Exhibit 4.2
AMENDED AND RESTATED DECLARATION OF TRUST
OF
NPB Capital Trust IV
Dated as of March 25, 2004
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Definitions..............................................................................1
ARTICLE II
ORGANIZATION
Section 2.1. Name.....................................................................................9
Section 2.2. Office...................................................................................9
Section 2.3. Purpose..................................................................................9
Section 2.4. Authority................................................................................9
Section 2.5. Title to Property of the Trust..........................................................10
Section 2.6. Powers and Duties of the Trustees and the Administrators................................10
Section 2.7. Prohibition of Actions by the Trust and the Trustees....................................15
Section 2.8. Powers and Duties of the Institutional Trustee..........................................15
Section 2.9. Certain Duties and Responsibilities of the Trustees and the Administrators..............17
Section 2.10. Certain Rights of Institutional Trustee.................................................19
Section 2.11. Delaware Trustee........................................................................21
Section 2.12. Execution of Documents..................................................................21
Section 2.13. Not Responsible for Recitals or Issuance of Securities..................................21
Section 2.14. Duration of Trust.......................................................................22
Section 2.15. Mergers.................................................................................22
ARTICLE III
SPONSOR
Section 3.1. Sponsor's Purchase of Common Securities.................................................24
Section 3.2. Responsibilities of the Sponsor.........................................................24
ARTICLE IV
TRUSTEES AND ADMINISTRATORS
Section 4.1. Number of Trustees......................................................................24
Section 4.2. Delaware Trustee........................................................................24
Section 4.3. Institutional Trustee; Eligibility......................................................25
Section 4.4. Administrators..........................................................................25
Section 4.5. Appointment, Removal and Resignation of the Trustees and the Administrators.............26
Section 4.6. Vacancies Among Trustees................................................................27
Section 4.7. Effect of Vacancies.....................................................................28
Section 4.8. Meetings of the Trustees and the Administrators.........................................28
Section 4.9. Delegation of Power.....................................................................28
Section 4.10. Merger, Conversion, Consolidation or Succession to Business.............................28
ARTICLE V
DISTRIBUTIONS
Section 5.1. Distributions...........................................................................29
ARTICLE VI
ISSUANCE OF SECURITIES
Section 6.1. General Provisions Regarding Securities.................................................29
Section 6.2. Paying Agent, Transfer Agent, Calculation Agent and Registrar...........................30
Section 6.3. Form and Dating.........................................................................31
Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates.......................................31
Section 6.5. Temporary Certificates..................................................................32
Section 6.6. Cancellation............................................................................32
Section 6.7. Rights of Holders; Waivers of Past Defaults.............................................32
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
Section 7.1. Dissolution and Termination of Trust....................................................34
ARTICLE VIII
TRANSFER OF INTERESTS
Section 8.1. General.................................................................................35
Section 8.2. Transfer Procedures and Restrictions....................................................36
Section 8.3. Deemed Security Holders.................................................................39
Section 8.4. Transfer of Initial Securities..........................................................39
ARTICLE IX
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 9.1. Liability...............................................................................40
Section 9.2. Exculpation.............................................................................40
Section 9.3. Fiduciary Duty..........................................................................41
Section 9.4. Indemnification.........................................................................41
Section 9.5. Outside Businesses......................................................................44
Section 9.6. Compensation; Fee.......................................................................45
ARTICLE X
ACCOUNTING
Section 10.1. Fiscal Year.............................................................................45
Section 10.2. Certain Accounting Matters..............................................................45
Section 10.3. Banking.................................................................................46
Section 10.4. Withholding.............................................................................46
ii
ARTICLE XI
AMENDMENTS AND MEETINGS
Section 11.1. Amendments..............................................................................47
Section 11.2. Meetings of the Holders of the Securities; Action by Written Consent....................49
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
Section 12.1. Representations and Warranties of Institutional Trustee.................................50
Section 12.2. Representations and Warranties of Delaware Trustee......................................51
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Notices.................................................................................52
Section 13.2. Governing Law...........................................................................53
Section 13.3. Submission to Jurisdiction..............................................................53
Section 13.4. Intention of the Parties................................................................53
Section 13.5. Headings................................................................................53
Section 13.6. Successors and Assigns..................................................................53
Section 13.7. Partial Enforceability..................................................................54
Section 13.8. Counterparts............................................................................54
ANNEXES AND EXHIBITS
ANNEX I Terms of Capital Securities and Common Securities
EXHIBIT A-1 Form of Capital Security Certificate
EXHIBIT A-2 Form of Common Security Certificate
EXHIBIT B Form of Transferee Certificate to be Executed by Accredited Investors
EXHIBIT C Form of Transferor Certificate to be Executed for QIBs
EXHIBIT D Form of Transferee Certificate to be Executed by Non-U.S. Persons
iii
AMENDED AND RESTATED DECLARATION OF TRUST
OF
NPB Capital Trust IV
March 25, 2004
AMENDED AND RESTATED DECLARATION OF TRUST (as amended or supplemented from
time to time in accordance with the terms hereof, this "Declaration"), dated and
effective as of March 25, 2004, by the Trustees (as defined herein), the
Administrators (as defined herein), the Sponsor (as defined herein) and 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 Declaration.
WHEREAS, certain of the Trustees and the Sponsor established NPB Capital
Trust IV (the "Trust"), a statutory trust under the Statutory Trust Act (as
defined herein), pursuant to a Declaration of Trust, dated as of ____________
(the "Original Declaration"), and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on ____________, for the sole
purpose of issuing and selling the Securities (as defined herein) representing
undivided beneficial interests in the assets of the Trust, investing the
proceeds thereof in the Debentures (as defined herein) of the Debenture Issuer
(as defined herein) and engaging in those activities necessary, advisable or
incidental thereto;
WHEREAS, as of the date hereof, no interests in the assets of the Trust
have been issued; and
WHEREAS, all of the Trustees, the Administrators and the Sponsor, by this
Declaration, 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
Declaration constitutes the governing instrument of such statutory trust, and
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, subject to the provisions
of this Declaration, and, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties, intending to be legally bound hereby, amend and
restate in its entirety the Original Declaration and agree as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above or elsewhere herein have the respective meanings assigned to them
in this Section 1.1 or, if not defined in this Section 1.1 or elsewhere herein,
in the Indenture;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration and each Annex and Exhibit hereto, as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and Sections and Annexes
and Exhibits are to Articles and Sections of and Annexes and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act (as defined herein) has the
same meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Additional Amounts" has the meaning set forth in Section 3.06 of the
Indenture.
"Administrative Action" has the meaning set forth in paragraph 4(a) of
Annex I.
"Administrators" means each of Gary L. Rhoads and Sandra L. Spayd, solely
in such Person's capacity as Administrator of the Trust continued hereunder 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 under
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 enters 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
appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of such Person or for any substantial part of its property, or
orders the winding-up or liquidation of its affairs, and such decree,
appointment or order remains unstayed and in effect for a period of 90
consecutive days; or
(b) such Person commences a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, consents to the
entry of an order for relief in an involuntary case under any such law, or
consents to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of such
Person or of any substantial part of its property, or makes any general
assignment for the benefit of creditors, or fails generally to pay its debts as
they become due.
2
"Business Day" means any day other than Saturday, Sunday or any other day
on which banking institutions in Wilmington, Delaware, The City of New York or
Harrisburg, Pennsylvania are permitted or required by law or executive order to
close.
"Calculation Agent" has the meaning set forth in Section 1.01 of the
Indenture.
"Capital Securities" has the meaning set forth in Section 6.1(a).
"Capital Security Certificate" means a definitive Certificate registered in
the name of the Holder representing a Capital Security substantially in the form
of Exhibit A-1.
"Capital Treatment Event" has the meaning set forth in paragraph 4(a) of
Annex I.
"Certificate" means any certificate evidencing Securities.
"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended and restated from time to time.
"Closing Date" has the meaning set forth in the Placement Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission.
"Common Securities" has the meaning set forth in Section 6.1(a).
"Common Security Certificate" means a definitive Certificate registered in
the name of the Holder 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 at any particular time its corporate trust business shall be principally
administered, which at all times shall be located within the United States and
at the time of execution of this Declaration shall be Rodney Square North, 1100
North Market Street, Wilmington, DE 19890-0001, Attention: Corporate Trust
Administration.
"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 the Trust or
the Trust's Affiliates or (b) any Holder of Securities.
3
"Debenture Issuer" means National Penn Bancshares, Inc., a bank holding
company incorporated in the Commonwealth of Pennsylvania, in its capacity as
issuer of the Debentures under the Indenture, and any permitted successor under
the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the Floating Rate Junior Subordinated Debt Securities
due 2034 to be issued by the Debenture Issuer under the Indenture.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Deferred Interest" means any interest on the Debentures that would have
been overdue and unpaid for more than one Distribution Payment Date but for the
imposition of an Extension Period, and the interest that shall accrue (to the
extent that the payment of such interest is legally enforceable) on such
interest at the Coupon Rate applicable during such Extension Period, compounded
quarterly from the date on which such Deferred Interest would otherwise have
been due and payable until paid or made available for payment.
"Definitive Capital Securities" means any Capital Securities in definitive
form issued by the Trust.
"Delaware Trustee" has the meaning set forth in Section 4.2.
"Direct Action" has the meaning set forth in Section 2.8(e).
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 5.1.
"Distribution Payment Date" has the meaning set forth in paragraph 2(e) of
Annex I.
"Distribution Period" has the meaning set forth in paragraph 2(a) of Annex
I.
"Event of Default" means the occurrence of an Indenture Event of Default.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Extension Period" has the meaning set forth in paragraph 2(e) of Annex I.
"Federal Reserve" has the meaning set forth in paragraph 3 of Annex I.
"Fiduciary Indemnified Person" shall mean each of the Institutional Trustee
(including in its individual capacity), the Delaware Trustee (including in its
individual capacity), any Affiliate of the Institutional Trustee or the Delaware
Trustee, and any officers, directors, shareholders, members, partners,
4
employees, representatives, custodians, nominees or agents of the Institutional
Trustee or the Delaware Trustee.
"Fiscal Year" has the meaning set forth in Section 10.1
"Guarantee" means the Guarantee Agreement, dated as of the Closing Date, of
the Sponsor (the "Guarantor") in respect of the Capital Securities.
"Holder" means a Person in whose name a Certificate representing a Security
is registered on the Securities Register maintained by or on behalf of the
Registrar, 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.
"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.
"Indenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 4.3.
"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.
"Legal Action" has the meaning set forth in Section 2.8(e).
"LIBOR" means the London Interbank Offered Rate for three-month U.S. Dollar
deposits in Europe as determined by the Calculation Agent according to paragraph
2(b) of Annex I.
"LIBOR Banking Day" has the meaning set forth in paragraph 2(b)(1) of Annex
I.
"LIBOR Business Day" has the meaning set forth in paragraph 2(b)(1) of
Annex I.
"LIBOR Determination Date" has the meaning set forth in paragraph 2(b)(1)
of Annex I.
"Liquidation" has the meaning set forth in paragraph 3 of Annex I.
5
"Liquidation Distribution" has the meaning set forth in paragraph 3 of
Annex I.
"Majority in liquidation amount of the Securities" means Holders of
outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital 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 amount that
would be paid upon the redemption, liquidation or otherwise on the date upon
which the voting percentages are determined, plus unpaid Distributions accrued
thereon to such date) of all outstanding Securities of the relevant class.
"Maturity Date" has the meaning set forth in paragraph 4(a) of Annex I.
"Maturity Redemption Price" has the meaning set forth in paragraph 4(a) of
Annex I.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Authorized Officers of such Person or, in the case of a natural
Person, such Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Declaration shall
include:
(a) a statement that each Authorized Officer or Person, as the case may be,
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 Authorized Officer or Person, as the case may
be, in rendering the Officers' Certificate;
(c) a statement that each Authorized Officer or Person, as the case may be,
has made such examination or investigation as, in his or her opinion, is
necessary to enable such Authorized Officer or Person, as the case may be, 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 Authorized Officer or
Person, as the case may be, such condition or covenant has been complied with.
"Optional Redemption Date" has the meaning set forth in paragraph 4(a) of
Annex I.
"Optional Redemption Price" has the meaning set forth in paragraph 4(a) of
Annex I.
"Paying Agent" has the meaning set forth in Section 6.2.
"Payment Amount" has the meaning set forth in Section 5.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
6
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Placement Agreement" means the Placement Agreement relating to the offer
and sale of Capital Securities.
"PORTAL" has the meaning set forth in Section 2.6(a)(i).
"Property Account" has the meaning set forth in Section 2.8(c).
"Pro Rata" has the meaning set forth in paragraph 8 of Annex I.
"Purchaser" has the meaning set forth in the Placement Agreement.
"QIB" means a "qualified institutional buyer" as defined under Rule 144A.
"Quorum" means a majority of the Administrators or, if there are only two
Administrators, both of them.
"Redemption/Distribution Notice" has the meaning set forth in paragraph
4(e) of Annex I.
"Reference Banks" has the meaning set forth in paragraph 2(b)(2) of Annex
I.
"Registrar" has the meaning set forth in Section 6.2.
"Relevant Trustee" has the meaning set forth in Section 4.5(a).
"Resale Restriction Termination Date" means, with respect to any Capital
Security, the date which is the later of (i) two years (or such shorter period
of time as permitted by Rule 144(k) under the Securities Act) after the later of
(y) the date of original issuance of such Capital Security and (z) the last date
on which the Trust or any Affiliate of the Trust was the Holder of such Capital
Security (or any predecessor thereto) and (ii) such later date, if any, as may
be required by any subsequent change in applicable law.
"Responsible Officer" means, with respect to the Institutional Trustee, any
officer within the Corporate Trust Office of the Institutional Trustee with
direct responsibility for the administration of this Declaration, including any
vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or other
officer of the Corporate Trust Office of the Institutional Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restricted Securities Legend" has the meaning set forth in Section 8.2(c).
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
7
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
"Securities" means the Common Securities and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Register" has the meaning set forth in Section 6.2(a).
"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 National Penn Bancshares, Inc., a bank holding company that
is incorporated in the Commonwealth of Pennsylvania, or any permitted successor
of the Debenture Issuer under the Indenture, in its capacity as sponsor of the
Trust.
"Statutory Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Successor Delaware Trustee" has the meaning set forth in Section 4.5(e).
"Successor Entity" has the meaning set forth in Section 2.15(b).
"Successor Institutional Trustee" has the meaning set forth in Section
4.5(b).
"Successor Securities" has the meaning set forth in Section 2.15(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.
"Telerate Page 3750" has the meaning set forth in paragraph 2(b)(1) of
Annex I.
"10% in liquidation amount of the Securities" means Holders of outstanding
Securities voting together as a single class or, as the context may require,
Holders of outstanding Capital Securities or Holders of outstanding Common
Securities voting separately as a class, who are the record owners of 10% or
more of the aggregate liquidation amount (including the stated amount that would
be paid upon the redemption, liquidation or otherwise on the date upon which the
voting percentages are determined, plus unpaid Distributions accrued thereon to
such date) of all outstanding Securities of the relevant class.
"Transfer Agent" has the meaning set forth in Section 6.2.
8
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time-to-time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and references herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
"Trust 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 Institutional Trustee pursuant to the trusts of this Declaration.
"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 "NPB Capital Trust IV," as such name
may be modified from time to time by the Administrators following written notice
to the Institutional Trustee and 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 principal office of the Trust,
which shall be in a state of the United States or the District of Columbia, is
P.O. Box 547, Boyertown, Pennsylvania 19512. On ten Business Days' written
notice to the Institutional Trustee and the Holders of the Securities, the
Administrators may designate another principal office, which shall be in a state
of the United States or 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 in
the Debentures and (c) except as otherwise limited herein, to engage in only
those other activities deemed necessary, advisable or incidental thereto by the
Institutional Trustee, including, without limitation, those activities specified
in this Declaration. 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
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
9
on behalf of the Trust and in accordance with such Trustee's powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration. 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 Institutional 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.
