Exhibit 4.31
AMENDED AND RESTATED DECLARATION OF TRUST
OF
GBB CAPITAL IV
Dated as of May 19, 2000
CROSS-REFERENCE TABLE*
Section of
Trust Indenture
Act of 1939, as Section of
amended Declaration
- ---------------- -----------------
310(a) ......................................................... 5.3
310(b) ......................................................... 5.3(c); 5.3(d)
311(a) ......................................................... 2.2(b)
311(b) ......................................................... 2.2(b)
312(a) ......................................................... 2.2(a)
312(b) ......................................................... 2.2(b)
313 ......................................................... 2.3
314(a) ......................................................... 2.4; 2.7(c);
......................................................... 3.6(j)
314(c) ......................................................... 2.5
315(a) ......................................................... 3.6(j); 3.9
315(b) ......................................................... 2.7(a)
315(c) ......................................................... 3.9(a)
315(d) ......................................................... 3.9(b)
316(a) ......................................................... 2.6
316(c) ......................................................... 3.6(e)
317(a) ......................................................... 3.8(e); 3.8(h)
317(b) ......................................................... 3.8(i); 7.5
318 ......................................................... 2.1
. This Cross-Reference Table does not constitute part of this
Declaration and shall not affect the interpretation of any of its
terms or provisions.
TABLE OF CONTENTS
Page
ARTICLE I INTERPRETATION AND DEFINITIONS....................................................... 2
SECTION 1.1 Definitions..................................................................... 2
ARTICLE II TRUST INDENTURE ACT.................................................................. 10
SECTION 2.1 Trust Indenture Act; Application................................................ 10
SECTION 2.2 Lists of Holders of Securities.................................................. 10
SECTION 2.3 Reports by the Property Trustee................................................. 11
SECTION 2.4 Periodic Reports to Property Trustee............................................ 11
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................ 11
SECTION 2.6 Events of Default; Waiver....................................................... 11
SECTION 2.7 Default; Notice................................................................. 13
ARTICLE III ORGANIZATION......................................................................... 13
SECTION 3.1 Name............................................................................ 13
SECTION 3.2 Office.......................................................................... 14
SECTION 3.3 Purpose......................................................................... 14
SECTION 3.4 Authority....................................................................... 14
SECTION 3.5 Title to Property of the Trust.................................................. 14
SECTION 3.6 Powers and Duties of the Administrative Trustees................................ 14
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees............................ 17
SECTION 3.8 Powers and Duties of the Property Trustee....................................... 18
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee..................... 20
SECTION 3.10 Certain Rights of Property Trustee.............................................. 22
SECTION 3.11 Delaware Trustee................................................................ 25
SECTION 3.12 Execution of Documents.......................................................... 25
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.......................... 25
SECTION 3.14 Duration of Trust............................................................... 25
SECTION 3.15 Mergers......................................................................... 25
ARTICLE IV SPONSOR.............................................................................. 28
SECTION 4.1 Sponsor's Purchase of Common Securities......................................... 28
SECTION 4.2 Responsibilities of the Sponsor................................................. 28
SECTION 4.3 Right to Proceed................................................................ 28
i
TABLE OF CONTENTS
(continued)
Page
SECTION 4.4 Right to Dissolve Trust......................................................... 29
ARTICLE V TRUSTEES............................................................................. 29
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee................................... 29
SECTION 5.2 Delaware Trustee................................................................ 29
SECTION 5.3 Property Trustee; Eligibility................................................... 30
SECTION 5.4 Certain Qualifications of Administrative Trustees and
Delaware Trustee Generally...................................................... 31
SECTION 5.5 Administrative Trustees......................................................... 31
SECTION 5.6 Appointment, Removal and Resignation of Trustees................................ 32
SECTION 5.7 Vacancies among Trustees........................................................ 33
SECTION 5.8 Effect of Vacancies............................................................. 34
SECTION 5.9 Meetings........................................................................ 34
SECTION 5.10 Delegation of Power............................................................. 34
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business..................... 35
ARTICLE VI DISTRIBUTIONS........................................................................ 35
SECTION 6.1 Distributions................................................................... 35
ARTICLE VII ISSUANCE OF SECURITIES............................................................... 35
SECTION 7.1 General Provisions Regarding Securities......................................... 35
