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such payment date.
(d) In the event that there is any money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the Holders of
the Securities.
3. Liquidation Distribution Upon Dissolution. In the event of the
voluntary or involuntary dissolution of the Trust (each a "Liquidation") other
than in connection with a redemption of the Debentures or as described in
Section 7.1(a)(vii), the Holders of the Securities will be entitled to receive
out of the assets of the Trust available for distribution to Holders of the
Securities, after satisfaction of liabilities to creditors of the Trust (to the
extent not satisfied by
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the Debenture Issuer), distributions equal to the lesser of (i) the aggregate of
the stated liquidation amount of $1,000.00 per Security plus accrued and unpaid
Distributions thereon to the date of payment, to the extent the Trust shall have
funds available therefor, and (ii) the amount of assets of the Trust remaining
available for distribution to Holders in liquidation of the Trust (such amount
being, in either case, the "Liquidation Distribution"), unless in connection
with such Liquidation, the Debentures in aggregate stated principal amount equal
to the aggregate stated liquidation amount of such Securities, with an interest
rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, and having the same
record date as, such Securities, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with the Statutory
Trust Act, shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
The Sponsor, as the Holder of all of the Common Securities, has the
right at any time to dissolve the Trust (including, without limitation, upon the
occurrence of a Special Event) and, after satisfaction of liabilities to
creditors of the Trust, cause the Debentures to be distributed to the Holders of
the Securities on a Pro Rata basis in accordance with the aggregate stated
liquidation amount thereof.
If a Liquidation of the Trust occurs as described in clause (i), (ii),
(iii), (iv) or (v) in Section 7.1(a) of the Trust Agreement, the Trust shall be
liquidated by the Property Trustee as expeditiously as it determines to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust, to the Holders of the Securities, the Debentures on a Pro Rata basis to
the extent not satisfied by the Debenture Issuer, unless such distribution is
determined by the Property Trustee not to be practical, in which event such
Holders will be entitled to receive out of the assets of the Trust available for
distribution to the Holders, after satisfaction of liabilities of creditors of
the Trust to the extent not satisfied by the Debenture Issuer, an amount equal
to the Liquidation Distribution.
If, upon any such Liquidation the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on such Preferred Securities shall be paid to the Holders of the Trust
Securities on a Pro Rata basis, except that if an Event of Default has occurred
and is continuing, the Preferred Securities shall have a preference over the
Common Securities with regard to such distributions.
After the date for any distribution of the Debentures upon dissolution
of the Trust (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) upon surrender of a Holder's Securities certificate, such
Holder of the Securities will receive a certificate representing the Debentures
to be delivered upon such distribution, and (iii) any certificates representing
the Securities still outstanding will be deemed to represent undivided
beneficial interests in such of the Debentures as have an aggregate principal
amount equal to the aggregate stated liquidation amount with an interest rate
identical to the Coupon Rate of, and bearing accrued and unpaid interest equal
to accrued and unpaid distributions on, the Securities until such certificates
are presented to the Debenture Issuer or its agent for transfer or reissuance
(and until such certificates are so surrendered, no payments of interest or
principal shall be made to Holders of Securities in respect of any payments due
and payable under the Debentures;
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provided, however that such failure to pay shall not be deemed to be an Event of
Default and shall not entitle the Holder to the benefits of the Guarantee), and
(iv) all rights of Holders of Securities under the Trust Agreement shall cease,
except the right of such Holders to receive Debentures upon surrender of
certificates representing such Securities.
4. Redemption and Distribution.
(a) The Debentures will mature on September 30, 2033. The
Debentures may be redeemed by the Debenture Issuer, in whole or in part at any
time and from time to time on or after September 30, 2008, at the Optional
Redemption Price. In addition, the Debentures may be redeemed by the Debenture
Issuer at the Special Redemption Price, in whole but not in part, at any
Distribution Payment Date, upon the occurrence and continuation of a Special
Event within 120 days following the occurrence of such Special Event at the
Special Redemption Price, upon not less than 45 nor more than 75 days' notice to
holders of such Debentures so long as such Special Event is continuing.
"3-Month LIBOR" means the London interbank offered interest rate for
three-month, U.S. dollar deposits determined by the Calculation Agent in the
following order of priority:
(1) On the second LIBOR Business Day (as defined below)
prior to an Interest Payment Date (except with respect to the first
interest payment period, such date shall be September 26, 2003) (each
such day, a "LIBOR Determination Date"), LIBOR for any given security
shall for the following interest payment period equal the rate, as
obtained by the Calculation Agent from Bloomberg Financial Markets
Commodities News, for 3- month Eurodollar deposits that appears on Dow
Jones Telerate Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange
Definitions), or such other page as may replace such Page 3750, as of
11:00 a.m. (London time) on such LIBOR Determination Date.
(2) If, on any LIBOR Determination Date, such rate does
not appear on Dow Jones Telerate Page 3750 or such other page as may
replace such Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks (as
defined below) to leading banks in the London interbank market for
3-month Eurodollar deposits in an amount determined by the Calculation
Agent by reference to requests for quotations as of approximately 11:00
a.m. (London time) on the LIBOR Determination Date made by the
Calculation Agent to the Reference Banks. If, on any LIBOR
Determination Date, at least two of the Reference Banks provide such
quotations, LIBOR shall equal such arithmetic mean of such quotations.