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 Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have 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 Declaration. Subject to the
limitations set forth in paragraph (b) of this Section, and in accordance with
the following provisions (i) and (ii), the Administrators and, at the direction
of the Administrators, the Trustees, shall have the authority to enter into all
transactions and agreements determined by the Administrators to be appropriate
in exercising the authority, express or implied, otherwise granted to the
Trustees or the Administrators, as the case may be, under this Declaration, and
to perform all acts in furtherance thereof, including without limitation, the
following:
(i) Each Administrator shall have the power, duty and authority, and
is hereby authorized, 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, deliver and
perform on behalf of the Trust, such agreements as may be necessary or
desirable in connection with the purposes and function of the Trust,
including agreements with the Paying Agent, a subscription agreement
for Debentures between the Trust and the Sponsor, a subscription
agreement for Capital Securities between the Trust and the Purchaser
of the Capital Securities and a subscription agreement for Common
Securities between the Trust and the Sponsor;
(C) ensuring compliance with the Securities Act and applicable
securities or blue sky laws of states and other jurisdictions;
(D) if and at such time determined solely by the Sponsor at the
request of the Holders, assisting in the designation of the Capital
10
Securities for trading in the Private Offering, Resales and Trading
through the Automatic Linkages ("PORTAL") system if available;
(E) 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 Declaration, including notice of any
notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest
payment period under the Indenture;
(F) the appointment of a Paying Agent, Transfer Agent and
Registrar in accordance with this Declaration;
(G) execution and delivery of the Securities in accordance with
this Declaration;
(H) execution and delivery of closing certificates pursuant to
the Placement Agreement and the application for a taxpayer
identification number;
(I) unless otherwise determined by the Holders of a Majority in
liquidation amount of the Securities or as 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
Declaration;
(J) the taking of any action as the Sponsor or an Administrator
may from time to time determine is necessary, advisable or incidental
to the foregoing to give effect to the terms of this Declaration for
the benefit of the Holders (without consideration of the effect of any
such action on any particular Holder);
(K) 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 Capital Securities and Holders of
Common Securities as to such actions and applicable record dates;
(L) to duly prepare and file on behalf of the Trust all
applicable tax returns and tax information reports that are required
to be filed with respect to the Trust;
(M) to negotiate the terms of, and the execution and delivery of,
the Placement Agreement and any other related agreements providing the
sale of the Capital Securities or the resale thereof by the Purchaser;
(N) to employ or otherwise engage employees, agents (who may be
designated as officers with titles), managers, contractors, advisors,
11
attorneys and consultants and pay reasonable compensation for such
services;
(O) to incur expenses that are necessary, advisable or incidental
to carry out any of the purposes of the Trust;
(P) to give the certificate required by ss. 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate
may be executed by an Administrator; and
(Q) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory trust under the laws
of each jurisdiction (other than the State of Delaware) in which such
existence is necessary to protect the limited liability of the Holders
of the Capital Securities or to enable the Trust to effect the
purposes for which the Trust was created.
(ii) As among the Trustees and the Administrators, the Institutional
Trustee shall have the power, duty and authority, and is hereby authorized,
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 Declaration;
(G) the distribution of the Trust Property in accordance with the
terms of this Declaration;
(H) to the extent provided in this Declaration, 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 State of the State of Delaware;
12
(I) after any Event of Default (of which the Institutional
Trustee has knowledge (as provided in Section 2.10(m) hereof))
(provided, that such Event of Default is not by or with respect to the
Institutional Trustee), the taking of any action that the
Institutional Trustee may from time to time determine is necessary,
advisable or incidental for the foregoing to give effect to the terms
of this Declaration and protect and conserve the Trust Property for
the benefit of the Holders (without consideration of the effect of any
such action on any particular Holder);
(J) to take all action that may be necessary or appropriate 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 to protect the limited liability of the
Holders of the Capital Securities or to enable the Trust to effect the
purposes for which the Trust was created; and
(K) to undertake any actions set forth in ss. 317(a) of the Trust
Indenture Act.
(iii) The Institutional Trustee shall have the power and authority,
and is hereby authorized, 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)(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 Institutional Trustee, the action of
the Institutional Trustee shall prevail.
(b) So long as this Declaration remains in effect, the Trust (or the
Trustees 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 Trustees nor the Administrators
may cause the Trust to (i) acquire any investments or engage in any activities
not authorized by this Declaration, (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 cause (or in the case of the Institutional
Trustee, to the actual knowledge of a Responsible Officer would cause) the Trust
to fail or cease to qualify as a grantor trust for United States federal income
tax purposes, (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 Institutional Trustee shall, at the
sole cost and expense of the Trust subject to reimbursement under Section
9.6(a), 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 Capital 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
13
the Sponsor in furtherance of the following prior to the date of this
Declaration 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 jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the
Capital 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
advisement of and direction to the Trustees 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 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 jurisdictions in connection with the sale of
the Capital Securities; and
(iii) 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,
the Institutional Trustee 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 (i) the Trust will not be deemed to be an
Investment Company required to be registered under the Investment Company Act
(in the case of the Institutional Trustee, to the actual knowledge of a
Responsible Officer), and (ii) the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes (in the case of the
Institutional Trustee, to the actual knowledge of a Responsible Officer) and
(iii) the Trust will 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 the case of the Institutional Trustee, to the actual
knowledge of a Responsible Officer). In this connection, the Institutional
Trustee, 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 or this Declaration, as amended from time to time, that
each of the Institutional Trustee, the Administrators and such Holders determine
in their discretion to be necessary or desirable for such purposes, even if such
action adversely affects the interests of the Holders of the Capital Securities.
(e) All expenses incurred by the Administrators or the Trustees pursuant to
this Section 2.6 shall be reimbursed by the Sponsor, and the Trustees 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
Institutional Trustee (in its capacity as such) and shall be held and
administered by the Institutional Trustee for the benefit of the Trust in
accordance with this Declaration.
(h) If the Institutional Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Declaration and such
proceeding has been discontinued or abandoned for any reason, or has been
14
determined adversely to the Institutional Trustee or to such Holder, then and in
every such case the Sponsor, the Institutional 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 Institutional 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 Trustees.
The Trust shall not, and the Institutional Trustee and the Administrators
shall not, and the Administrators shall cause the Trust not to, engage in any
activity other than as required or authorized by this Declaration. In
particular, the Trust shall not, and the Institutional Trustee and the
Administrators shall not cause the Trust to:
(a) 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 Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust Property for other than a Trust purpose;
(d) make any loans or incur any indebtedness other than loans represented
by the Debentures;
(e) possess any power or otherwise act in such a way as to vary the Trust
Property or the terms of the Securities;
(f) issue any securities or other evidences of beneficial ownership of, or
beneficial interest in, the Trust other than the Securities; or
(g) other than as provided in this Declaration (including Annex I), (i)
direct the time, method and place of exercising any trust or power conferred
upon the Debenture Trustee with respect to the Debentures, (ii) waive any past
default that is waivable under the Indenture, (iii) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable, or (iv) 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
experienced in such matters to the effect that such amendment, modification or
termination 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 Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Trust.
The right, title and interest of the Institutional Trustee to the Debentures
shall vest automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 4.5. Such vesting and cessation
of title shall be effective whether or not conveyancing documents with regard to
the Debentures have been executed and delivered.
15
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Administrators or to the Delaware Trustee.
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Account") in the United States (as defined in
Treasury Regulationsss.301.7701-7), in the name of and under the exclusive
control of the Institutional Trustee, and maintained in the Institutional
Trustee's trust department, on behalf of the Holders of the Securities and,
upon the receipt of payments of funds made in respect of the Debentures
held by the Institutional Trustee, deposit such funds into the Property
Account and make payments to the Holders of the Capital 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 Declaration;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Capital Securities and the
Common Securities to the extent the Debentures are redeemed or mature; and
(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 the
circumstances specified therefor under the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional 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 (a "Legal Action") which arise
out of or in connection with an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
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 premium, if any, on or principal of the Debentures on the date such
interest, premium, if any, or principal is otherwise payable (or in the case of
redemption, on the date of redemption), then a Holder of the Capital Securities
may directly institute a proceeding for enforcement of payment to such Holder of
the principal of or premium, if any, or interest on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such Holder (a "Direct Action") on or after the respective due
date 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 Capital Securities to the extent of any payment made by
the Debenture Issuer to such Holder of the Capital Securities in such Direct
Action; provided, however, that a Holder of the Common Securities may exercise
such right of subrogation only if no Event of Default with respect to the
Capital Securities has occurred and is continuing.
16
(f) The Institutional 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 Declaration (including Annex I); or
(ii) a Successor Institutional Trustee has been appointed and has
accepted that appointment in accordance with Section 4.5.
(g) The Institutional 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
Institutional 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 Declaration (including Annex I) and the terms of the
Securities.
(h) The Institutional 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 Institutional 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 Trustees and the
Administrators.
(a) The Institutional Trustee, before the occurrence of any Event of
Default (of which the Institutional Trustee has knowledge (as provided in
Section 2.10(m) hereof)) and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default (of
which the Institutional Trustee has knowledge (as provided in Section 2.10(m)
hereof)), has occurred (that has not been cured or waived pursuant to Section
6.7), the Institutional Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) The duties and responsibilities of the Trustees and the Administrators
shall be as provided by this Declaration and, in the case of the Institutional
Trustee, by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Declaration shall require any Trustee or Administrator to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity satisfactory to it against such risk or liability is not
reasonably assured to it. Whether or not therein expressly so provided, every
provision of this Declaration relating to the conduct or affecting the liability
of or affording protection to the Trustees or the Administrators shall be
subject to the provisions of this Article. Nothing in this Declaration shall be
construed to release a Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct or bad faith.
Nothing in this Declaration shall be construed to release an Administrator from
liability for its own gross negligent action, its own gross negligent failure to
17
act, or its own willful misconduct or bad faith. To the extent that, at law or
in equity, a Trustee or an Administrator has duties and liabilities relating to
the Trust or to the Holders, such Trustee or Administrator shall not be liable
to the Trust or to any Holder for such Trustee's or Administrator's good faith
reliance on the provisions of this Declaration. The provisions of this
Declaration, to the extent that they restrict the duties and liabilities of the
Administrators or the Trustees 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 Trustees.
(c) All payments made by the Institutional 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 the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Institutional 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 Trustees 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 Trustees expressly set
forth elsewhere in this Declaration or, in the case of the Institutional
Trustee, in the Trust Indenture Act.
(d) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct or bad faith with
respect to matters that are within the authority of the Institutional Trustee
under this Declaration, except that:
(i) the Institutional Trustee shall not be liable for any error or
judgment made in good faith by an Authorized Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(ii) the Institutional 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 a Majority in liquidation amount of the
Capital Securities or the Common Securities, as applicable, relating to the
time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iii) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar manner as
the Institutional Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Institutional Trustee under this Declaration and the Trust Indenture Act;
(iv) the Institutional Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree in writing with
18
the Sponsor; and money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the Property
Account maintained by the Institutional Trustee pursuant to Section
2.8(c)(i) and except to the extent otherwise required by law; and
(v) the Institutional Trustee shall not be responsible for monitoring
the compliance by the Administrators or the Sponsor with their respective
duties under this Declaration, nor shall the Institutional Trustee be
liable for any default or misconduct of the Administrators or the Sponsor.
Section 2.10. Certain Rights of Institutional Trustee. Subject to the
provisions of Section 2.9:
(a) the Institutional Trustee may conclusively rely and shall fully be
protected in acting or refraining from acting in good faith upon any resolution,
written 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, 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 Declaration, the
Institutional Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Declaration, the
Institutional Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of the
application of any provision of this Declaration, then, except as to any matter
as to which the Holders of Capital Securities are entitled to vote under the
terms of this Declaration, the Institutional Trustee may deliver a notice to the
Sponsor requesting the Sponsor's opinion as to the course of action to be taken
and the Institutional Trustee shall take such action, or refrain from taking
such action, as the Institutional Trustee in its sole discretion shall deem
advisable and in the best interests of the Holders, in which event the
Institutional Trustee shall have no liability except for its own negligence,
willful misconduct or bad faith;
(c) any direction or act of the Sponsor or the Administrators contemplated
by this Declaration shall be sufficiently evidenced by an Officers' Certificate;
(d) whenever in the administration of this Declaration, the Institutional
Trustee shall deem it desirable that a matter be proved or established before
undertaking, suffering or omitting any action hereunder, the Institutional
Trustee (unless other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be promptly
delivered by the Sponsor or the Administrators;
(e) the Institutional 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;
19
(f) the Institutional 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
Institutional Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of competent
jurisdiction;
(g) the Institutional Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any of the Holders pursuant to this Declaration, unless such
Holders shall have offered to the Institutional 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
Institutional Trustee, upon the occurrence of an Event of Default (of which the
Institutional Trustee has knowledge (as provided in Section 2.10(m) hereof))
that has not been cured or waived, of its obligation to exercise the rights and
powers vested in it by this Declaration;
(h) the Institutional 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
Institutional Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;
(i) the Institutional 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 Institutional 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 Declaration the Institutional
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Institutional Trustee (i) may request instructions from the Holders of the
Common Securities and the Capital Securities, which instructions may be given
only by the Holders of the same proportion in liquidation amount of the Common
Securities and the Capital Securities as would be entitled to direct the
Institutional Trustee under the terms of the Common Securities and the Capital
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 Declaration, the
Institutional Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration;
(l) when the Institutional 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
20
constitute expenses of administration under any bankruptcy law or law relating
to creditors rights generally;
(m) the Institutional Trustee shall not be charged with knowledge of an
Event of Default unless a Responsible Officer of the Institutional Trustee has
actual knowledge of such event or the Institutional Trustee receives written
notice of such event from any Holder, except that the Institutional Trustee
shall be deemed to have knowledge of any Event of Default pursuant to Sections
5.01(a) or 5.01(b) of the Indenture (other than an Event of Default resulting
from the default in the payment of Additional Amounts if the Institutional
Trustee does not have actual knowledge or written notice that such payment is
due and payable);
(n) any action taken by the Institutional Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature of the
Institutional 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 Institutional Trustee to so act or as to its compliance
with any of the terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Institutional Trustee's or its agent's taking such
action; and
(o) no provision of this Declaration shall be deemed to impose any duty or
obligation on the Institutional 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 Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation, and no permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
Section 2.11. Delaware Trustee. Notwithstanding any other provision of this
Declaration other than Section 4.2, the Delaware Trustee shall not be entitled
to exercise any powers, and the Delaware Trustee shall not have any of the
duties and responsibilities of any of the Trustees or the Administrators
specified in this Declaration (except as may be required under the Statutory
Trust Act). Except as set forth in Section 4.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of ss.
3807 of the Statutory Trust Act.
Section 2.12. Execution of Documents. Unless otherwise determined in
writing by the Institutional Trustee, and except as otherwise required by the
Statutory Trust Act, the Institutional Trustee, or any one or more of the
Administrators, as the case may be, is authorized to execute and deliver on
behalf of the Trust any documents, agreements, instruments or certificates that
the Trustees or the Administrators, as the case may be, have the power and
authority to execute pursuant to Section 2.6.
Section 2.13. Not Responsible for Recitals or Issuance of Securities. The
recitals contained in this Declaration and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the Trust Property or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration, the
Debentures or the Securities.
21
Section 2.14. Duration of Trust. The Trust, unless dissolved pursuant to
the provisions of Article VII hereof, shall have existence for five (5) years
after the Maturity Date.
Section 2.15. 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 Person, except
as described in this Section 2.15 and except with respect to the distribution of
Debentures to Holders of Securities pursuant to Section 7.1(a)(iv) of this
Declaration or Section 4 of Annex I.