If, on any LIBOR Determination Date, only one or none of the Reference
Banks provide such quotations, LIBOR shall be deemed to be the
arithmetic mean of the offered quotations that leading banks in the
City of New York selected by the Calculation Agent are quoting on the
relevant LIBOR Determination Date for 3-month Eurodollar deposits in an
amount determined by the Calculation Agent by reference to the
principal London offices of leading banks in the London interbank
market; provided that, if the Calculation Agent is required but is
unable to determine a rate in accordance with at least one of the
procedures provided above, LIBOR shall be LIBOR as determined on the
previous LIBOR Determination Date.
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(3) As used herein: "Reference Banks" means four major
banks in the London interbank market selected by the Calculation Agent;
and "LIBOR Business Day" means a day on which commercial banks are open
for business (including dealings in foreign exchange and foreign
currency deposits) in London.
(b) The Coupon Rate for any Distribution Period will at no time be
higher than the maximum rate then permitted by New York law as the same may be
modified by United States law.
"Investment Company Event" means the receipt by the Debenture Issuer
and the Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or written
change (including any announced prospective 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 which change or prospective change becomes effective or would become
effective, as the case may be, on or after the date of the issuance of the
Debentures.
"Maturity Date" means September 30, 2033.
"Optional Redemption Price" means 100% of the principal amount of the
Debentures being redeemed, plus accrued and unpaid interest on such Debentures
to the Redemption Date.
"Redemption Date" shall mean the date fixed for the redemption of
Preferred Securities, which shall be on any March 31, June 30, September 30 or
December 31, on or after September 30, 2008.
"Special Event" means a Tax Event or an Investment Company Event.
"Special Redemption Date" means a date on which a Special Event
redemption occurs, which shall be on any March 31, June 30, September 30 or
December 31 within 120 days following the occurrence of a Special Event.
"Special Redemption Price" means (1) 107.5% of the principal amount of
the Debentures being redeemed on a Special Redemption Date that occurs before
September 30, 2008 and (ii) 100% of the principal amount of the Debentures being
redeemed on a Special Redemption Date that occurs on September 30, 2008 or
after, plus, in each case, accrued and unpaid interest on such Debentures to the
Special Redemption Date.
"Tax Event" means the receipt by the Debenture Issuer 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, field service advice, regulatory procedure, notice
or announcement including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action")) or judicial decision
interpreting or applying such laws or regulations, regardless of
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whether such Administrative Action or judicial decision is issued to or in
connection with a proceeding involving the Debenture Issuer 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 Debentures, there
is more than an insubstantial risk that: (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Debentures; (ii) interest
payable by the Debenture Issuer on the Debentures is not, or within 90 days of
the date of such opinion, will not be, deductible by the Debenture Issuer, 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 more
than a de minimis amount of other taxes, duties or other governmental charges.
(a) Upon the repayment in full at maturity or redemption
in whole or in part of the Debentures (other than following the distribution of
the Debentures to the Holders of the Securities), the proceeds from such
repayment or payment shall concurrently be applied to redeem Pro Rata at the
applicable Optional Redemption Price or Special Redemption Price, as applicable,
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed; provided, however,
that holders of such Securities shall be given not less than 30 nor more than 60
days' notice of such redemption (other than at the scheduled maturity of the
Debentures).
(b) If fewer than all the outstanding Securities are to
be so redeemed, the Common Securities and the Preferred Securities will be
redeemed Pro Rata and the Preferred Securities to be redeemed will be redeemed
Pro Rata from each Holder of Preferred Securities.
(c) The Trust may not redeem fewer than all the
outstanding Preferred Securities unless all accrued and unpaid Distributions
have been paid on all Preferred Securities for all quarterly Distribution
periods terminating on or before the date of redemption.
(d) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of
distribution of the Debentures in exchange for the Securities (a
"Redemption/Distribution Notice") will be given by the Administrators
on behalf of the Trust by mail to each Holder of Securities to be
redeemed or exchanged not fewer than 30 nor more than 60 days before
the date fixed for redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption of the Debentures.
For purposes of the calculation of the date of redemption or exchange
and the dates on which notices are given pursuant to this paragraph
4(e)(i), a Redemption/Distribution Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail, postage
prepaid, to Holders of such Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of such Securities at the
address of each such Holder appearing on the books and records of the
Trust. No defect in the Redemption/Distribution Notice or in the
mailing thereof with respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect to any other
Holder.