(b) The Trust may, with the consent of the Administrators (which consent
will not be unreasonably withheld) and without the consent of the Institutional
Trustee, the Delaware Trustee or the Holders of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to a trust organized as such under the laws of any state; provided,
that:
(i) if the Trust is not the survivor, 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, as the holder of the Debentures,
a trustee of the Successor Entity that possesses the same powers and duties
as the Institutional Trustee;
(iii) the Capital Securities or any Successor Securities are listed or
quoted, or any Successor Securities will be listed or quoted upon
notification of issuance, on any national securities exchange or with
another organization on which the Capital Securities are then listed or
quoted, if any;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the rating on the Capital
Securities or any Successor Securities to be downgraded or withdrawn by any
nationally recognized statistical rating organization, if the Capital
Securities are then rated;
(v) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the Holders of the Securities or any Successor Securities in
any material respect (other than with respect to any dilution of such
Holders' interests in the Successor Entity);
22
(vi) such Successor Entity, if any, has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Trust has received a written opinion of
a nationally recognized independent counsel to the Trust experienced in
such matters to the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Securities or any
Successor Securities in any material respect (other than with respect
to any dilution of such Holders' interests in the Successor Entity);
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an Investment Company
under the Investment Company Act; and
(C) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Trust or the Successor
Entity will continue to be classified as a grantor trust for United
States federal income tax purposes;
(viii) the Sponsor guarantees the obligations of the Successor Entity
under the Successor Securities to the same extent provided by the
Indenture, the Guarantee, the Debentures and this Declaration; and
(ix) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Institutional Trustee shall have
received an Officers' Certificate of the Administrators and an opinion of
counsel, each to the effect that all conditions precedent of this paragraph
(b) to such transaction have been satisfied.
(c) Notwithstanding Section 2.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to, any
other Person or permit any other Person to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or Successor Entity to be
classified as other than a grantor trust for United States federal income tax
purposes.
ARTICLE III
SPONSOR
23
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 Capital Securities are sold.
Section 3.2. Responsibilities of the Sponsor. In connection with the issue
and sale of the Capital Securities, the Sponsor shall have the exclusive right
and responsibility and sole decision to engage in, or direct the Administrators
to engage in, the following activities:
(a) to determine the jurisdictions in which to take appropriate action to
qualify or register for sale all or part of the Capital 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, advisable or incidental thereto in order to comply with the
applicable laws of any such jurisdictions;
(b) to prepare for filing and request the Administrators to cause the
filing by the Trust, as may be appropriate, of an application to the PORTAL
system, for listing or quotation upon notice of issuance of any Capital
Securities, as requested by the Holders of not less than a Majority in
liquidation amount of the Capital Securities; and
(c) to negotiate the terms of and/or execute and deliver on behalf of the
Trust, the Placement Agreement and other related agreements providing for the
sale of the Capital Securities or the resale thereof by the Purchaser.
ARTICLE IV
TRUSTEES AND ADMINISTRATORS
Section 4.1. Number of Trustees. The number of Trustees initially shall be
two, and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holder of a Majority in liquidation amount
of the Common Securities voting as a class at a meeting of the Holder of the
Common Securities; provided, however, that there shall be a Delaware Trustee if
required by Section 4.2; and there shall always be one Trustee who shall be the
Institutional Trustee, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements, in which case Section 2.11 shall have no
application to such entity in its capacity as Institutional Trustee.
Section 4.2. Delaware Trustee. If required by the Statutory Trust Act, one
Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware and a U.S.
Person at least 21 years of age; or
24
(b) if not a natural person, an entity which is organized under the laws of
the United States or any state thereof or the District of Columbia, has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, including ss.3807 of the Statutory Trust Act.
The initial Delaware Trustee shall be Wilmington Trust Company.
Section 4.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee that shall act as Institutional
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 national association organized and
doing business under the laws of the United States of America or any state
thereof or of the District of Columbia and authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of
at least fifty million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state or District of Columbia
authority. If such corporation or national association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
supervising or examining authority referred to above, then for the purposes
of this Section 4.3(a)(iii), the combined capital and surplus of such
corporation or national association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall cease to be eligible to
so act under Section 4.3(a), the Institutional Trustee shall immediately resign
in the manner and with the effect set forth in Section 4.5.
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee shall either eliminate such interest or resign, to the
extent and in the manner provided by, and subject to this Declaration.
(d) The initial Institutional Trustee shall be Wilmington Trust Company.
Section 4.4. Administrators. Each Administrator shall be a U.S. Person.
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 Declaration 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 acting alone.
25
Section 4.5. Appointment, Removal and Resignation of the Trustees and the
Administrators.
(a) No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of this Section.
(b) Subject to Section 4.5(a), a Relevant Trustee may resign at any time by
giving written notice thereof to the Holders of the Securities and by appointing
a successor Relevant Trustee. Upon the resignation of the Institutional Trustee,
the Institutional Trustee shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements their expenses and charges to
serve as the successor Institutional Trustee on a form provided by the
Administrators, and selecting the Person who agrees to the lowest expense and
charges (the "Successor Institutional Trustee"). If the instrument of acceptance
by the successor Relevant Trustee required by this Section shall not have been
delivered to the Relevant Trustee within 60 days after the giving of such notice
of resignation or delivery of the instrument of removal, the Relevant 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
Relevant Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Relevant Trustee. The Institutional
Trustee shall have no liability for the selection of such successor pursuant to
this Section.
(c) Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by an act of the Holders of a Majority in
liquidation amount of the Common Securities. If any Trustee shall be so removed,
the Holders of the Common Securities, by act of the Holders of a Majority in
liquidation amount of the Common Securities delivered to the Relevant Trustee,
shall promptly appoint a successor Relevant Trustee, and such successor Relevant
Trustee shall comply with the applicable requirements of this Section. If an
Event of Default shall have occurred and be continuing, the Institutional
Trustee or the Delaware Trustee, or both of them, may be removed by the act of
the Holders of a Majority in liquidation amount of the Capital Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust). If any Trustee shall be so removed, the Holders of Capital
Securities, by act of the Holders of a Majority in liquidation amount of the
Capital Securities then outstanding delivered to the Relevant Trustee, shall
promptly appoint a successor Relevant Trustee or Trustees, and such successor
Relevant Trustee shall comply with the applicable requirements of this Section.
If no successor Relevant Trustee shall have been so appointed by the Holders of
a Majority in liquidation amount of the Capital Securities and accepted
appointment in the manner required by this Section within 30 days after delivery
of an instrument of removal, the Relevant Trustee or any Holder who has been a
Holder of the Securities for at least six 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 a successor
Relevant Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a successor Relevant Trustee or Trustees.
(d) The Institutional Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Holders and to the Sponsor. Each notice shall include the name of the successor
26
Relevant Trustee and the address of its Corporate Trust Office if it is the
Institutional Trustee.
(e) Notwithstanding the foregoing or any other provision of this
Declaration, in the event a Delaware Trustee who is a natural person dies or is
adjudged by a court to have become incompetent or incapacitated, the vacancy
created by such death, incompetence or incapacity may be filled by the
Institutional Trustee following the procedures in this Section (with the
successor being a Person who satisfies the eligibility requirement for a
Delaware Trustee set forth in this Declaration) (the "Successor Delaware
Trustee").
(f) In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Securities and the Trust and (b) shall add to or change any of the provisions of
this Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust or any successor Relevant Trustee, such retiring
Relevant Trustee shall duly assign, transfer and deliver to such successor
Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Securities and the Trust
subject to the payment of all unpaid fees, expenses and indemnities of such
retiring Relevant Trustee.
(g) No Institutional Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(h) The Holders of the Capital Securities will have no right to vote to
appoint, remove or replace the Administrators, which voting rights are vested
exclusively in the Holders of the Common Securities.
(i) Any Successor Delaware Trustee shall file an amendment to the
Certificate of Trust with the Secretary of State of the State of Delaware
identifying the name and principal place of business of such Delaware Trustee in
the State of Delaware.
Section 4.6. Vacancies Among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
4.1, or if the number of Trustees is increased pursuant to Section 4.1, a
vacancy shall occur. A resolution certifying the existence of such vacancy by
the Trustees or, if there are more than two, a majority of the Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 4.5.
27
Section 4.7. Effect of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust or terminate this Declaration. Whenever a vacancy in the number
of Trustees shall occur, until such vacancy is filled by the appointment of a
Trustee in accordance with Section 4.5, the Institutional Trustee shall have all
the powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by this Declaration.
Section 4.8. Meetings of the Trustees and the Administrators. Meetings of
the Trustees or the Administrators shall be held from time to time upon the call
of any Trustee or Administrator, as applicable. Regular meetings of the Trustees
and the Administrators, respectively, may be in person in the United States or
by telephone, at a place (if applicable) and time fixed by resolution of the
Trustees or the Administrators, as applicable. Notice of any in-person meetings
of the Trustees or 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 Trustees or 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 a Trustee or an
Administrator, as the case may be, at a meeting shall constitute a waiver of
notice of such meeting except where a 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 ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Trustees or the Administrators, as the case may be, may be taken at a
meeting by vote of a majority of the Trustees or the Administrators present
(whether in person or by telephone) and eligible to vote with respect to such
matter; provided, that, in the case of the Administrators, a Quorum is present,
or without a meeting by the unanimous written consent of the Trustees or the
Administrators, as the case may be. Meetings of the Trustees and the
Administrators together shall be held from time to time upon the call of any
Trustee or Administrator.
Section 4.9. Delegation of Power. (a) Any Trustee or any Administrator, as
the case may be, 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, instruments or
other writings contemplated in Section 2.6.
(b) The Trustees shall have power to delegate from time to time to such of
their number or to any officer of the Trust that is a U.S. Person, the doing of
such things and the execution of such instruments or other writings either in
the name of the Trust or the names of the Trustees or otherwise as the Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 4.10. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Institutional Trustee or the Delaware Trustee, as the
case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
28
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided such Person shall be otherwise qualified and eligible under this
Article and, provided, further, that such Person shall file an amendment to the
Certificate of Trust with the Secretary of State of the State of Delaware as
contemplated in Section 4.5(i).
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 Capital 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 (including
any Additional Amounts or Deferred Interest) or premium, if any, on and/or
principal of the Debentures held by the Institutional Trustee (the amount of any
such payment being a "Payment Amount"), the Institutional Trustee shall and is
directed, to the extent funds are available in the Property Account for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders. For the avoidance of doubt, funds in the Property Account shall not be
distributed to Holders to the extent of any taxes payable by the Trust, in the
case of withholding taxes, as determined by the Institutional Trustee or any
Paying Agent and, in the case of taxes other than withholding taxes, as
determined by the Administrators in a written notice to the Institutional
Trustee.
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
capital securities, evidenced by a certificate substantially in the form of
Exhibit A-1, representing undivided beneficial interests in the assets of the
Trust and having such terms as are set forth in Annex I (the "Capital
Securities"), and one series of common securities, evidenced by a certificate
substantially in the form of Exhibit A-2, representing undivided beneficial
interests in the assets of the Trust and having such terms as are set forth in
Annex I (the "Common Securities"). The Trust shall issue no securities or other
interests in the assets of the Trust other than the Capital Securities and the
Common Securities. The Capital 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 payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Capital Securities.
(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
29
of the Securities shall cease to 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. Any Certificate may be signed on behalf of the Trust by such
person who, at the actual date of execution of such Certificate, shall be an
Administrator of the Trust, although at the date of the execution and delivery
of the Declaration any such person was not such an Administrator. A Capital
Security shall not be valid until the Certificate evidencing it is authenticated
by the manual or facsimile signature of an Authorized Officer of the
Institutional Trustee. Such signature shall be conclusive evidence that the
Certificate evidencing such Capital Security has been authenticated under this
Declaration. Upon written order of the Trust signed by one Administrator, the
Institutional Trustee shall authenticate one or more Certificates evidencing the
Capital Securities for original issue. The Institutional Trustee may appoint an
authenticating agent that is a U.S. Person acceptable to the Sponsor to
authenticate Certificates evidencing Capital Securities. A Common Security need
not be so authenticated and shall be valid upon execution by one or more
Administrators.
(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 Declaration, the
Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable, and each Holder thereof shall be entitled to the benefits
provided by this Declaration.
(e) Every Person, by virtue of having become a Holder in accordance with
the terms of this Declaration, shall be deemed to have expressly assented and
agreed to the terms of, and shall be bound by, this Declaration and the
Guarantee.
Section 6.2. Paying Agent, Transfer Agent, Calculation Agent and Registrar.
(a) The Trust shall maintain in Wilmington, Delaware (i) an office or
agency where the Securities may be presented for payment (the "Paying Agent")
and (ii) an office or agency where Securities may be presented for registration
of transfer or exchange (the "Transfer Agent"). The Trust shall keep or cause to
be kept at such office or agency a register (the "Securities Register") for the
purpose of registering Securities and transfers and exchanges of Securities,
such Securities Register to be held by a registrar (the "Registrar"). The
Administrators may appoint the Paying Agent, the Registrar and the Transfer
Agent, and may appoint one or more additional Paying Agents, one or more
co-Registrars, or one or more co-Transfer Agents in such other locations as it
shall determine. The term "Paying Agent" includes any additional Paying Agent,
the term "Registrar" includes any additional Registrar or co-Registrar and the
term "Transfer Agent" includes any additional Transfer Agent or co-Transfer
Agent. The Administrators may change any Paying Agent, Transfer Agent or
Registrar at any time without prior notice to any Holder. The Administrators
shall notify the Institutional Trustee of the name and address of any Paying
Agent, Transfer Agent and Registrar not a party to this Declaration. The
Administrators hereby initially appoint the Institutional Trustee to act as
Paying Agent, Transfer Agent and Registrar for the Capital Securities and the
Common Securities at its Corporate Trust Office. The Institutional Trustee or
30
any of its Affiliates in the United States may act as Paying Agent, Transfer
Agent or Registrar.
(b) The Trust shall also appoint a Calculation Agent, which shall determine
the Coupon Rate in accordance with the terms of the Securities. The Trust
initially appoints the Institutional Trustee as Calculation Agent.
Section 6.3. Form and Dating.
(a) The Capital Securities shall be evidenced by one or more Certificates,
and the Institutional Trustee's certificate of authentication thereon shall be,
substantially in the form of Exhibit A-1, and the Common Securities shall be
evidenced by one or more Certificates substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this
Declaration. 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 their execution thereof.
Certificates evidencing 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 Institutional
Trustee in writing. Each Capital Security Certificate shall be dated the date of
its authentication. The terms and provisions of the Securities set forth in
Annex I and the forms of Certificates set forth in Exhibits A-1 and A-2 are part
of the terms of this Declaration and to the extent applicable, the Institutional
Trustee, the Delaware Trustee, the Administrators and the Sponsor, by their
execution and delivery of this Declaration, expressly agree to such terms and
provisions and to be bound thereby. Capital Securities will be issued only in
blocks having an aggregate liquidation amount of not less than $100,000.
(b) The Capital Securities are being offered and sold by the Trust
initially pursuant to the Placement Agreement in definitive form, registered in
the name of the Holder thereof, without coupons and with the Restricted
Securities Legend.
Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate 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) the related Holder shall deliver to the
Registrar, the Administrators and the Institutional Trustee such security or
indemnity as may be reasonably required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, an Administrator on behalf of the Trust shall execute
(and in the case of a Capital Security Certificate, the Institutional Trustee
shall authenticate) and deliver to such Holder, 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, the Registrar or the Administrators may require such Holder to pay
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any Certificate executed and delivered pursuant
to this Section shall constitute conclusive evidence of an ownership interest in
31
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 Certificates. Until definitive Certificates are
ready for delivery, the Administrators may prepare and execute on behalf of the
Trust and, in the case of Capital Security Certificates, the Institutional
Trustee shall authenticate, temporary Certificates. Temporary Certificates shall
be substantially in the form of definitive Certificates but may have variations
that the Administrators consider appropriate for temporary Certificates. Without
unreasonable delay, the Administrators shall prepare and execute on behalf of
the Trust and, in the case of the Capital Security Certificates, the
Institutional Trustee shall authenticate definitive Certificates in exchange for
temporary Certificates.