I-7
(ii) If the Securities are to be redeemed and the
Trust gives a Redemption/ Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this paragraph 4
(which notice will be irrevocable), then, provided that the Property
Trustee has a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will pay
the relevant Optional Redemption Price or Special Redemption Price, as
applicable, to the Holders of such Securities by check mailed to the
address of each such Holder appearing on the books and records of the
Trust on the Redemption Date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required then immediately prior
to the close of business on the date of such deposit Distributions will
cease to accrue on the Securities so called for redemption and all
rights of Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to receive
the applicable Optional Redemption Price or Special Redemption Price
specified in paragraph 4(a), but without interest on such Optional
Redemption Price or Special Redemption Price. If any date fixed for
redemption of Securities is not a Business Day, then payment of any
such Optional Redemption Price or Special Redemption Price payable on
such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Optional Redemption Price
or Special Redemption Price in respect of any Securities is improperly
withheld or refused and not paid either by the Trust or by the
Debenture Issuer as guarantor pursuant to the Guarantee, Distributions
on such Securities will continue to accrue at the Coupon Rate from the
original Redemption Date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Optional Redemption Price or
Special Redemption Price. In the event of any redemption of the
Preferred Securities issued by the Trust in part, the Trust shall not
be required to (i) issue, register the transfer of or exchange any
Security during a period beginning at the opening of business 15 days
before any selection for redemption of the Preferred Securities and
ending at the close of business on the earliest date on which the
relevant notice of redemption is deemed to have been given to all
Holders of the Preferred Securities to be so redeemed or (ii) register
the transfer of or exchange any Preferred Securities so selected for
redemption, in whole or in part, except for the unredeemed portion of
any Preferred Securities being redeemed in part.
(iii) Redemption/Distribution Notices shall be
sent by the Administrators on behalf of the Trust to (A) in respect of
the Preferred Securities, the Holders thereof and (B) in respect of the
Common Securities, the Holder thereof.
(iv) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities laws),
the Sponsor or any of its subsidiaries may at any time and from time to
time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
I-8
5. Voting Rights - Preferred Securities.
(a) Except as provided under paragraphs 5(b) and 7 and as
otherwise required by law and the Trust Agreement, the Holders of the Preferred
Securities will have no voting rights. The Administrators are required to call a
meeting of the Holders of the Preferred Securities if directed to do so by
Holders of at least 25% in liquidation amount of the Preferred Securities.
(b) Subject to the requirements of obtaining a tax
opinion by the Property Trustee in certain circumstances set forth in the last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Preferred Securities, voting separately as a class, have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under the Trust Agreement, including the right to
direct the Property Trustee, as holder of the Debentures, to (i) exercise the
remedies available under the Indenture as the holder of the Debentures, (ii)
waive any past default that is waivable under the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent on behalf of all the Holders of the
Preferred Securities to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required; provided,
however, that, where a consent or action under the Indenture would require the
consent or act of the holders of greater than a simple majority in aggregate
principal amount of Debentures (a "Super Majority") affected thereby, the
Property Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of the
Preferred Securities outstanding which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. If the Property
Trustee fails to enforce its rights under the Debentures after the Holders of a
Majority in liquidation amount of such Preferred Securities have so directed the
Property Trustee, to the fullest extent permitted by law, a Holder of the
Preferred Securities may institute a legal proceeding directly against the
Debenture Issuer to enforce the Property Trustee's rights under the Debentures
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the Debentures
on the date the interest or principal is payable (or in the case of redemption,
the Redemption Date or the Special Redemption Date, as applicable), then a
Holder of record of the Preferred Securities may directly institute a proceeding
for enforcement of payment, to such Holder directly of the principal of or
interest on the Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder on or
after the respective due dates specified in the Debentures. The Property Trustee
shall notify all Holders of the Preferred Securities of any default actually
known to the Property Trustee with respect to the Debentures unless (x) such
default has been cured prior to the giving of such notice or (y) the Property
Trustee determines in good faith that the withholding of such notice is in the
interest of the Holders of such Preferred Securities, except where the default
relates to the payment of principal of or interest on any of the Debentures.
Such notice shall state that such Indenture Event of Default also constitutes an
Event of Default hereunder. Except with respect to directing the time, method
and place of conducting a proceeding for a remedy, the Property Trustee shall
not take any of the actions described in clauses (i), (ii) or (iii) above unless
the Property Trustee has obtained an opinion of tax counsel
I-9
to the effect that, as a result of such action, the Trust will not be classified
as other than a grantor trust for United States federal income tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture, the Property Trustee shall request
the direction of the Holders of the Securities with respect to such amendment
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a Majority in liquidation amount of
the Securities voting together as a single class; provided, however, that where
a consent under the Indenture would require the consent of a Super Majority, the
Property Trustee may only give such consent at the direction of the Holders of
at least the proportion in liquidation amount of the Securities outstanding
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding. The Property Trustee shall not take any such
action in accordance with the directions of the Holders of the Securities unless
the Property Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Event of Default hereunder. Any required approval or direction
of Holders of the Preferred Securities may be given at a separate meeting of
Holders of the Preferred Securities convened for such purpose, at a meeting of
all of the Holders of the Securities in the Trust or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
Holders of the Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of the Preferred Securities. Each such notice will include
a statement setting forth the following information (i) the date of such meeting
or the date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the Holders of the Preferred Securities will be required for the Trust to
redeem and cancel Preferred Securities or to distribute the Debentures in
accordance with the Trust Agreement and the terms of the Securities.
Notwithstanding that Holders of the Preferred Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not entitle the Holder thereof to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
In no event will Holders of the Preferred Securities have the right to
vote to appoint, remove or replace the Administrators, which voting rights are
vested exclusively in the Sponsor as the Holder of all of the Common Securities
of the Trust. Under certain circumstances as more fully described in the Trust
Agreement, Holders of Preferred Securities have the right to vote to appoint,
remove or replace the Trustees.