Section 6.6. Cancellation. The Administrators at any time may deliver
Certificates evidencing Securities to the Institutional Trustee for
cancellation. The Registrar shall forward to the Institutional Trustee any
Certificates evidencing Securities surrendered to it for registration of
transfer, redemption or payment. The Institutional Trustee shall promptly cancel
all Certificates surrendered for registration of transfer, payment, replacement
or cancellation and shall dispose of such canceled Certificates as the
Administrators direct. The Administrators may not issue new Certificates to
replace Certificates evidencing Securities that have been paid or, except for
Certificates surrendered for purposes of the transfer or exchange of the
Securities evidenced thereby, that have been delivered to the Institutional
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
Institutional 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 Declaration. The Securities shall have no, and the
issuance of the Securities shall not be subject to, preemptive or other similar
rights and when issued and delivered to Holders against payment of the purchase
price therefor, the Securities will be fully paid and nonassessable by the
Trust.
(b) For so long as any Capital 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 not less than a Majority in liquidation amount of the Capital
Securities then outstanding shall have the right to make such declaration by a
notice in writing to the Institutional Trustee, the Sponsor and the Debenture
Trustee.
(c) At any time after the acceleration of maturity of 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
Institutional Trustee, subject to the provisions hereof, fails to annul any such
acceleration and waive such default, the Holders of a Majority in liquidation
32
amount of the Capital Securities, by written notice to the Institutional
Trustee, the Sponsor and the Debenture Trustee, may rescind and annul such
acceleration and its consequences if:
(i) the Sponsor has paid or deposited with the Debenture Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all of the
Debentures;
(B) any accrued Deferred Interest on all of the Debentures;
(C) all payments on any Debentures that have become due otherwise
than by such acceleration and interest and Deferred 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, documented expenses,
disbursements and advances of the Debenture Trustee and the
Institutional Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other than
the non-payment of the principal of or premium, if any, on the Debentures
that has become due solely by such acceleration, have been cured or waived
as provided in Section 5.07 of the Indenture.
(d) The Holders of a Majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past Default or Event of Default, except a Default or Event of Default
arising from the non-payment of principal of or premium, if any, or interest on
the Debentures (unless such Default or Event of Default has been cured and a sum
sufficient to pay all matured installments of interest, premium 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.
(e) Upon receipt by the Institutional Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of any
part of the Capital Securities, a record date shall be established for
determining Holders of outstanding Capital Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Institutional 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
33
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.
(f) Except as otherwise provided in this Section, the Holders of a Majority
in liquidation amount of the Capital Securities may, on behalf of the Holders of
all the Capital Securities, waive any past Default or Event of Default and its
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 Declaration, 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 April 6, 2039, the expiration of the
term of the Trust;
(ii) 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 Declaration or the
Guarantee, as the case may be, the filing of a certificate of dissolution
or its equivalent with respect to the Sponsor 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) the distribution of all of the Debentures to the Holders of the
Securities, upon exercise of the right of the Holders of all of the
outstanding Common Securities to dissolve the Trust as provided in Annex I
hereto;
(v) the entry of a decree of judicial dissolution of any Holder of the
Common Securities, the Sponsor, the Trust or the Debenture Issuer;
(vi) when all of the Securities are then subject to 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 all
of the Trustees 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 ss.3808 of the Statutory Trust
34
Act, and subject to the terms set forth in Annex I, the Institutional Trustee
shall terminate the Trust by filing a certificate of cancellation with the
Secretary of State of the State of Delaware.
(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) Where a Holder of Capital Securities delivers to
the Registrar in accordance with this Declaration a request to register a
transfer of such Holder's Capital Securities or to exchange them for an equal
aggregate liquidation amount of Capital Securities represented by different
Certificates, the Registrar shall register the transfer or make the exchange
when the requirements specified in this Article VIII for such transfer or
exchange are met. To facilitate registrations of transfers and exchanges, the
Trust shall execute and the Institutional Trustee shall authenticate Capital
Security 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
Debenture Issuer under the Indenture may succeed to the Sponsor's ownership of
the Common Securities.
(c) Capital Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Capital Securities. To the fullest extent permitted by
applicable law, any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void and will be deemed to be
of no legal effect whatsoever and any such purported transferee shall be deemed
not to be the Holder of such Capital Securities for any purpose, including, but
not limited to, the receipt of Distributions on such Capital Securities, and
such transferee shall be deemed to have no interest whatsoever in such Capital
Securities.
(d) The Registrar shall provide in the Securities Register 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 reasonably require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon its receipt of the documents
required under this Section 8.1(d) for registration of transfer of any
Securities, the Registrar shall register in the Securities Register, in the name
of the designated transferee or transferees, the Securities being transferred
and thereupon, for all purposes of this Declaration, such transfer shall be
effective and such transferee or transferees shall be, and such transferor shall
no longer be, the Holder of the transferred Securities. Upon the registration of
transfer of a Security pursuant to the terms of this Declaration in the name of
the new Holder thereof, such Security shall constitute the same Security as the
Security so transferred and shall be entitled to the same benefits under this
Declaration as the Security so transferred. The Registrar shall, and is
authorized to, record and register in the Securities Register the transfer of a
Security upon the Registrar's receipt of originals or copies (which may be by
35
facsimile or other form of electronic transmission) of (i) a written instrument
of transfer in form reasonably satisfactory to the Registrar duly executed by
the Holder or such Holder's attorney duly authorized in writing, and (ii) if
such Security is being transferred prior to the Resale Restriction Termination
Date other than in accordance with Section 8.4, a certificate substantially in
the form set forth as Exhibit B, C or D, as applicable, hereto, executed by the
transferor or transferee, as applicable; thereupon, the Registrar is authorized
to confirm in writing to the transferee and, if requested, to the transferor of
such Security that such transfer has been registered in the Securities Register
and that such transferee is the Holder of such Security. The Certificate
evidencing the Security so transferred, duly endorsed by the transferor, shall
be surrendered to the Registrar at the time the transfer conditions specified in
the immediately preceding sentence are satisfied or within five (5) Business
Days after the Registrar has registered the transfer of such Security on the
Securities Register, and promptly after such surrender, an Administrator on
behalf of the Trust shall execute and, in the case of a Capital Security
Certificate, the Institutional Trustee shall, and is authorized to, authenticate
a Certificate in the name of the transferee as the new Holder of the Security
evidenced thereby. Until the Certificate evidencing the Security so transferred
is surrendered to the Registrar, such Security may not be transferred by such
new Holder. Each Certificate surrendered in connection with a registration of
transfer shall be canceled by the Institutional 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 registration of such transfer in the
Securities Register. Each such transferee shall be deemed to have agreed to be
bound by this Declaration.
(e) Neither the Trust nor the Registrar shall be required (i) to issue
Certificates representing Securities or 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) Prior to the Resale Restriction Termination Date, Certificates
evidencing Capital Securities shall bear the Restricted Securities Legend. The
Restricted Securities Legend on any Certificate evidencing outstanding Capital
Securities shall not be removed unless there is delivered to the Trust such
satisfactory evidence, which may include an opinion of counsel, as may be
reasonably required by the Trust, that neither the Restricted Securities Legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of the Securities Act or that such
Securities are not "restricted" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Institutional
Trustee, at the written direction of the Trust, shall authenticate and deliver
Capital Securities Certificates that do not bear the Restricted Securities
Legend in exchange for the Capital Securities Certificates bearing the
Restricted Securities Legend.
(b) Prior to the Resale Restriction Termination Date, without the written
consent of the Sponsor, Capital Securities may only be transferred: (i) to a QIB
36
if the instrument of transfer is accompanied by a certificate of the transferor
substantially in the form set forth as Exhibit C hereto; (ii) to an "accredited
investor" within the meaning of Rule 501(a) (1), (2), (3), (7) or (8) under the
Securities Act if the instrument of transfer is accompanied by a certificate of
the transferee substantially in the form set forth as Exhibit B hereto; or (iii)
to a non-"U.S. Person" in an "offshore transaction" under, and within the
meaning of, Regulation S under the Securities Act if the instrument of transfer
is accompanied by a certificate of the transferee substantially in the form set
forth as Exhibit D hereto. Each certificate furnished pursuant to this Section
8.2(b) may be an original or a copy (which may be furnished by facsimile or
other form of electronic transmission).
(c) The Capital Securities may not be transferred prior to the Resale
Restriction Termination Date except in compliance with restrictions on transfer
set forth in the legend set forth below (the "Restricted Securities Legend"),
and except as otherwise contemplated in Section 8.2(a), prior to the Resale
Restriction Termination Date, each Certificate evidencing outstanding Capital
Securities shall bear the Restricted Securities Legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES
ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE
LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY, AS
MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7)
OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
37
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE DEBENTURE ISSUER AND THE
TRUST PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E)
ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED
AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE
DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT
IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR
HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR
THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.
38
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
MAY BE REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN.
(d) Capital Securities may only be transferred in minimum blocks of
$100,000 aggregate liquidation amount (100 Capital Securities) and multiples of
$1,000 in excess thereof. Any attempted transfer of Capital Securities in a
block having an aggregate liquidation amount of less than $100,000 shall be
deemed to be void and of no legal effect whatsoever. Any such purported
transferee shall be deemed not to be a Holder of such Capital Securities for any
purpose, including, but not limited to, the receipt of Distributions on such
Capital Securities, and such purported transferee shall be deemed to have no
interest whatsoever in such Capital Securities.
Section 8.3. Deemed Security Holders. The Trust, the Administrators, the
Trustees, the Paying Agent, the Transfer Agent or the Registrar may treat the
Person in whose name any Security shall be registered on the Securities Register
of the Trust as the sole Holder and owner of such Security 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 Security on the part of any other Person, whether or not the Trust, the
Administrators, the Trustees, the Paying Agent, the Transfer Agent or the
Registrar shall have actual or other notice thereof.
Section 8.4. Transfer of Initial Securities. Notwithstanding the foregoing
provisions of this Article VIII or any other provision of this Declaration
(including all Annexes and Exhibits hereto) to the contrary, any or all of the
Capital Securities initially issued to the Purchaser (the "Initial Securities")
may be transferred by the Purchaser to any transferee selected by it that meets
the parameters specified below and, upon delivery to the Registrar, of originals
or copies (which may be by facsimile or other form of electronic transmission)
of a written instrument of transfer in form reasonably satisfactory to the
Registrar duly executed by the Purchaser or the Purchaser's attorney duly
authorized in writing (it being understood that no signature guarantee shall be
required), then the Registrar shall, and is authorized to, record and register
on the Securities Register the transfer of such Initial Securities to such
transferee; thereupon, the Registrar is authorized to confirm in writing to the
transferee and, if requested, to the transferor of such Initial Securities that
39
such transfer has been registered in the Securities Register and that such
transferee is the Holder of such Initial Securities; provided, however, that the
Purchaser of the Initial Securities, by its acceptance thereof, agrees that it
may not transfer any Initial Securities prior to the Resale Restriction
Termination Date to any transferee that is not a QIB, an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3), (7) or (8) under the Securities
Act or a non-"U.S. Person" in an "offshore transaction" under, and within the
meaning of, Regulation S under the Securities Act. The Certificate evidencing
the Initial Securities to be transferred, duly endorsed by the Purchaser, shall
be surrendered to the Registrar at the time the transfer conditions specified in
the immediately preceding sentence are satisfied or within five (5) Business
Days after the Registrar has registered the transfer of such Initial Securities
in the Securities Register, and promptly after such surrender, an Administrator
on behalf of the Trust shall execute and, in the case of a Capital Security
Certificate, the Institutional Trustee shall, and is authorized to, authenticate
a Certificate in the name of the transferee as the new Holder of the Initial
Securities evidenced thereby. Until the Certificate evidencing the Initial
Securities so transferred is surrendered to the Registrar, such Initial
Securities may not be transferred by such new Holder. No other conditions,
restrictions or other provisions of this Declaration or any other document shall
apply to a transfer of Initial Securities by the Purchaser.
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 9.1. Liability. (a) Except as expressly set forth in this
Declaration, 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; and
(ii) required to pay to the Trust or to any Holder of the Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Statutory Trust Act, the Holders of the
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, except as otherwise
specifically set forth herein.
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
40
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person (other than an
Administrator) shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's negligence, willful misconduct or bad faith
with respect to such acts or omissions and except that an Administrator shall be
liable for any such loss, damage or claim incurred by reason of such
Administrator's gross negligence, willful misconduct or bad faith 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 Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Institutional Trustee
under the Trust Indenture Act), are agreed by the parties hereto to replace such
other duties and liabilities of the Indemnified Person.
(b) Whenever in this Declaration 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 Declaration or
by applicable law.
Section 9.4. Indemnification. (a)
(i) The Sponsor shall indemnify, to the fullest extent permitted by
law, any Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the Trust) by reason of the fact that
such Person is or was an Indemnified Person against expenses (including
41
attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such Person in connection
with such action, suit or proceeding if such Person acted in good faith and
in a manner such Person reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Indemnified
Person did not act in good faith and in a manner which such Person
reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that such conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent permitted by
law, any Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or
in the right of the Trust to procure a judgment in its favor by reason of
the fact that such Person is or was an Indemnified Person against expenses
(including attorneys' fees and expenses) actually and reasonably incurred
by such Person in connection with the defense or settlement of such action
or suit if such Person acted in good faith and in a manner such Person
reasonably believed to be in or not opposed to the best interests of the
Trust and except that no such indemnification shall be made in respect of
any claim, issue or matter as to which such Indemnified Person shall have
been adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such Person
is fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that an Indemnified Person shall be successful on
the merits or otherwise (including dismissal of an action without prejudice
or the settlement of an action without admission of liability) in defense
of any action, suit or proceeding referred to in paragraphs (i) and (ii) of
this Section 9.4(a), or in defense of any claim, issue or matter therein,
such Person shall be indemnified, to the fullest extent permitted by law,
against expenses (including attorneys' fees and expenses) actually and
reasonably incurred by such Person in connection therewith.
(iv) Any indemnification of an Administrator under paragraphs (i) and
(ii) of this Section 9.4(a) (unless ordered by a court) shall be made by
the Sponsor only as authorized in the specific case upon a determination
that indemnification of the Indemnified Person is proper in the
circumstances because such Person has met the applicable standard of
conduct set forth in paragraphs (i) and (ii). Such determination shall be
made (A) by the Administrators by a majority vote of a Quorum consisting of
such Administrators who were not parties to such action, suit or
proceeding, (B) if such a Quorum is not obtainable, or, even if obtainable,
42
if a Quorum of disinterested Administrators so directs, by independent
legal counsel in a written opinion, or (C) by the Common Security Holder of
the Trust.