I-10
6. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 6(b), 6(c) and 7
and as otherwise required by law and the Trust Agreement, the Common Securities
will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article IV of the Trust Agreement, to vote to appoint, remove or
replace any Administrators.
(c) Subject to Section 6.7 of the Trust Agreement and
only after each Event of Default (if any) with respect to the Preferred
Securities has been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph, the Holders of a
Majority in liquidation amount of the Common Securities, voting separately as a
class, may direct the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Trust Agreement, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures, (ii) waive any past
default and its consequences that is waivable under the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable; provided, however, that, where a
consent or action under the Indenture would require a Super Majority, the
Property Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of the
Common Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Notwithstanding this paragraph
6(c), the Property Trustee shall not revoke any action previously authorized or
approved by a vote or consent of the Holders of the Preferred Securities. Other
than with respect to directing the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall not take any action
described in (i), (ii) or (iii) above, unless the Property Trustee has obtained
an opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action. If the Property Trustee fails to enforce its
rights under the Trust Agreement, to the fullest extent permitted by law, any
Holder of the Common Securities may institute a legal proceeding directly
against any Person to enforce the Property Trustee's rights under the Trust
Agreement, without first instituting a legal proceeding against the Property
Trustee or any other Person.
Any approval or direction of Holders of the Common Securities may be
given at a separate meeting of Holders of the Common Securities convened for
such purpose, at a meeting of all of the Holders of the Securities in the Trust
or pursuant to written consent. The Administrators will cause a notice of any
meeting at which Holders of the Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of the Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
I-11
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Trust Agreement and the terms of the
Securities.
7. Amendments to Trust Agreement and Indenture.
(a) In addition to any requirements under Section 11.1 of
the Trust Agreement, if any proposed amendment to the Trust Agreement provides
for, or the Property Trustee, Sponsor or Administrators otherwise propose to
effect, (i) any action that would adversely affect the powers, preferences or
special rights of the Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the Liquidation of the Trust, other than as
described in Section 7.1 of the Trust Agreement, then the Holders of outstanding
Securities, voting together as a single class, will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a Majority in liquidation
amount of the Securities, affected thereby; provided, however, if any amendment
or proposal referred to in clause (i) above would adversely affect only the
Preferred Securities or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority in
liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as
the holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Property Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification, or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
a Super Majority, the Property Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of the
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
(c) Notwithstanding the foregoing, no amendment or
modification may be made to the Trust Agreement if such amendment or
modification would (i) cause the Trust to be classified for purposes of United
States federal income taxation as other than a grantor trust, (ii) reduce or
otherwise adversely affect the powers, rights, duties or immunities of the
Property Trustee or the Delaware Trustee or (iii) cause the Trust to be deemed
an Investment Company which is required to be registered under the Investment
Company Act.
(d) Notwithstanding any provision of the Trust Agreement,
the right of any Holder of the Preferred Securities to receive payment of
distributions and other payments upon redemption or otherwise, on or after their
respective due dates, or to institute a suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder. For the protection and enforcement of the
foregoing provision, each and every Holder of the Preferred Securities shall be
entitled to such relief as can be given either at law or equity.
I-12
8. Pro Rata. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of the Securities according to the aggregate liquidation amount of
the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities then outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities Pro Rata according to the aggregate liquidation amount of
the Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking. The Preferred Securities rank pari passu with and
payment thereon shall be made Pro Rata with the Common Securities except that,
where an Event of Default has occurred and is continuing, the rights of Holders
of the Common Securities to receive payment of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of the
Holders of the Preferred Securities with the result that no payment of any
Distribution on, or Optional Redemption Price (or Special Redemption Price) of,
any Common Security, and no other payment on account of redemption, liquidation
or other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions on all outstanding Preferred
Securities for all distribution periods terminating on or prior thereto, or in
the case of payment of the Optional Redemption Price (or Special Redemption
Price) the full amount of such Optional Redemption Price (or Special Redemption
Price) on all outstanding Preferred Securities then called for redemption, shall
have been made or provided for, and all funds immediately available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Optional Redemption Price (or Special Redemption Price)
of, the Preferred Securities then due and payable.
10. Acceptance of Guarantee and Indenture. Each Holder of the
Preferred Securities and the Common Securities, by the acceptance of such
Securities, agrees to the provisions of the Guarantee, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights. The Holders of the Securities shall have
no preemptive or similar rights to subscribe for any additional securities of
the Trust.
12. Miscellaneous. These terms constitute a part of the Trust
Agreement. The Sponsor will provide a copy of the Trust Agreement, the
Guarantee, and the Indenture to a Holder without charge on written request to
the Sponsor at its principal place of business.
I-13
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. 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 AND ANY APPLICABLE STATE SECURITIES LAWS. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR THE TRUST, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION
IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS PREFERRED SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF
SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE SPONSOR'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION `SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF
TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF 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 THE SECURITIES OR ANY
A-1-1
INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR 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 IS NOT PROHIBITED BY SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO
HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT
AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN
TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 AND MULTIPLES OF
$1,000.00 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF SECURITIES IN A BLOCK
HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE
FOREGOING RESTRICTIONS.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE
TRUST AGREEMENT TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.