(v) To the fullest extent permitted by law, expenses (including
attorneys' fees and expenses) incurred by an Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit
or proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a)
shall be paid by the Sponsor in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf
of such Indemnified Person to repay such amount if it shall ultimately be
determined that such Person is not entitled to be indemnified by the
Sponsor as authorized in this Section 9.4(a). Notwithstanding the
foregoing, no advance shall be made by the Sponsor if a determination is
reasonably and promptly made (1) in the case of a Company Indemnified
Person (A) by the Administrators by a majority vote of a Quorum of
disinterested Administrators, (B) if such a Quorum is not obtainable, or,
even if obtainable, if a Quorum of disinterested Administrators so directs,
by independent legal counsel in a written opinion or (C) by the Common
Security Holder of the Trust, that, based upon the facts known to the
Administrators, counsel or the Common Security Holder at the time such
determination is made, such Indemnified Person acted in bad faith or in a
manner that such Person either believed to be opposed to or did not believe
to be in the best interests of the Trust, or, with respect to any criminal
proceeding, that such Indemnified Person believed or had reasonable cause
to believe such conduct was unlawful, or (2) in the case of a Fiduciary
Indemnified Person, by independent legal counsel in a written opinion that,
based upon the facts known to the counsel at the time such determination is
made, such Indemnified Person acted in bad faith or in a manner that such
Indemnified Person either believed to be opposed to or did not believe to
be in the best interests of the Trust, or, with respect to any criminal
proceeding, that such Indemnified Person believed or had reasonable cause
to believe such conduct was unlawful. In no event shall any advance be made
(i) to a Company Indemnified Person in instances where the Administrators,
independent legal counsel or the Common Security Holder reasonably
determine that such Person deliberately breached such Person's duty to the
Trust or its Common or Capital Security Holders or (ii) to a Fiduciary
Indemnified Person in instances where independent legal counsel promptly
and reasonably determines in a written opinion that such Person
deliberately breached such Person's duty to the Trust or its Common or
Capital Security Holders.
(b) The Sponsor shall indemnify, to the fullest extent permitted by
applicable law, each Indemnified Person from and against any and all loss,
damage, liability, tax (other than taxes based on the income of such Indemnified
Person), penalty, expense or claim of any kind or nature whatsoever incurred by
such Indemnified Person arising out of or in connection with or by reason of the
creation, administration or termination of the Trust, or any act or omission of
such Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Declaration, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage, liability, tax, penalty, expense or claim incurred by such Indemnified
43
Person by reason of negligence, willful misconduct or bad faith with respect to
such acts or omissions.
(c) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other paragraphs of this Section shall not be deemed exclusive
of any other rights to which those seeking indemnification and advancement of
expenses may be entitled under any agreement, vote of stockholders or
disinterested directors of the Sponsor or Capital Security Holders of the Trust
or otherwise, both as to action in such Person's official capacity and as to
action in another capacity while holding such office. All rights to
indemnification under this Section shall be deemed to be provided by a contract
between the Sponsor and each Indemnified Person who serves in such capacity at
any time while this Section is in effect. Any repeal or modification of this
Section shall not affect any rights or obligations then existing.
(d) 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 such Person and incurred by such Person in any such capacity, or arising
out of such Person's status as such, whether or not the Sponsor would have the
power to indemnify such Person against such liability under the provisions of
this Section.
(e) For purposes of this Section, references to "the Trust" shall include,
in addition to the resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a consolidation or
merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
with respect to the resulting or surviving entity as such Person would have with
respect to such constituent entity if its separate existence had continued.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Section shall, unless otherwise provided when authorized or
ratified, 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.
(g) The provisions of this Section shall survive the termination of this
Declaration or the earlier resignation or removal of the Institutional Trustee.
The obligations of the Sponsor under this Section to compensate and indemnify
the Trustees and to pay or reimburse the Trustees for expenses, disbursements
and advances shall constitute additional indebtedness hereunder. Such additional
indebtedness shall be secured by a lien prior to that of the Securities upon all
property and funds held or collected by the Trustees as such, except funds held
in trust for the benefit of the Holders of particular Capital Securities,
provided, that the Sponsor is the Holder of the Common Securities.
Section 9.5. Outside Businesses. Any Covered Person, the Sponsor, the
Delaware Trustee and the Institutional Trustee (subject to Section 4.3(c)) may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the income
44
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. None of any Covered Person, the Sponsor, the Delaware Trustee or the
Institutional 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 Institutional 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 Institutional 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. (a) The Sponsor agrees:
(i) subject to the provisions set forth in the Fee Agreement among the
Institutional Trustee, the Sponsor and the Purchaser of even date herewith,
to pay to the Trustees from time to time such compensation for all services
rendered by them hereunder as the parties shall agree in writing 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
(ii) except as otherwise expressly provided herein, to reimburse each
of the Trustees upon request for all reasonable, documented expenses,
disbursements and advances incurred or made by such Person in accordance
with any provision of this Declaration (including the reasonable
compensation and the expenses and disbursements of such Person's agents and
counsel), except any such expense, disbursement or advance attributable to
such Person's negligence, willful misconduct or bad faith.
(b) The provisions of this Section shall survive the dissolution of the
Trust and the termination of this Declaration and the removal or resignation of
any Trustee.
ARTICLE X
ACCOUNTING
Section 10.1. Fiscal Year. The fiscal year (the "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 ss. 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 on the accrual method of accounting, in accordance with generally
accepted accounting principles, consistently applied.
45
(b) The Sponsor shall cause the Administrators to deliver to each Holder of
Securities: (1) each Form 10-K and Form 10-Q prepared by the Sponsor and filed
with the Commission in accordance with the Exchange Act, within 30 calendar days
after the filing thereof; (2) if the Sponsor is not then (y) subject to Section
13 or 15(d) of the Exchange Act or (z) exempt from reporting pursuant to Rule
12g3-2(b) thereunder, the information required to be provided by Rule 144A(d)(4)
under the Securities Act; and (3) within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year and the statements of
income or loss for the Fiscal Year then ended, that are prepared at the
principal office of the Trust in the United States, as defined for purposes of
Treasury Regulations ss. 301.7701-7.
(c) 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.
(d) The Administrators shall cause to be duly prepared in the United
States, as defined for purposes of Treasury Regulations ss. 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.
(e) So long as a Holder of the Capital Securities is an entity that holds a
pool of trust preferred securities and/or debt securities or a trustee thereof,
the Sponsor shall cause the Administrators to deliver the Sponsor's reports on
Form FR Y-9C to be delivered to such Holder promptly following their filing with
the Federal Reserve.
Section 10.3. Banking. The Trust shall maintain one or more bank accounts
in the United States, as defined for purposes of Treasury Regulations ss.
301.7701-7, in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Institutional 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 Institutional Trustee.
Section 10.4. Withholding. The Institutional Trustee or any Paying Agent
and the Administrators shall comply with all withholding requirements under
United States federal, state and local law. The Institutional Trustee or any
Paying Agent shall request, and each Holder shall provide to the Institutional
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 Institutional
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
46
the Holder to applicable jurisdictions. To the extent that the Institutional
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 to the Holder in the amount
of the withholding. 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
Institutional Trustee or any Paying Agent may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
Section 11.1. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by
(i) the Institutional Trustee,
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee,
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Administrators, the Administrators, and
(iv) the Holders of a Majority in liquidation amount of the Common
Securities.
(b) Notwithstanding any other provision of this Article XI, no amendment
shall be made, and any such purported amendment shall be void and ineffective:
(i) unless the Institutional 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 Declaration (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 Declaration (including the terms of the Securities) and
that all conditions precedent to the execution and delivery of such
amendment have been satisfied; or
(ii) if the result of such amendment would be to
(A) cause the Trust to cease to be classified for purposes of
United States federal income taxation as a grantor trust;
47
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act; or
(D) cause the Debenture Issuer to be unable to treat an amount
equal to the liquidation amount of the Capital Securities as "Tier 1
Capital" (or its equivalent) for purposes of the capital adequacy
guidelines of the Federal Reserve (or any successor regulatory
authority with jurisdiction over bank holding companies).
(c) Except as provided in Section 11.1(d), (e) or (g), 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 Capital Securities shall
have consented to such amendment.
(d) In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Holder, this Declaration may
not be amended to (i) change the amount or timing of any Distribution on the
Securities or any redemption or liquidation provisions applicable to 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 (ii) restrict
the right of a Holder to institute suit for the enforcement of any Distributions
or other amounts on or after their due date.
(e) Sections 9.1(b) and 9.1(c) and this Section shall not be amended
without the consent of all of the Holders of the Securities.
(f) The rights of the Holders of the Capital Securities and Common
Securities, as applicable, under Article IV to increase or decrease the number
of, and appoint and remove, Trustees shall not be amended without the consent of
the Holders of a Majority in liquidation amount of the Capital Securities or
Common Securities, as applicable.
(g) This Declaration may be amended by the Institutional Trustee and the
Holder of the Common Securities without the consent of the Holders of the
Capital Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; or
(iv) modify, eliminate or add to any provision of this Declaration to
such extent as may be necessary or desirable, including, without
limitation, 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
48
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);
provided, however, that no such amendment contemplated in clause (i), (ii),
(iii) or (iv) shall adversely affect the powers, preferences, rights or
interests of Holders of Capital Securities.
Section 11.2. Meetings of the Holders of the Securities; Action by Written
Consent.
(a) Meetings of the Holders of the Capital Securities or the Common
Securities may be called at any time by the Administrators (or as provided in
the terms of such Securities) to consider and act on any matter on which Holders
of such Securities are entitled to act under the terms of this Declaration, the
terms of such Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, if any. The Administrators shall
call a meeting of the Holders of such Securities if directed to do so by the
Holders of not less than 10% in liquidation amount of such Securities. Such
direction shall be given by delivering to the Administrators one or more notices
in a writing stating that the signing Holders of such Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of 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 Declaration or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, if any, 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 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 liquidation amount of Securities 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.
49
(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.
(iii) Unless the Statutory Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or admitted for
trading, if any, 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
Regulationsss.301.7701-7).
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
Section 12.1. Representations and Warranties of Institutional Trustee. The
Trustee that acts as initial Institutional Trustee represents and warrants to
the Trust and to the Sponsor at the date of this Declaration, and each Successor
Institutional Trustee represents and warrants to the Trust and the Sponsor at
the time of the Successor Institutional Trustee's acceptance of its appointment
as Institutional Trustee, that:
(a) the Institutional Trustee is a banking corporation or national
association with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware or the United States of
America, respectively, with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration;
(b) the Institutional Trustee has a combined capital and surplus of at
least fifty million U.S. dollars ($50,000,000);
50
(c) the Institutional Trustee is not an Affiliate of the Sponsor, nor does
the Institutional Trustee offer or provide credit or credit enhancement to the
Trust;
(d) the execution, delivery and performance by the Institutional Trustee of
this Declaration has been duly authorized by all necessary action on the part of
the Institutional Trustee, and this Declaration has been duly executed and
delivered by the Institutional Trustee, and under Delaware law (excluding any
securities laws) constitutes a legal, valid and binding obligation of the
Institutional Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of whether
considered in a proceeding in equity or at law);
(e) the execution, delivery and performance of this Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(f) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority governing the trust powers of
the Institutional Trustee is required for the execution, delivery or performance
by the Institutional Trustee of this Declaration.
Section 12.2. Representations and Warranties of Delaware Trustee. The
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) if it is not a natural person, the Delaware Trustee is duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) if it is not a natural person, the execution, delivery and performance
by the Delaware Trustee of this Declaration has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee, and this
Declaration has been duly executed and delivered by the Delaware Trustee, and
under Delaware law (excluding any securities laws) constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether considered in a proceeding in equity or at law);
(c) if it is not a natural person, the execution, delivery and performance
of this Declaration by the Delaware Trustee does not conflict with or constitute
a breach of the charter or by-laws of the Delaware Trustee;
(d) it has trust power and authority to execute and deliver, and to carry
out and perform its obligations under the terms of, this Declaration;
(e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority governing the trust powers of
51
the Delaware Trustee is required for the execution, delivery or performance by
the Delaware Trustee of this Declaration; and
(f) the Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, it is an entity which has its principal
place of business in the State of Delaware and, in either case, a Person that
satisfies for the Trust the requirements of ss.3807 of the Statutory Trust Act.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Notices. All notices provided for in this Declaration shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied (which 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): NPB Capital Trust IV, c/o National
Penn Bancshares, Inc., P.O. Box 547, Boyertown, Pennsylvania 19512, Attention:
Gary L. Rhoads, Telecopy: (610) 369-6349, Telephone: (610) 369-6341;
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Holders of the Securities): Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, DE 19890-0001, Attention: Corporate Trust
Administration, Telecopy: 302-651-8882, Telephone: 302-651-1000;
(c) if given to the Institutional Trustee, at the Institutional Trustee's
mailing address set forth below (or such other address as the Institutional
Trustee may give notice of to the Holders of the Securities): Wilmington Trust
Company, Rodney Square North, 1100 North Market Street, Wilmington, DE
19890-0001, Attention: Corporate Trust Administration, Telecopy: 302-651-8882,
Telephone: 302-651-1000;
(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): National Penn Bancshares,
Inc., P.O. Box 547, Boyertown, Pennsylvania 19512, Attention: Gary L. Rhoads,
Telecopy: (610) 369-6349, Telephone: (610) 369-6341; or
(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.
52
Section 13.2. Governing Law. This Declaration and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the law of the State of Delaware and all rights, obligations 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.
Section 13.3. Submission to Jurisdiction.
(a) Each of the parties hereto agrees that any suit, action or proceeding
arising out of or based upon this Declaration, or the transactions contemplated
hereby, may be instituted in any of the courts of the State of New York and the
United States District Courts, in each case located in the Borough of Manhattan,
City and State of New York, and further agrees to submit to the jurisdiction of
any competent court in the place of its corporate domicile in respect of actions
brought against it as a defendant. In addition, each such party irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of such suit, action or proceeding
brought in any such court and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum and irrevocably waives any right to which it may be entitled
on account of its place of corporate domicile. Each such party hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or relating to this Declaration or the transactions contemplated
hereby. Each such party agrees that final judgment in any proceedings brought in
such a court shall be conclusive and binding upon it and may be enforced in any
court to the jurisdiction of which it is subject by a suit upon such judgment.
(b) Each of the Sponsor, the Trustees, the Administrators and the Holder of
the Common Securities irrevocably consents to the service of process on it in
any such suit, action or proceeding by the mailing thereof by registered or
certified mail, postage prepaid, to it at its address given in or pursuant to
Section 13.1 hereof.
(c) To the extent permitted by law, nothing herein contained shall preclude
any party from effecting service of process in any lawful manner or from
bringing any suit, action or proceeding in respect of this Declaration in any
other state, country or place.
Section 13.4. 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 Declaration shall be
interpreted to further this intention of the parties.
Section 13.5. Headings. Headings contained in this Declaration are inserted
for convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
Section 13.6. Successors and Assigns. Whenever in this Declaration any of
the parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included, and all covenants and agreements in this
53
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether or not so expressed.
Section 13.7. Partial Enforceability. If any provision of this Declaration,
or the application of such provision to any Person or circumstance, shall be
held invalid, the remainder of this Declaration, or the application of such
provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 13.8. Counterparts. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees 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.
54
IN WITNESS WHEREOF, the undersigned have caused this
Declaration to be duly executed as of the day and year first above written.
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By:
--------------------------------------
Name:
Title
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By:
--------------------------------------
Name:
Title:
National Penn Bancshares, Inc.
as Sponsor
By:
--------------------------------------
Name:
Title:
------------------------------------------
Gary L. Rhoads
as Administrator
------------------------------------------
Sandra L. Spayd
as Administrator
55
ANNEX I
TERMS OF
CAPITAL SECURITIES AND COMMON SECURITIES
Pursuant to Section 6.1 of the Amended and Restated Declaration of Trust,
dated as of March 25, 2004 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Capital Securities and the Common Securities
(collectively, the "Securities") are set out below (each capitalized term used
but not defined herein has the meaning set forth in the Declaration):
1. Designation and Number.
(a) Capital Securities. 20,000 Capital Securities of NPB Capital Trust IV
(the "Trust"), with an aggregate liquidation amount with respect to the assets
of the Trust of TWENTY MILLION Dollars ($20,000,000) and a liquidation amount
with respect to the assets of the Trust of $1,000 per Capital Security, are
hereby designated for the purposes of identification only as the "MMCapSSM" (the
"Capital Securities"). The Capital Security Certificates evidencing the Capital
Securities shall be substantially in the form of Exhibit A-1 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules of any
stock exchange on which the Capital Securities are listed, if any.