CERTIFICATE NUMBER ___ _____ PREFERRED SECURITIES
__________, 2003
CERTIFICATE EVIDENCING FLOATING RATE PREFERRED SECURITIES
OF
BIC STATUTORY TRUST II
(LIQUIDATION AMOUNT $1,000.00 PER PREFERRED SECURITY)
BIC Statutory Trust II, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that ________________ (the
"Holder") is the registered owner of [$AMOUNT(#)] securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
(liquidation amount $1,000.00 per capital security) (the "Preferred
Securities").
A-1-2
Subject to the Trust Agreement (as defined below), the Preferred Securities are
transferable on the books and records of the Trust in person or by a duly
authorized attorney, upon surrender of this Certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued pursuant to, and shall in all respects be subject
to, the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of September 30, 2003, among John Sokol, Si Sokol and Sally Cress as
Administrators, JPMorgan Chase Bank, as Property Trustee, Chase Manhattan Bank
USA, National Association, as Delaware Trustee, Bancinsurance Corporation, as
Sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Trust, including the designation of the terms of the Preferred
Securities as set forth in Annex I to such amended and restated Trust Agreement
as the same may be amended from time to time (the "Trust Agreement").
Capitalized terms used herein but not defined shall have the meaning given them
in the Trust Agreement. The Holder is entitled to the benefits of the Guarantee
to the extent provided therein. The Sponsor will provide a copy of the Trust
Agreement, the Guarantee, and the Indenture to the Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this Security, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of beneficial ownership in the Debentures.
This Preferred Security is governed by, and construed in accordance
with, the laws of the State of Delaware, without regard to principles of
conflict of laws.
Signatures appear on following page
A-1-3
WITNESS WHEREOF, the Trust has duly executed this certificate.
BIC STATUTORY TRUST II
By:
-----------------------------------
Name:
Title: Administrator
CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
JPMORGAN CHASE BANK, AS THE PROPERTY
TRUSTEE
By:
-----------------------------------
Authorized Signatory
A-1-4
[FORM OF REVERSE OF SECURITY]
Distributions on each Preferred Security will be payable for the period
beginning on (and including) September 30, 2003 and ending on (but excluding)
December 31, 2003 and for each successive period beginning on (and including)
December 31, 2003, and each succeeding Distribution Payment Date, and ending on
(but excluding) the next succeeding Distribution Payment Date (each a
"Distribution Period"), at a variable rate equal to 3-Month LIBOR, determined as
described below, plus 4.05% (the "Coupon Rate"), applied to the stated
liquidation amount of $1,000.00 per Preferred Security, such rate being the rate
of interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than a quarterly period will bear interest
thereon compounded quarterly at the Distribution late (to the extent permitted
by applicable law). The term "Distributions" as used herein includes payments of
Interest and any principal on the Debentures held by the Property Trustee unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Property Trustee and to the extent
the Property Trustee has funds available therefor. In the event that any date on
which a Distribution is payable on this Preferred Security is not a Business
Day, then a payment of the Distribution payable on such date will be made on the
next succeeding day which is a Business Day (and without any Distribution or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date the payment was originally payable. The amount of
interest payable for any Distribution Period will be calculated by applying the
Coupon Rate to the principal amount outstanding at the commencement of the
Distribution Period and multiplying each such amount by the actual number of
days in the Distribution Period concerned divided by 360.
"3-Month LIBOR" means the London interbank offered interest rate for
three-month, U.S. dollar deposits determined by the Calculation Agent in the
following order of priority:
(1) On the second LIBOR Business Day (as defined below)
prior to an Interest Payment Date (except with respect to the first
interest payment period, such date shall be September 26, 2003) (each
such day, a "LIBOR Determination Date"), LIBOR for any given security
shall for the following interest payment period equal the rate, as
obtained by the Calculation Agent from Bloomberg Financial Markets
Commodities News, for 3- month Eurodollar deposits that appears on Dow
Jones Telerate Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange
Definitions), or such other page as may replace such Page 3750, as of
11:00 a.m. (London time) on such LIBOR Determination Date.
(2) If, on any LIBOR Determination Date, such rate does
not appear on Dow Jones Telerate Page 3750 or such other page as may
replace such Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks (as
defined below) to leading banks in the London interbank market for
3-month Eurodollar deposits in an amount determined by the Calculation
Agent by reference to requests for quotations as of approximately 11:00
a.m. (London time) on the LIBOR Determination Date made by the
Calculation Agent to the Reference Banks. If, on any LIBOR
Determination Date, at least two of the Reference Banks provide such
A-1-5
quotations, LIBOR shall equal such arithmetic mean of such quotations.
If, on any LIBOR Determination Date, only one or none of the Reference
Banks provide such quotations, LIBOR shall be deemed to be the
arithmetic mean of the offered quotations that leading banks in the
City of New York selected by the Calculation Agent are quoting on the
relevant LIBOR Determination Date for 3-month Eurodollar deposits in an
amount determined by the Calculation Agent by reference to the
principal London offices of leading banks in the London interbank
market; provided that, if the Calculation Agent is required but is
unable to determine a rate in accordance with at least one of the
procedures provided above, LIBOR shall be LIBOR as determined on the
previous LIBOR Determination Date.
(3) As used herein: "Reference Banks" means four major
banks in the London interbank market selected by the Calculation Agent;
and "LIBOR Business Day" means a day on which commercial banks are open
for business (including dealings in foreign exchange and foreign
currency deposits) in London.
The Coupon Rate for any Distribution Period will at no time be higher
than the maximum rate then permitted by New York law as the same may be modified
by United States law.
All percentages resulting from any calculations on the Preferred
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)).
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on December 31, 2003. The Debenture Issuer
has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period for up to 20 consecutive
quarterly periods (each an "Extension Period") on the Debentures, subject to the
conditions described below, although such interest would continue to accrue on
the Debentures at an annual rate equal to the Coupon Rate compounded quarterly
to the extent permitted by law during any Extension Period. No Extension Period
may end on a date other than a Distribution Payment Date. At the end of any such
Extension Period the Debenture Issuer shall pay all interest then accrued and
unpaid on the Debentures (together with Additional Interest thereon); provided,
however, that no Extension Period may extend beyond the Maturity Date. Prior to
the termination of any Extension Period, the Debenture Issuer may further extend
such period, provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Debenture Issuer may commence a new Extension Period,
subject to the foregoing requirements. No interest or Additional Interest shall
be due and payable during an Extension Period, except at the end thereof, but
each installment of interest that would otherwise have been due and payable
during such Extension Period shall bear Additional Interest. If Distributions
are deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, to Holders of the Securities as they appear on the
books and records
A-1-6
of the Trust on the record date immediately preceding such date. Distributions
on the Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such distributions in the Property Account of the Trust. The Trust's
funds available for Distribution to the Holders of the Securities will be
limited to payments received from the Debenture Issuer. The payment of
Distributions out of moneys held by the Trust is guaranteed by the Guarantor
pursuant to and to the extent set forth in the Guarantee.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
A-1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
_______________________________________________________________________
(Insert assignee's social security or tax identification number)_______
_______________________________________________________________________
_______________________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
_______________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of
the Trust. The agent may substitute another to act for him or her.
Date:___________________________
Signature:______________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
Signature Guarantee:(1)
- ------------------
(1) Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-1-8
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH SECTION
8.1 OF THE TRUST AGREEMENT.
CERTIFICATE NUMBER C-1 217 COMMON SECURITIES
SEPTEMBER 30, 2003
CERTIFICATE EVIDENCING FLOATING RATE COMMON SECURITIES
OF
BIC STATUTORY TRUST II
BIC Statutory Trust II, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Bancinsurance Corporation
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust (the
"Common Securities"). The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of September 30, 2003, among John Sokol, Si Sokol and Sally Cress, as
Administrators, JPMorgan Chase Bank, as Property Trustee, Chase Manhattan Bank
USA, National Association, as Delaware Trustee, Bancinsurance Corporation, as
Sponsor, and the holders from time to time of undivided beneficial interests in
the assets of the Trust including the designation of the terms of the Common
Securities as set forth in Annex I to such amended and restated declaration, as
the same may be amended from time to time (the "Trust Agreement"). Capitalized
terms used herein but not defined shall have the meaning given them in the Trust
Agreement. The Sponsor will provide a copy of the Trust Agreement, the Guarantee
and the Indenture to the Holder without charge upon written request to the
Sponsor at its principal place of business.
As set forth in the Trust Agreement, where an Event of Default has
occurred and is continuing, the rights of Holders of Common Securities to
payment in respect of Distributions and payments upon Liquidation, redemption or
otherwise are subordinated to the rights of payment of Holders of the Preferred
Securities.
Upon receipt of this Certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
A-2-1
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
This Common Security is governed by, and construed in accordance with,
the laws of the State of Delaware, without regard to principles of conflict of
laws.
A-2-2
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
BIC STATUTORY TRUST II
By: ___________________________________
Name:
Title: Administrator
A-2-3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be identical in
amount to the Distributions payable on each Preferred Security, beginning on
(and including) September 30, 2003 and ending on (but excluding) December 31,
2003 and for each successive period beginning on (and including) December 31,
2003, and each succeeding Distribution Payment Date, and ending on (but
excluding) the next succeeding Distribution Payment Date (each a "Distribution
Period"), at a variable rate equal to 3-Month LIBOR, determined as described
below, plus 4.05% (the "Coupon Rate"); applied to the stated liquidation amount
of $1,000.00 per Common Security, such rate being the rate of interest payable
on the Debentures to be held by the Property Trustee. Distributions in arrears
for more than one quarterly period will bear interest thereon compounded at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes payments of Interest and any principal
on the Debentures held by the Property Trustee unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. In the event that any date on which a
Distribution is payable on this Common Security is not a Business Day, then a
payment of the Distribution payable on such date will be made on the next
succeeding day which is a Business Day (and without any Distribution or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date the payment was originally payable. The amount of interest payable
for any Distribution Period will be calculated by applying the Coupon Rate to
the principal amount outstanding at the commencement of the Distribution Period
and multiplying each such amount by the actual number of days in the
Distribution Period concerned divided by 360.