(b) Common Securities. 619 Common Securities of the Trust (the "Common
Securities") will be evidenced by Common Security Certificates substantially in
the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice. In the absence of an Event of Default, the Common Securities will have
an aggregate liquidation amount with respect to the assets of the Trust of SIX
HUNDRED NINETEEN THOUSAND Dollars ($619,000) and a liquidation amount with
respect to the assets of the Trust of $1,000 per Common Security.
2. Distributions. (a) Distributions payable on each Security will be
payable at a floating rate of interest per annum, which, with respect to any
Distribution Period (as defined herein), will be equal to LIBOR, as determined
on the LIBOR Determination Date for such Distribution Period (or, in the case of
the first Distribution Period, will be 1.11%), plus 2.75% (the "Coupon Rate");
provided, however, that the Coupon Rate for any Distribution Period may not
exceed the Interest Rate (as defined in the Indenture) for the related Interest
Period (as defined in the Indenture). Distributions in arrears for more than one
Distribution Period will bear interest thereon, compounded quarterly, at the
applicable Coupon Rate for each Distribution Period thereafter (to the extent
permitted by applicable law). The term "Distributions", as used herein, includes
cash Distributions, any such compounded Distributions and any Additional Amounts
payable on the Debentures unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Institutional Trustee and to the extent the Institutional Trustee has funds
legally available in the Property Account therefor. The amount of Distributions
payable for any Distribution Period will be computed on the basis of a 360-day
year and the actual number of days elapsed in such Distribution Period.
A-I-1
The term "Distribution Period", as used herein, means (i) in the case of
the first Distribution Period, the period from, and including, the date of
original issuance of the Securities to, but excluding, the initial Distribution
Payment Date and (ii) thereafter, from, and including, the first day following
the end of the preceding Distribution Period to, but excluding, the applicable
Distribution Payment Date or, in the case of the last Distribution Period, the
related date of redemption.
(b) LIBOR shall be determined by the Calculation Agent for each
Distribution Period (other than the first Distribution Period, in which case
LIBOR will be 1.11% per annum) in accordance with the following provisions:
(1) On the second LIBOR Business Day (provided, that on such day
commercial banks are open for business (including dealings in foreign
currency deposits) in London (a "LIBOR Banking Day"), and otherwise the
next preceding LIBOR Business Day that is also a LIBOR Banking Day) prior
to the January 15, April 15, July 15 or October 15, as the case may be,
immediately succeeding the commencement of such Distribution Period (each
such day, a "LIBOR Determination Date"), LIBOR shall equal the rate, as
obtained by the Calculation Agent, for three-month U.S. Dollar deposits in
Europe, which appears on Telerate (as defined in the International Swaps
and Derivatives Association, Inc. 2000 Interest Rate and Currency Exchange
Definitions) page 3750 or such other page as may replace such page 3750, as
of 11:00 a.m. (London time) on such LIBOR Determination Date, as reported
by Bloomberg Financial Markets Commodities News or any successor service
("Telerate Page 3750"). "LIBOR Business Day" means any day that is not a
Saturday, Sunday or other day on which commercial banking institutions in
The City of New York or Wilmington, Delaware are authorized or obligated by
law or executive order to be closed. If such rate is superseded on Telerate
Page 3750 by a corrected rate before 12:00 noon (London time) on such LIBOR
Determination Date, the corrected rate as so substituted will be LIBOR for
such LIBOR Determination Date.
(2) If, on such LIBOR Determination Date, such rate does not appear on
Telerate Page 3750, the Calculation Agent shall determine the arithmetic
mean of the offered quotations of the Reference Banks (as defined below) to
leading banks in the London interbank market for three-month U.S. Dollar
deposits in Europe (in an amount determined by the Calculation Agent) by
reference to requests for quotations as of approximately 11:00 a.m. (London
time) on such LIBOR Determination Date made by the Calculation Agent to the
Reference Banks. If, on such LIBOR Determination Date, at least two of the
Reference Banks provide such quotations, LIBOR shall equal the arithmetic
mean of such quotations. If, on such LIBOR Determination Date, only one or
none of the Reference Banks provide such a quotation, LIBOR shall be deemed
to be the arithmetic mean of the offered quotations that at least two
leading banks in The City of New York (as selected by the Calculation
Agent) are quoting on such LIBOR Determination Date for three-month U.S.
Dollar deposits in Europe at approximately 11:00 a.m. (London time) (in an
amount determined by the Calculation Agent). As used herein, "Reference
A-I-2
Banks" means four major banks in the London interbank market selected by
the Calculation Agent.
(3) If the Calculation Agent is required but is unable to determine a
rate in accordance with at least one of the procedures provided above,
LIBOR for such Distribution Period shall be LIBOR in effect for the
immediately preceding Distribution Period.
(c) All percentages resulting from any calculations on the Securities will
be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all
dollar amounts used in or resulting from such calculation will be rounded to the
nearest cent (with one-half cent being rounded upward).
(d) On each LIBOR Determination Date, the Calculation Agent shall notify,
in writing, the Sponsor and the Paying Agent of the applicable Coupon Rate that
applies to the related Distribution Period. The Calculation Agent shall, upon
the request of a Holder of any Securities, inform such Holder of the Coupon Rate
that applies to the related Distribution Period. All calculations made by the
Calculation Agent in the absence of manifest error shall be conclusive for all
purposes and binding on the Sponsor and the Holders of the Securities. The
Paying Agent shall be entitled to rely on information received from the
Calculation Agent or the Sponsor as to the applicable Coupon Rate. The Sponsor
shall, from time to time, provide any necessary information to the Paying Agent
relating to any original issue discount and interest on the Securities that is
included in any payment and reportable for taxable income calculation purposes.
(e) Distributions on the Securities will be cumulative, will accrue from
the date of original issuance, and will be payable, subject to extension of
Distribution Periods as described herein, quarterly in arrears on January 7,
April 7, July 7 and October 7 of each year, commencing on July 7, 2004 (each, a
"Distribution Payment Date"), and on any earlier date of redemption, as
applicable. 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 such extended interest payment
period, together with all previous and future consecutive extensions thereof, is
referred to herein as an "Extension Period") at any time and from time to time
on the Debentures, subject to the conditions described below and in the
Indenture. No Extension Period may end on a date other than a Distribution
Payment Date or extend beyond the Maturity Date, any Optional Redemption Date or
the Special Redemption Date, as the case may be (each such term as defined
herein). During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest (such accrued interest and
interest thereon referred to herein as "Deferred Interest") will accrue, at an
annual rate equal to the Coupon Rate applicable during such Extension Period,
compounded quarterly from the date such Deferred Interest would have been
payable were it not for the Extension Period, to the extent permitted by
applicable law. At the end of any Extension Period, the Debenture Issuer shall
pay all Deferred Interest then accrued and unpaid on the Debentures; provided,
however, that during any Extension Period, the Debenture Issuer may not (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire,
or make a liquidation payment with respect to, any of the Debenture Issuer's
capital stock, (ii) make any payment of principal or premium or interest on or
A-I-3
repay, repurchase or redeem any debt securities of the Debenture Issuer that
rank in all respects pari passu with or junior in interest to the Debentures or
(iii) make any payment under any guarantees of the Debenture Issuer that rank in
all respects pari passu with or junior in interest to the Guarantee (other than
(a) repurchases, redemptions or other acquisitions of shares of capital stock of
the Debenture Issuer (A) in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of one or more
employees, officers, directors or consultants, (B) in connection with a dividend
reinvestment or stockholder stock purchase plan or (C) in connection with the
issuance of capital stock of the 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 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, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (e) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior in interest to such
stock). Prior to the termination of any Extension Period, the Debenture Issuer
may further extend such Extension Period, provided, that no Extension Period
(including all previous and further consecutive extensions that are part of such
Extension Period) shall exceed 20 consecutive quarterly periods. Upon the
termination of any Extension Period and upon the payment of all Deferred
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the requirements herein and in the Indenture. No interest or Deferred Interest
(except any Additional Amounts that may be due and payable) shall be due and
payable during an Extension Period, except at the end thereof, but Deferred
Interest shall accrue upon each installment of interest that would otherwise
have been due and payable during such Extension Period until such installment is
paid.
As a consequence of any Extension Period, Distributions will be deferred.
Notwithstanding any such deferral, Distributions will continue to accrue on the
Securities, and Distributions on such accrued Distributions will accrue, at the
Coupon Rate applicable during such Extension Period, compounded quarterly, to
the extent permitted by applicable law. If Distributions are deferred, the
Distributions due shall be paid on the date that such Extension Period
terminates to Holders of the Securities as they appear on the books and records
of the Trust on the regular record date immediately preceding the Distribution
Payment Date on which such Extension Period terminates to the extent that the
Trust has funds legally available for the payment of such Distributions in the
Property Account of the Trust.
The Trust's funds available for Distributions 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 the Guarantee.
A-I-4
(f) Distributions on the Securities on any Distribution Payment Date will
be payable to the Holders thereof as they appear on the books and records of the
Registrar on the relevant regular record dates. The relevant "regular record
dates" shall be 15 days before the relevant Distribution Payment Dates.
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 original relevant regular record
date, and such defaulted Distributions will instead be payable to the Person in
whose name such Securities are registered on the regular record date preceding
the Distribution Payment Date on which the related Extension Period terminates
or, in the absence of an Extension Period, a special record date therefor
selected by the Administrators.
(g) 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.
(h) If any Distribution Payment Date other than any date of redemption
falls on a day that is not a Business Day, then Distributions payable will be
paid on, and such Distribution Payment Date will be moved to, the next
succeeding Business Day, and additional Distributions will accrue for each day
that such payment is delayed as a result thereof.
3. Liquidation Distribution Upon Dissolution. In the event of the voluntary
or involuntary liquidation, dissolution, winding-up or termination of the Trust
(each, a "Liquidation"), the Holders of the Securities will be entitled to
receive out of the assets of the Trust legally available for distribution to
Holders of the Securities, after satisfaction of liabilities to creditors of the
Trust (to the extent not satisfied by the Debenture Issuer), an amount in cash
equal to the aggregate of the liquidation amount of $1,000 per Security plus
unpaid Distributions accrued thereon to the date of payment (collectively, the
"Liquidation Distribution"), unless: (i) the Debentures have been redeemed in
full in accordance with the terms thereof and of the Indenture; or (ii) the
Debentures in an aggregate principal amount equal to the aggregate liquidation
amount of such Securities and bearing accrued and unpaid interest in an amount
equal to the accrued and unpaid Distributions on such Securities, after paying
or making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of 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, upon receipt by the Debenture Issuer and the Institutional Trustee
for the benefit of the Trust of (i) an opinion of nationally recognized tax
counsel that Holders will not recognize any gain or loss for United States
Federal income tax purposes as a result of the distribution of Debentures, to
dissolve the Trust (including, without limitation, upon the occurrence of a Tax
Event, an Investment Company Event or a Capital Treatment Event, each as defined
herein) and (ii) prior approval from the Board of Governors of the Federal
Reserve System (the "Federal Reserve") (if then required under applicable
capital guidelines or policies of the Federal Reserve) and, after satisfaction
of liabilities to creditors of the Trust, cause the Debentures to be distributed
A-I-5
to the Holders of the Securities on a Pro Rata basis in accordance with the
aggregate liquidation amount thereof.
The Trust shall dissolve on the first to occur of (i) April 6, 2039, the
expiration of the term of the Trust, (ii) 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 Declaration or the Guarantee, as the case may be) the filing of a
certificate of dissolution or its equivalent with respect to the Sponsor 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) the distribution of
all of the Debentures to the Holders of the Securities, upon exercise of the
right of the Holders of all of the outstanding Common Securities to dissolve the
Trust as described above, (v) the entry of a decree of a judicial dissolution of
any Holder of the Common Securities, the Sponsor, the Trust or the Debenture
Issuer, (vi) when all of the Securities are then subject to 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 all of the Trustees and the Sponsor. As soon as
practicable after the dissolution of the Trust and upon completion of the
winding up of the Trust, the Trust shall terminate upon the filing of a
certificate of cancellation with the Secretary of State of the State of
Delaware.
Notwithstanding the foregoing, if a Liquidation of the Trust occurs as
described in clause (i), (ii), (iii) or (v) in the immediately preceding
paragraph, the Trust shall be liquidated by the Institutional Trustee of the
Trust as expeditiously as such Trustee determines to be practical by
distributing, after satisfaction of liabilities to creditors of the Trust (to
the extent not satisfied by the Debenture Issuer) as provided by applicable law,
to the Holders of the Securities, the Debentures on a Pro Rata basis, unless
such distribution is determined by the Institutional Trustee not to be
practical, in which event such Holders will be entitled to receive on a Pro Rata
basis, out of the assets of the Trust legally available for distribution to the
Holders of the Securities, after satisfaction of liabilities to creditors of the
Trust (to the extent not satisfied by the Debenture Issuer), an amount in cash
equal to the Liquidation Distribution. A Liquidation of the Trust pursuant to
clause (iv) of the immediately preceding paragraph shall occur if the
Institutional Trustee determines that such Liquidation is practical by
distributing, after satisfaction of liabilities to creditors of the Trust (to
the extent not satisfied by the Debenture Issuer), to the Holders of the
Securities on a Pro Rata basis, the Debentures, and such distribution occurs.
If, upon any Liquidation of the Trust, 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 the Securities shall be paid to the Holders of the Securities on
a Pro Rata basis, except that if an Event of Default has occurred and is
continuing, then the Capital Securities shall have a preference over the Common
Securities with regard to such amounts.
Upon any Liquidation of the Trust involving a distribution of the
Debentures, if at the time of such Liquidation, the Capital Securities were
rated by at least one nationally-recognized statistical rating organization, the
Debenture Issuer will use its reasonable best efforts to obtain from at least
one such or other rating organization a rating for the Debentures.
A-I-6
After the date for any distribution of the Debentures upon any Liquidation
of the Trust, (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) any certificates representing the Capital Securities will be
deemed to represent undivided beneficial interests in such of the Debentures as
have an aggregate principal amount equal to the aggregate liquidation amount of
such Capital Securities and bearing accrued and unpaid interest equal to accrued
and unpaid Distributions on such Capital 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 shall be made to Holders
of Securities in respect of any payments due and payable under the Debentures)
and (iii) all rights of Holders of Securities 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 April 6, 2034 (the "Maturity Date") at an
amount in cash equal to 100% of the principal amount thereof plus unpaid
interest accrued thereon to such date (the "Maturity Redemption Price"). The
Debentures may be redeemed by the Debenture Issuer, at its option, in whole or
in part, on any Distribution Payment Date on or after April 7, 2009 (each, an
"Optional Redemption Date"), at the Optional Redemption Price, upon not less
than 30 nor more than 60 days' prior written notice to holders of such
Debentures. In addition, upon the occurrence and continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, the Debentures may be
redeemed by the Debenture Issuer, at its option, in whole but not in part, at
any time within 90 days following the occurrence of such Tax Event, Investment
Company Event or Capital Treatment Event, as the case may be (the "Special
Redemption Date"), at the Special Redemption Price, upon not less than 30 nor
more than 60 days' prior written notice to holders of the Debentures so long as
such Tax Event, Investment Company Event or Capital Treatment Event, as the case
may be, is continuing. In each case, the right of the Debenture Issuer to redeem
the Debentures prior to maturity is subject to the Debenture Issuer and the
Trust having received prior approval from the Federal Reserve, if then required
under applicable capital guidelines or policies of the Federal Reserve.
Additional interest may also be payable by the Debenture Issuer in connection
with such Tax Event, Investment Company Event or Capital Treatment Event as
specified in Section 10.02 of the Indenture. Any such interest received by the
Trust will be distributed promptly to Holders of the Securities on a Pro Rata
basis.