"3-Month LIBOR" means the London interbank offered interest rate for
three-month, U.S. dollar deposits determined by the Calculation Agent in the
following order of priority:
(1) On the second LIBOR Business Day (as defined below)
prior to an Interest Payment Date (except with respect to the first
interest payment period, such date shall be September 26, 2003) (each
such day, a "LIBOR Determination Date"), LIBOR for any given security
shall for the following interest payment period equal the rate, as
obtained by the Calculation Agent from Bloomberg Financial Markets
Commodities News, for 3- month Eurodollar deposits that appears on Dow
Jones Telerate Page 3750 (as defined in the International Swaps and
Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange
Definitions), or such other page as may replace such Page 3750, as of
11:00 a.m. (London time) on such LIBOR Determination Date.
(2) If, on any LIBOR Determination Date, such rate does
not appear on Dow Jones Telerate Page 3750 or such other page as may
replace such Page 3750, the Calculation Agent shall determine the
arithmetic mean of the offered quotations of the Reference Banks (as
defined below) to leading banks in the London interbank market for
3-month Eurodollar deposits in an amount determined by the Calculation
Agent by reference to requests for quotations as of approximately 11:00
a.m. (London time) on the LIBOR Determination Date made by the
Calculation Agent to the Reference Banks. If, on any LIBOR
Determination Date, at least two of the Reference Banks provide such
A-2-4
quotations, LIBOR shall equal such arithmetic mean of such quotations.
If, on any LIBOR Determination Date, only one or none of the Reference
Banks provide such quotations, LIBOR shall be deemed to be the
arithmetic mean of the offered quotations that leading banks in the
City of New York selected by the Calculation Agent are quoting on the
relevant LIBOR Determination Date for 3-month Eurodollar deposits in an
amount determined by the Calculation Agent by reference to the
principal London offices of leading banks in the London interbank
market; provided that, if the Calculation Agent is required but is
unable to determine a rate in accordance with at least one of the
procedures provided above, LIBOR shall be LIBOR as determined on the
previous LIBOR Determination Date.
(3) As used herein: "Reference Banks" means four major banks
in the London interbank market selected by the Calculation Agent; and
"LIBOR Business Day" means a day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency
deposits) in London.
The Coupon Rate for any Distribution Period will at no time be higher
than the maximum rate then permitted by New York law as the same may be modified
by United States law.
All percentages resulting from any calculations on the Common
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)).
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on December 31, 2003. The Debenture Issuer
has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period for up to 20 consecutive
quarterly periods (each an "Extension Period") on the Debentures, subject to the
conditions described below, although such interest would continue to accrue on
the Debentures at an annual rate equal to the Coupon Rate compounded quarterly
to the extent permitted by law during any Extension Period. No Extension Period
may end on a date other than an Interest Payment Date. At the end of any such
Extension Period the Sponsor shall pay all interest then accrued and unpaid on
the Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date. Prior to the
termination of any Extension Period, the Sponsor may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 20 consecutive quarterly
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Sponsor may commence a new Extension Period, subject to
the foregoing requirements. No interest or Additional Interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, to Holders of the Securities as they appear on the
books and records of the Trust on the record date
A-2-5
immediately preceding such date. Distributions on the Securities must be paid on
the dates payable (after giving effect to any Extension Period) to the extent
that the Trust has funds available for the payment of such distributions in the
Property Account of the Trust. The Trust's funds available for Distribution to
the Holders of the Securities will be limited to payments received from the
Debenture Issuer.
The Common Securities shall be redeemable as provided in the Trust
Agreement.
A-2-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
_______________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________
_______________________________________________________________________
(Insert address and zip code of assignee) and irrevocably appoints
_______________________________________________________________________
______________________________________________________________
agent to transfer this Common Security Certificate on the
books of the Trust. The agent may substitute another to act
for him or her.
Date:_________________________________________________________
Signature:____________________________________________________
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
Signature:____________________________________________________
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
Signature Guarantee:(2)
- ------------------
(2) Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union, meeting the
requirements of the Security registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-2-7
EXHIBIT B
SPECIMEN OF INITIAL DEBENTURE
(See Tab No. 14)
B-1
EXHIBIT C
PURCHASE AGREEMENT
(See Tab No. 1)
C-1
EXHIBIT D
FORM OF TRANSFEROR CERTIFICATE
TO BE EXECUTED BY QIBS
__________, [ ]
Bancinsurance Corporation
BIC Statutory Trust II
250 East Broad Street, 10th Floor
Columbus, Ohio 43215
Re: Purchase of $________ stated liquidation amount of
Floating Rate Preferred Securities (the "Preferred
Securities") of BIC Statutory Trust II
Reference is hereby made to the Amended and Restated Declaration of
Trust of BIC Statutory Trust II, dated as of September 30, 2003 (the "Trust
Agreement"), among John Sokol, Si Sokol, Sally Cress, as Administrators, Chase
Manhattan Bank USA, National Association, as Delaware Trustee, JPMorgan Chase
Bank, as Property Trustee, Bancinsurance Corporation as Sponsor, and the holders
from time to time of undivided beneficial interests in the assets of BIC
Statutory Trust II. Capitalized terms used but not defined herein shall have the
meanings given them in the Trust Agreement.
This letter relates to $________________________ aggregate liquidation
amount of Preferred Securities which are held in the name of [name of
transferor] (the "Transferor").
In accordance with Article VI of the Trust Agreement, the Transferor
hereby certifies that such Preferred Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Preferred
Securities and (ii) Rule 144A under the Securities Act ("Rule 144A"), to a
transferee that the Transferor reasonably believes is purchasing the Preferred
Securities for its own account or an account with respect to which the
transferee exercises sole investment discretion and the transferee and any such
account is a "qualified institutional buyer" within the meaning of Rule 144A, in
a transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
(Name of Transferor)
By: ___________________________________
Name:
Title:
E-1
Date:________________________
EXHIBIT E
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY TRANSFEREES OTHER THAN QIBS
__________, [ ]
Bancinsurance Corporation
BIC Statutory Trust II
250 East Broad Street, 10th Floor
Columbus, Ohio 43215
Re: Purchase of $____________ stated liquidation amount
of Floating Rate Preferred Securities (the "Preferred
Securities") of BIC Statutory Trust II
Ladies and Gentlemen:
In connection with our purchase of the Preferred Securities we
confirm that:
1. We understand that the Floating Rate Preferred
Securities (the "Preferred Securities") of BIC Statutory Trust II (the "Trust")
(including the guarantee agreement (the "Guarantee") of Bancinsurance
Corporation (the "Company") executed in connection therewith) and the Floating
Rate Junior Subordinated Debentures due 2033 of the Company (the "Subordinated
Debentures") (the entire amount of the Trust's outstanding Preferred Securities,
the Guarantee and the Subordinated Debentures together being referred to herein
as the "Offered Securities"), have not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), and may not be offered or sold
except as permitted in the following sentence. We agree on our own behalf and on
behalf of any investor account for which we are purchasing the Offered
Securities that, if we decide to offer, sell or otherwise transfer any such
Offered Securities, (i) such offer, sale or transfer will be made only (a) to
the Trust, (b) to a person we reasonably believe is a "qualified institutional
buyer" (a "QIB") (as defined in Rule 144 under the Securities Act) in a
transaction meeting the requirements of Rule 144A, (c) to an institutional
"accredited investor" within the meaning of subparagraph (a) (1), (2), (3) or
(7) of Rule 501 under the Securities Act that is acquiring Offered Securities
for its own account, or for the account of such an "accredited investor," for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution thereof in violation of the Securities Act, (d) pursuant
to an effective registration statement under the Securities Act, or (e) pursuant
to an exemption from the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction and, in the case of (c) or (e), subject to the right of
the Trust and the depositor to require an opinion of counsel and other
information satisfactory to each of them. The foregoing restrictions on resale
will not apply subsequent to the date on which, in the written opinion of
counsel, the Preferred Securities are not "restricted securities" within the
meaning of Rule 144 under the Securities Act. If any resale or other transfer of
the Offered Securities is proposed to be made pursuant to clause (c) or (e)
above, the transferor shall deliver a letter from the transferee substantially
in the form of this
letter to the Property Trustee as Registrar, which shall provide as applicable,
among other things, that the transferee is an "accredited investor" within the
meaning of subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the
Securities Act that is acquiring such Securities for investment purposes and not
for distribution in violation of the Securities Act. We acknowledge on our
behalf and on behalf of any investor account for which we are purchasing
Securities that the Trust and the Company reserve the right prior to any offer,
sale or other transfer pursuant to clause (c) or (e) to require the delivery of
any opinion of counsel, certifications and/or other information satisfactory to
the Trust and the Company. We understand that the certificates for any Offered
Security that we receive will bear a legend substantially to the effect of the
foregoing.
2. We are an "accredited investor" within the meaning of
subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act
purchasing for our own account or for the account of such an "accredited
investor," and we are acquiring the Offered Securities for investment purposes
and not with view to, or for offer or sale in connection with, any distribution
in violation of the Securities Act, and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Offered Securities, and we and any account for
which we are acting are each able to bear the economic risks of our or its
investment.
3. We are acquiring the Offered Securities purchased by
us for our own account (or for one or more accounts as to each of which we
exercise sole investment discretion and have authority to make, and do make, the
statements contained in this letter) and not with a view to any distribution of
the Offered Securities, subject, nevertheless, to the understanding that the
disposition of our property will at all times be and remain within our control.
4. In the event that we purchase any Preferred
Securities or any Subordinated Debentures, we will acquire such Preferred
Securities having an aggregate stated liquidation amount of not less than
$100,000 or such Subordinated Debentures having an aggregate principal amount
not less than $100,000, for our own account and for each separate account for
which we are acting.
5. We acknowledge that we are not a fiduciary of (i) 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 (ii) an entity whose underlying assets
include "plan assets" by reason of any Plan's investment in the entity, and are
not purchasing any of the Offered Securities on behalf of or with "plan assets"
by reason of any Plan's investment in the entity.
6. We acknowledge that the Trust and the Company and
others will rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements and agree that if any of the
acknowledgments, representations, warranties and agreements deemed to have been
made by our purchase of any of the Offered Securities are no longer accurate, we
shall promptly notify the Company. If we are acquiring any Offered Securities as
a fiduciary or agent for one or more investor accounts, we represent that we
have sole discretion with respect to each such investor account and that we have
full power to make
the foregoing acknowledgments, representations and agreement on behalf of each
such investor account.
_______________________________________
(Name of Purchaser)
By: ___________________________________
Date: _________________________________
Upon transfer, the Preferred Securities (having a stated
liquidation amount of $_____________) would be registered in the name of the new
beneficial owner as follows.
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________