"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, regulatory procedure, notice or announcement) (an
"Administrative Action") or judicial decision interpreting or applying such laws
or regulations, regardless of whether such Administrative Action or judicial
decision is issued to or in connection with a proceeding involving the 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
A-I-7
States federal income tax with respect to income received or accrued on the
Debentures; (ii) if the Debenture Issuer is organized and existing under the
laws of the United States or any state thereof or the District of Columbia,
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 or otherwise required to pay, or required to withhold from
Distributions, more than a de minimis amount of other taxes (including
withholding taxes), duties, assessments or other governmental charges.
"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 a change in law or regulation or written change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or, within 90 days of the date of such
opinion will be, considered an Investment Company that is required to be
registered under the Investment Company Act, which change becomes effective or
would become effective, as the case may be, on or after the date of the original
issuance of the Debentures.
"Capital Treatment Event" means, if the Debenture Issuer is organized and
existing under the laws of the United States or any state thereof or the
District of Columbia, 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 in, the laws, rules or regulations of the United
States or any political subdivision thereof or therein, or as the result of any
official or administrative pronouncement or action or decision interpreting or
applying such laws, rules or regulations, which amendment or change is effective
or which pronouncement, action or decision is announced on or after the date of
original issuance of the Debentures, there is more than an insubstantial risk
that the Debenture Issuer will not, within 90 days of the date of such opinion,
be entitled to treat an amount equal to the aggregate liquidation amount of the
Capital Securities as "Tier 1 Capital" (or the then equivalent thereof) for
purposes of the capital adequacy guidelines of the Federal Reserve (or any
successor regulatory authority with jurisdiction over bank holding companies),
as then in effect and applicable to the Debenture Issuer; provided, however,
that the distribution of the Debentures in connection with the Liquidation of
the Trust by the Debenture Issuer shall not in and of itself constitute a
Capital Treatment Event unless such Liquidation shall have occurred in
connection with a Tax Event or an Investment Company Event.
"Optional Redemption Price" means an amount in cash equal to 100% of the
principal amount of the Debentures being redeemed plus unpaid interest accrued
on such Debentures to the related Optional Redemption Date.
"Special Event" means any of a Tax Event, an Investment Company Event or a
Capital Treatment Event.
"Special Redemption Price" means, with respect to the redemption of the
Debentures following a Special Event, an amount in cash equal to 100.00% of the
A-I-8
principal amount of the Debentures to be redeemed, plus unpaid interest accrued
thereon to the Special Redemption Date.
(b) Upon any repayment of the Debentures at maturity or in whole or in part
upon redemption (other than following the distribution of the Debentures to the
Holders of the Securities), the proceeds from such repayment shall concurrently
be applied to redeem Pro Rata, at a redemption price corresponding to the
applicable Maturity Redemption Price, Optional Redemption Price or Special
Redemption Price for the Debentures, as the case may be, Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid; provided, however, that Holders of such Securities shall
be given not less than 30 nor more than 60 days' prior written notice of such
redemption (other than a redemption resulting from the maturity of the
Debentures on the Maturity Date).
(c) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Capital Securities will be redeemed Pro Rata and the
Capital Securities to be redeemed will be as described in Section 4(e)(ii)
below.
(d) The Trust may not redeem fewer than all the outstanding Capital
Securities unless all accrued and unpaid Distributions have been paid on all
Capital Securities for all Distribution Periods terminating on or before the
related date of redemption.
(e) Redemption or Distribution Procedures.
(i) Written notice of any redemption of, or written notice of
distribution of the Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by 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 of redemption or exchange thereof which,
in the case of a redemption, will be the date of 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 Section
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 Registrar. 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.
(ii) In the event that fewer than all the outstanding Capital
Securities are to be redeemed, the Capital Securities to be redeemed shall
be redeemed Pro Rata from each Holder.
(iii) 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 or repaid as set out in this Section (which notice
will be irrevocable), then, provided, that the Institutional Trustee has a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the price
A-I-9
payable upon redemption of the Securities 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 related date of redemption. 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
subject to redemption and all rights of Holders of such Securities so
subject to redemption will cease, except the right of the Holders of such
Securities to receive the applicable price specified in Section 4(a), but
without interest on such price. If any date of redemption of the Securities
falls on a day that is not a Business Day, then payment of all amounts
payable on such date will be made on the next succeeding Business Day, and
no additional Distributions will accrue in respect of such payment on such
next succeeding Business Day. If any amount payable upon redemption of the
Securities is improperly withheld or refused and not paid either by the
Trust, the Debenture Issuer or the Sponsor as guarantor pursuant to the
Guarantee, Distributions on such Securities will continue to accrue at the
Coupon Rate applicable from the date of redemption to the actual date of
payment, in which case the actual payment date will be considered the date
of redemption for purposes of calculating the price payable upon redemption
of the Securities. In the event of any redemption of the Capital 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 Capital 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 Capital Securities to be so redeemed or (ii)
register the transfer of or exchange any Capital Securities so selected for
redemption, in whole or in part, except for the unredeemed portion of any
Capital Securities being redeemed in part.
(iv) Redemption/Distribution Notices shall be sent by the
Administrators on behalf of the Trust (A) in respect of the Capital
Securities, to the Holders thereof, and (B) in respect of the Common
Securities, to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), and provided, that the
acquiror is not the Holder of the Common Securities or the obligor under
the Indenture, the Sponsor or any of its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the
open market or by private agreement.
5. Voting Rights - Capital Securities. (a) Except as provided under
Sections 5(b) and 7 and as otherwise required by law and the Declaration, the
Holders of the Capital Securities will have no voting rights. The Administrators
are required to call a meeting of the Holders of the Capital Securities if
directed to do so by Holders of not less than 10% in liquidation amount of the
Capital Securities.
(b) Subject to the requirements of obtaining a tax opinion by the
Institutional Trustee in certain circumstances set forth in the last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Capital
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
Institutional Trustee, or exercising any trust or power conferred upon the
A-I-10
Institutional Trustee under the Declaration, 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) waiving any past default and its
consequences that are waivable under the Indenture, (iii) exercising any right
to rescind or annul an acceleration of the principal of all the Debentures or
(iv) consenting on behalf of all the Holders of the Capital 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 principal amount of Debentures (a "Super
Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of not less
than the proportion in liquidation amount of the Capital Securities outstanding
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding. If the Institutional Trustee fails to enforce its
rights under the Debentures after the Holders of a Majority or Super Majority,
as the case may be, in liquidation amount of such Capital Securities have so
directed the Institutional Trustee, to the fullest extent permitted by law, a
Holder of the Capital Securities may institute a legal proceeding directly
against the Debenture Issuer to enforce the Institutional Trustee's rights under
the Debentures without first instituting any legal proceeding against the
Institutional 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
premium, if any, on or principal of the Debentures on the date such interest,
premium, if any, or principal is payable (or in the case of redemption, the date
of redemption), then a Holder of the Capital Securities may directly institute a
proceeding for enforcement of payment, on or after the respective due dates
specified in the Debentures, to such Holder directly of the principal of or
premium, if any, or interest on the Debentures having an aggregate principal
amount equal to the aggregate liquidation amount of the Capital Securities of
such Holder. The Institutional Trustee shall notify all Holders of the Capital
Securities of any default actually known to the Institutional Trustee with
respect to the Debentures unless (x) such default has been cured prior to the
giving of such notice or (y) the Institutional Trustee determines in good faith
that the withholding of such notice is in the interest of the Holders of such
Capital 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 Institutional Trustee shall not take any of the
actions described in clause (i), (ii), (iii) or (iv) above unless the
Institutional 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 Capital Securities may be given at a separate meeting of Holders
of the Capital 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
Institutional Trustee will cause a notice of any meeting at which Holders of the
Capital 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 Capital 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
A-I-11
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
Capital Securities will be required for the Trust to redeem and cancel Capital
Securities or to distribute the Debentures in accordance with the Declaration
and the terms of the Securities.
Notwithstanding that Holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
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 Capital Securities were not
outstanding.
In no event will Holders of the Capital 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 Declaration,
Holders of Capital Securities have the right to vote to appoint, remove or
replace the Institutional Trustee and the Delaware Trustee.
6. Voting Rights - Common Securities. (a) Except as provided under Sections
6(b), 6(c) and 7 and as otherwise required by law and the Declaration, the
Common Securities will have no voting rights.
(b) The Holder of the Common Securities is entitled, in accordance with
Article IV of the Declaration, to vote to appoint, remove or replace any
Administrators.
(c) Subject to Section 6.7 of the Declaration and only after each Event of
Default (if any) with respect to the Capital Securities has been cured, waived
or otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holder 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 Institutional Trustee, or exercising
any trust or power conferred upon the Institutional Trustee under the
Declaration, 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) waiving any past default and its consequences that are waivable
under the Indenture, or (iii) exercising any right to rescind or annul an
acceleration of the principal of all the Debentures. Notwithstanding this
Section 6(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote or consent of the Holders of the Capital
Securities. Other than with respect to directing the time, method and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or the Debenture Trustee as set forth above, the Institutional Trustee shall not
take any action described in clause (i), (ii) or (iii) above, unless the
Institutional 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
Institutional Trustee fails to enforce its rights under the Declaration, to the
fullest extent permitted by law, the Holder of the Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the Declaration, without first instituting
a legal proceeding against the Institutional Trustee or any other Person.
A-I-12
Any approval or direction of the Holder 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 the Holder of the Common Securities is entitled to vote, or of
any matter upon which action by written consent of such Holder is to be taken,
to be mailed to the 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 Holder is 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 Holder 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 Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture. In addition to any requirements
under Section 11.1 of the Declaration, if any proposed amendment to the
Declaration provides for, or the Trustees otherwise propose to effect, (i) any
action that would adversely affect the powers, preferences or special rights of
the Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the Liquidation of the Trust, other than as described in Section 7.1 of the
Declaration, 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 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 Capital Securities or only the Common
Securities, then only Holders of the affected Securities will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of a Majority in liquidation
amount of such Securities.
(a) In the event the consent of the Institutional 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
Institutional 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 Institutional Trustee may only give such consent at the
written direction of the Holders of not less than the proportion in liquidation
amount of the Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
(b) Notwithstanding the foregoing, no amendment or modification may be made
to the Declaration 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 of
the Institutional Trustee or (iii) cause the Trust to be deemed an Investment
Company which is required to be registered under the Investment Company Act.
A-I-13
(c) Notwithstanding any provision of the Declaration, the right of any
Holder of the Capital Securities to receive payment of Distributions and
payments upon redemption, Liquidation 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 Capital Securities shall be entitled to
such relief as can be given either at law or equity.
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 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 Capital Securities
Pro Rata according to the aggregate liquidation amount of the Capital Securities
held by the relevant Holder relative to the aggregate liquidation amount of all
Capital Securities outstanding, and only after satisfaction of all amounts owed
to the Holders of the Capital 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 Capital 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 Capital Securities with the result that no payment of any
Distribution on, or any amount payable upon the redemption of, any Common
Security, and no payment to the Holder of any Common Security on account of the
Liquidation of the Trust, shall be made unless payment in full in cash of (i)
all accrued and unpaid Distributions on all outstanding Capital Securities for
all Distribution Periods terminating on or prior thereto, (ii) all amounts
payable upon Capital Securities then subject to redemption and (iii) all amounts
payable upon Capital Securities in the event of the Liquidation of the Trust, in
each case, shall have been made or provided for, and all funds immediately
available to the Institutional Trustee shall first be applied to the payment in
full in cash of the amounts specified in clause (i), (ii) and (iii) above that
are then due and payable.
10. Acceptance of Guarantee and Indenture. Each Holder of the Capital
Securities and the Common Securities, by the acceptance of such Securities,
agrees to the provisions of the Guarantee and the Indenture, including the
subordination provisions therein.
11. No Preemptive Rights. The Holders of the Securities shall have no, and
the issuance of the Securities is not subject to, preemptive or similar rights
to subscribe for any additional securities.
12. Miscellaneous. These terms constitute a part of the Declaration. The
Sponsor will provide a copy of the Declaration, the Guarantee and the Indenture
to a Holder without charge on written request to the Sponsor at its principal
place of business.
A-I-14
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY OR ANY INTEREST
OR PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY
BE, AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN PRIOR TO THE DATE WHICH IS THE LATER OF (i) TWO YEARS (OR
SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES
ACT) AFTER THE LATER OF (Y) THE DATE OF ORIGINAL ISSUANCE HEREOF AND (Z) THE
LAST DATE ON WHICH THE TRUST OR ANY AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE TRUST WAS THE HOLDER OF THIS SECURITY OR SUCH INTEREST OR
PARTICIPATION (OR ANY PREDECESSOR THERETO) AND (ii) SUCH LATER DATE, IF ANY, AS
MAY BE REQUIRED BY ANY SUBSEQUENT CHANGE IN APPLICABLE LAW, ONLY (A) TO THE
DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A"), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER," AS DEFINED IN RULE 144A, THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3), (7)
OR (8) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (D) PURSUANT TO OFFERS AND SALES TO NON-US PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES PURSUANT TO REGULATION S UNDER THE SECURITIES ACT OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE DEBENTURE ISSUER AND THE
TRUST PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (E)
ABOVE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE AMENDED
AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE
A-1-1
DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY OR ANY INTEREST OR
PARTICIPATION HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE,
AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF, AS THE CASE MAY BE, ALSO AGREES, REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S INVESTMENT
IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR
HOLD THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN, UNLESS SUCH
PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38,
90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF
THIS SECURITY OR SUCH INTEREST OR PARTICIPATION IS NOT PROHIBITED BY SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.
ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF OR
THEREOF, AS THE CASE MAY BE, THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF
ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH
PURCHASE AND HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER
TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
MAY BE REQUIRED BY THE AMENDED AND RESTATED DECLARATION OF TRUST TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
A-1-2
OF THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY OR
SUCH INTEREST OR PARTICIPATION, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN THIS SECURITY OR ANY INTEREST OR PARTICIPATION
HEREIN.
A-1-3
Certificate Number [_____] Number of Capital Securities [_____]
CUSIP NO [ ]
Certificate Evidencing Capital Securities
of
NPB Capital Trust IV
Capital Securities
(liquidation amount $1,000 per Capital Security)
NPB Capital Trust IV, a statutory trust created under the laws of the State
of Delaware (the "Trust"), hereby certifies that [ ] is the registered owner
(the "Holder") of ______________ capital securities of the Trust representing
undivided beneficial interests in the assets of the Trust, designated as
MMCapSSM (liquidation amount $1,000 per Capital Security) (the "Capital
Securities"). Subject to the Declaration (as defined below), the Capital
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 Capital Securities represented hereby are
issued pursuant to, and the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities shall in
all respects be subject to, the provisions of the Amended and Restated
Declaration of Trust of the Trust, dated as of March 25, 2004, among Gary L.
Rhoads and Sandra L. Spayd, as Administrators, Wilmington Trust Company, as
Delaware Trustee, Wilmington Trust Company, as Institutional Trustee, National
Penn Bancshares, Inc., 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 Capital Securities as set forth in Annex I to
the Declaration, as the same may be amended from time to time (the
"Declaration"). Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Guarantee and the Indenture to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee, and the Indenture to the
Holder without charge upon written request to the Sponsor at its principal place
of business.
By acceptance of this Certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of undivided beneficial ownership in the
Debentures.
This Certificate and the Capital Securities evidenced hereby are governed
by, and shall be construed in accordance with, the laws of the State of
Delaware, without regard to principles of conflict of laws.
A-1-4
IN WITNESS WHEREOF, the Trust has duly executed this Certificate.
NPB Capital Trust IV
By:
---------------------------------
Name:
Title: Administrator
Dated:
------------------------------
CERTIFICATE OF AUTHENTICATION
This Certificate represents Capital Securities referred to in the
within-mentioned Declaration.
WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as the Institutional Trustee
By:
---------------------------------
Authorized Officer
Dated:
------------------------------
A-1-5
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable at a
floating rate of interest per annum, which, with respect to any Distribution
Period (as defined herein), will be equal to LIBOR, as determined on the LIBOR
Determination Date for such Distribution Period (or, in the case of the first
Distribution Period, will be 1.11%), plus 2.75% (the "Coupon Rate"); provided,
however, that the Coupon Rate for any Distribution Period may not exceed the
Interest Rate (as defined in the Indenture) for the related Interest Period (as
defined in the Indenture). Distributions in arrears for more than one
Distribution Period will bear interest thereon, compounded quarterly, at the
applicable Coupon Rate for each Distribution Period thereafter (to the extent
permitted by applicable law). The term "Distributions", as used herein, includes
cash Distributions, any such compounded Distributions and any Additional Amounts
payable on the Debentures, unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Institutional Trustee and to the extent the Institutional Trustee has funds
legally available in the Property Account therefor. The amount of Distributions
payable for any Distribution Period will be computed on the basis of a 360-day
year and the actual number of days elapsed in such Distribution Period.
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears on January 7, April 7, July 7 and
October 7 of each year, commencing on July 7, 2004 (each, a "Distribution
Payment Date"), and on any earlier date of redemption, subject, in each case, to
the Business Day convention specified in the Declaration. 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 such extended interest payment period, together with all
previous and future consecutive extensions thereof, is referred to herein as an
"Extension Period") at any time and from time to time on the Debentures, subject
to the conditions described below and in the Declaration and the Indenture. No
Extension Period may end on a date other than a Distribution Payment Date or
extend beyond the Maturity Date, any Optional Redemption Date or the Special
Redemption Date, as the case may be. During any Extension Period, interest will
continue to accrue on the Debentures, and interest on such accrued interest
(such accrued interest and interest thereon referred to herein as "Deferred
Interest") will accrue, at an annual rate equal to the Coupon Rate applicable
during such Extension Period, compounded quarterly from the date such Deferred
Interest would have been payable were it not for the Extension Period, to the
extent permitted by applicable law. At the end of any Extension Period, the
Debenture Issuer shall pay all Deferred Interest then accrued and unpaid on the
Debentures; provided, however, that prior to the termination of any Extension
Period, the Debenture Issuer may further extend such Extension Period, provided,
that no Extension Period (including all previous and further consecutive
extensions that are part of such Extension Period) shall exceed 20 consecutive
quarterly periods. Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Debenture Issuer may commence a new
Extension Period, subject to the requirements set forth herein and in the
Declaration and the Indenture. No interest or Deferred Interest (except any
Additional Amounts that may be due and payable) shall be due and payable during
an Extension Period, except at the end thereof, but Deferred Interest shall
accrue upon each installment of interest that would otherwise have been due and
payable during such Extension Period until such installment is paid.
A-1-6
As a consequence of any Extension Period, Distributions will be deferred.
If Distributions are deferred, the Distributions due shall be paid on the date
that the related Extension Period terminates to Holders of the Capital
Securities as they appear on the books and records of the Trust on the regular
record date immediately preceding the Distribution Payment Date on which such
Extension Period terminates to the extent that the Trust has funds legally
available for the payment of such Distributions in the Property Account of the
Trust.
The Capital Securities shall be redeemable, and shall be entitled to the
Liquidation Distribution, as provided in the Declaration.
A-1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the
Capital Securities evidenced by this Capital Security Certificate to:
- ----------------------------
- ----------------------------
- ----------------------------
(Insert assignee's social security or tax identification number)
- ----------------------------
- ----------------------------
- ----------------------------
(Insert address and zip code of assignee),
and irrevocably appoints _______________________________________________________
as agent to transfer the Capital Securities evidenced by this Capital Security
Certificate on the books of the Trust. The agent may substitute another to act
for it, him or her.
Date:__________________
Signature:__________________
(Sign exactly as your name appears on the other side of this
Capital 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, OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.
EXCEPT AS SET FORTH IN SECTION 8.1(b) OF THE DECLARATION (AS DEFINED
BELOW), THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED.
A-2-1
Certificate Number [_____] Number of Common Securities 619
Certificate Evidencing Common Securities
of
NPB Capital Trust IV
NPB Capital Trust IV, a statutory trust created under the laws of the State
of Delaware (the "Trust"), hereby certifies that National Penn Bancshares, Inc.
is the registered owner (the "Holder") of 619 common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
(liquidation amount $1,000 per Common Security)(the "Common Securities"). The
Common Securities represented hereby are issued pursuant to, and the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust, dated
as of March 25, 2004, among Gary L. Rhoads and Sandra L. Spayd, as
Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, the Holder, 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 the Declaration, as the same may be amended from time to time (the
"Declaration"). Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Sponsor will provide a copy of the
Declaration 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 Declaration, when an Event of Default has occurred and
is continuing, the rights of the Holder 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 Capital Securities.
By acceptance of this Certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
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 Certificate and the Common Securities evidenced hereby are governed
by, and shall be 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 executed this Certificate this ___ day of
____, 2004.
NPB Capital Trust IV
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 Capital Security, which is at a floating
rate of interest per annum, which, with respect to any Distribution Period (as
defined herein), will be equal to LIBOR, as determined on the LIBOR
Determination Date for such Distribution Period (or, in the case of the first
Distribution Period, will be 1.11%), plus 2.75% (the "Coupon Rate"); provided,
however, that the Coupon Rate for any Distribution Period may not exceed the
Interest Rate (as defined in the Indenture) for the related Interest Period (as
defined in the Indenture). Distributions in arrears for more than one
Distribution Period will bear interest thereon, compounded quarterly, at the
applicable Coupon Rate for each Distribution Period thereafter (to the extent
permitted by applicable law). The term "Distributions", as used herein, includes
cash Distributions, any such compounded Distributions and any Additional Amounts
payable on the Debentures, unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Institutional Trustee and to the extent the Institutional Trustee has funds
legally available in the Property Account therefor. The amount of Distributions
payable for any Distribution Period will be computed on the basis of a 360-day
year and the actual number of days elapsed in such Distribution Period.
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 January 7, April 7, July 7 and October 7 of each
year, commencing on July 7, 2004 (each, a "Distribution Payment Date"), and on
any earlier date of redemption, subject, in each case, to the Business Day
convention specified in the Declaration. 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
such extended interest payment period, together with all previous and future
consecutive extensions thereof, is referred to herein as an "Extension Period")
at any time and from time to time on the Debentures, subject to the conditions
described below and in the Declaration and the Indenture. No Extension Period
may end on a date other than a Distribution Payment Date or extend beyond the
Maturity Date, any Optional Redemption Date or the Special Redemption Date, as
the case may be. During any Extension Period, interest will continue to accrue
on the Debentures, and interest on such accrued interest (such accrued interest
and interest thereon referred to herein as "Deferred Interest") will accrue, at
an annual rate equal to the Coupon Rate applicable during such Extension Period,
compounded quarterly from the date such Deferred Interest would have been
payable were it not for the Extension Period, to the extent permitted by
applicable law. At the end of any Extension Period, the Debenture Issuer shall
pay all Deferred Interest then accrued and unpaid on the Debentures; provided,
however, that prior to the termination of any Extension Period, the Debenture
Issuer may further extend such Extension Period, provided, that no Extension
Period (including all previous and further consecutive extensions that are part
of such Extension Period) shall exceed 20 consecutive quarterly periods. Upon
the termination of any Extension Period and upon the payment of all Deferred
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the requirements set forth herein and in the Declaration and the Indenture. No
interest or Deferred Interest (except any Additional Amounts that may be due and
payable) shall be due and payable during an Extension Period, except at the end
thereof, but Deferred Interest shall accrue upon each installment of interest
that would otherwise have been due and payable during such Extension Period
until such installment is paid.
A-2-4
As a consequence of any Extension Period, Distributions will be deferred.
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 regular record date
immediately preceding the Distribution Payment Date on which such Extension
Period terminates to the extent that the Trust has funds legally available for
the payment of such Distributions in the Property Account of the Trust.
The Common Securities shall be redeemable, and shall be entitled to the
Liquidation Distribution, as provided in the Declaration.
A-2-5
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the
Common Securities evidenced by this Common Security Certificate to:
- ----------------------------
- ----------------------------
- ----------------------------
(Insert assignee's social security or tax identification number)
- ----------------------------
- ----------------------------
- ----------------------------
(Insert address and zip code of assignee),
and irrevocably appoints as agent to transfer the Common Securities evidenced by
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 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-2-6
EXHIBIT B
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY ACCREDITED INVESTORS
----------, [ ]
National Penn Bancshares, Inc.
NPB Capital Trust IV
P.O. Box 547 Boyertown, Pennsylvania 19512
Re: Purchase of $[SPECIFY] liquidation amount of MMCapSSM
(the "Capital Securities") of NPB Capital Trust IV (the "Trust")
----------------------------------------------------------------
Ladies and Gentlemen:
In connection with our purchase of the Capital Securities, we confirm that:
1. We understand that the Capital Securities of the Trust 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 Capital Securities that, if we decide to offer, sell or otherwise
transfer any such Capital Securities prior to the date which is the later of (i)
two years (or such shorter period of time as permitted by Rule 144(k) under the
Securities Act) after the later of (Y) the date of original issuance of the
Capital Securities and (Z) the last date on which the Trust or any Affiliate (as
defined in Rule 405 under the Securities Act) of the Trust was the holder of any
such Capital Securities (or any predecessor thereto) and (ii) such later date,
if any, as may be required by any subsequent change in applicable law (the
"Resale Restriction Termination Date"), then such offer, sale or other transfer
will be made only (a) to the Company or the Trust, (b) pursuant to Rule 144A
under the Securities Act, to a person we reasonably believe is a qualified
institutional buyer under Rule 144A (a "QIB"), that purchases for its own
account or for the account of a QIB and to whom notice is given that the
transfer is being made in reliance on Rule 144A, (c) pursuant to an exemption
from registration, to an "accredited investor" within the meaning of
subparagraph (a) (1), (2), (3), (7) or (8) of Rule 501 under the Securities Act
that is acquiring any such Capital 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 offers and sales to a non-U.S.
Person that occur outside the United States pursuant to Regulation S under the
Securities Act, or (e) pursuant to another available exemption from the
registration requirements of the Securities Act, and in each of the foregoing
cases in accordance with any applicable state securities laws and any
requirements of law that govern the disposition of our property. If any resale
or other transfer of the Capital Securities is proposed to be made pursuant to
clause (c) above, the transferor shall deliver a letter from the transferee
substantially in the form of this letter to the Institutional Trustee as
Transfer Agent, which shall provide as applicable, among other things, that the
transferee is an accredited investor within the meaning of subparagraph (a)(1),
(2), (3), (7) or (8) of Rule 501 under the Securities Act that is acquiring such
B-1
Capital Securities for investment purposes and not for any distribution in
violation of the Securities Act. We acknowledge on our behalf and on behalf of
any investor account for which we are purchasing Capital Securities that the
Company and the Trust 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 National Penn
Bancshares, Inc. (the "Company") and the Trust. We understand that the
certificates for any Capital Securities that we receive prior to the Resale
Restriction Termination Date 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), (7) or (8) 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 Capital 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 Capital 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 Capital 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 Capital
Securities in violation of the Securities Act, 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 Capital Securities, we will acquire
such Capital Securities having an aggregate liquidation amount of not less than
$100,000 for our own account and for each separate account for which we are
acting.
5. We acknowledge that we either (A) are not a fiduciary of a pension,
profit-sharing or other employee benefit plan or arrangement subject to the
Employee Retirement Income Security Act of 1974, as amended, or to Section 4975
of the Internal Revenue Code of 1986, as amended (a "Plan"), or an entity whose
assets include "plan assets" by reason of any Plan's investment in the entity
and are not purchasing the Capital Securities on behalf of or with "plan assets"
by reason of any Plan's investment in the entity and are not purchasing the
Capital Securities on behalf of or with "plan assets" of any Plan or (B) are
eligible for the exemptive relief available under one or more of the following
prohibited transaction class exemptions ("PTCEs") issued by the U.S. Department
of Labor: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
6. We acknowledge that each Plan, by its purchase of the Capital
Securities, will be deemed to have directed the Trust to invest in the junior
subordinated debt securities of the Company, and to have consented to the
appointment of the institutional trustee of the Trust.
7. We acknowledge that the Company, the Trust and others will rely upon the
truth and accuracy of the foregoing acknowledgments, representations, warranties
and agreements and agree that if any of our acknowledgments, representations,
warranties and agreements are no longer accurate, we shall promptly notify the
applicable Placement Agent. If we are acquiring any Capital Securities as a
B-2
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 agreements on
behalf of each such investor account.
You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy thereof to any interested party in any
administrative or legal proceeding or other inquiry with respect to matters
covered hereby.
----------------------------------
(Name of Purchaser)
By:
-------------------------------
Date:
-----------------------------
Upon transfer, the Capital Securities should be registered in
the name of the new beneficial owner as follows.
Name:_______________________
Address:______________________
Taxpayer ID Number:_____________________
B-3
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
TO BE EXECUTED FOR QIBs
----------, [ ]
National Penn Bancshares, Inc.
NPB Capital Trust IV
P.O. Box 547 Boyertown, Pennsylvania 19512
Re: Purchase of $[SPECIFY] liquidation amount of MMCapSSM
(the "Capital Securities") of NPB Capital Trust IV (the "Trust")
----------------------------------------------------------------
Reference is hereby made to the Amended and Restated Declaration of Trust
of NPB Capital Trust IV, dated as of March 25, 2004 (the "Declaration"), among
Gary L. Rhoads and Sandra L. Spayd, as Administrators, Wilmington Trust Company,
as Delaware Trustee, Wilmington Trust Company, as Institutional Trustee,
National Penn Bancshares, Inc., as Sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Trust. Capitalized terms
used but not defined herein shall have the meanings given them in the
Declaration.
This letter relates to $[_______________] aggregate liquidation amount of
Capital Securities which are held in the name of [name of transferor] (the
"Transferor").
In accordance with Section 8.2(b) of the Declaration, the Transferor does
hereby certify that such Capital Securities are being transferred in accordance
with (i) the transfer restrictions set forth in the Capital Securities and (ii)
Rule 144A under the Securities Act ("Rule 144A"), to a transferee that the
Transferor reasonably believes is purchasing the Capital 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 thereof to any interested party in any
administrative or legal proceeding or other inquiry with respect to matters
covered hereby.
----------------------------------
(Name of Transferor)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Date:
-----------------------------
C-1
EXHIBIT D
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY NON-U.S. PERSONS
----------, [ ]
National Penn Bancshares, Inc.
NPB Capital Trust IV
P.O. Box 547 Boyertown, Pennsylvania 19512
Re: Purchase of $[SPECIFY] liquidation amount of MMCapSSM
(the "Capital Securities") of NPB Capital Trust IV (the "Trust")
----------------------------------------------------------------
Reference is hereby made to the Amended and Restated Declaration of Trust
of NPB Capital Trust IV, dated as of March 25, 2004 (the "Declaration"), among
Gary L. Rhoads and Sandra L. Spayd, as Administrators, Wilmington Trust Company,
as Delaware Trustee, Wilmington Trust Company, as Institutional Trustee,
National Penn Bancshares, Inc., as Sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Trust. Capitalized terms
used but not defined herein shall have the meanings given them in the
Declaration.
This letter relates to $[_______________] aggregate liquidation amount of
Capital Securities which are held in the name of [name of transferor].
In accordance with Section 8.2(b) of the Declaration, we do hereby certify
that (i) we are not a "U.S. person" (as such term is defined in Rule 902 under
the Securities Act), (ii) we are not acquiring the Capital Securities for the
account or benefit of any U.S. person, and (iii) the offer and sale of Capital
Securities to us constitutes an "offshore transaction" under Regulation S under
the Securities Act.
You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy thereof to any interested party in any
administrative or legal proceeding or other inquiry with respect to matters
covered hereby.
----------------------------------
(Name of Transferee)
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Date:
-----------------------------
D-1