SECTION 7.2 Execution and Authentication.................................................... 36
SECTION 7.3 Form and Dating................................................................. 37
SECTION 7.4 Registrar, Paying Agent and Exchange Agent...................................... 38
SECTION 7.5 Paying Agent to Hold Money in Trust............................................. 39
SECTION 7.6 Replacement Securities.......................................................... 39
SECTION 7.7 Outstanding Capital Securities.................................................. 39
SECTION 7.8 Capital Securities in Treasury.................................................. 40
SECTION 7.9 Temporary Securities............................................................ 40
SECTION 7.10 Cancellation.................................................................... 41
SECTION 7.11 CUSIP Numbers................................................................... 41
ARTICLE VIII DISSOLUTION OF TRUST................................................................. 41
SECTION 8.1 Dissolution of Trust............................................................ 41
ii
TABLE OF CONTENTS
(continued)
Page
ARTICLE IX TRANSFER OF INTERESTS................................................................ 42
SECTION 9.1 Transfer of Securities.......................................................... 42
SECTION 9.2 Transfer Procedures and Restrictions............................................ 43
SECTION 9.3 Deemed Security Holders......................................................... 53
SECTION 9.4 Book-Entry Interests............................................................ 53
SECTION 9.5 Notices to Clearing Agency...................................................... 54
SECTION 9.6 Appointment of Successor Clearing Agency........................................ 54
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS................. 54
SECTION 10.1 Liability....................................................................... 55
SECTION 10.2 Exculpation..................................................................... 55
SECTION 10.3 Fiduciary Duty.................................................................. 55
SECTION 10.4 Indemnification................................................................. 56
SECTION 10.5 Outside Businesses.............................................................. 59
ARTICLE XI ACCOUNTING........................................................................... 60
SECTION 11.1 Fiscal Year..................................................................... 60
SECTION 11.2 Certain Accounting Matters...................................................... 60
SECTION 11.3 Banking......................................................................... 61
SECTION 11.4 Withholding..................................................................... 61
ARTICLE XII AMENDMENTS AND MEETINGS.............................................................. 61
SECTION 12.1 Amendments...................................................................... 61
SECTION 12.2 Meetings of the Holders; Action by Written Consent.............................. 63
ARTICLE XIII REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE............................. 65
SECTION 13.1 Representations and Warranties of Property Trustee.............................. 65
SECTION 13.2 Representations and Warranties of Delaware Trustee.............................. 65
ARTICLE XIV REGISTRATION RIGHTS.................................................................. 66
SECTION 14.1 Registration Rights Agreement; Liquidated Damages............................... 66
ARTICLE XV MISCELLANEOUS........................................................................ 67
SECTION 15.1 Notices......................................................................... 67
SECTION 15.2 Governing Law................................................................... 68
iii
TABLE OF CONTENTS
(continued)
Page
SECTION 15.3 Intention of the Parties........................................................ 68
SECTION 15.4 Headings........................................................................ 68
SECTION 15.5 Successors and Assigns.......................................................... 68
SECTION 15.6 Partial Enforceability.......................................................... 68
SECTION 15.7 Counterparts.................................................................... 69
ANNEX 1 TERMS OF 10.75% CAPITAL SECURITIES SERIES A / SERIES B 10.75% COMMON SECURITIES...... I-1
EXHIBIT A-1 Form of Capital Security Certificate................................................. A1-1
EXHIBIT A-2 Form of Common Security Certificate.................................................. A2-1
iv
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
GBB CAPITAL IV
Dated as of May 19, 2000
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of May 19, 2000, by and among the Trustees (as defined herein), the
Sponsor (as defined herein) and the Holders (as defined herein), from time to
time, of undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration;
WHEREAS, the Delaware Trustee (as defined herein) and the Sponsor
established GBB Capital IV (the "Trust"), a trust created under the Delaware
Business Trust Act pursuant to a Declaration dated as of April 11, 2000 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on April 11, 2000, for the sole purpose of
issuing and selling certain securities representing undivided beneficial
interests in the assets of the Trust, investing the proceeds thereof in certain
Debentures of the Debenture Issuer (each as hereinafter defined), and engaging
in only those activities necessary, advisable or incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
ratify the actions of each Trustee taken prior to the date hereof;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this 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, agree as follows:
1
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;4
(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 has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires;
(f) a term defined in the Indenture (as defined herein) has the
same meaning when used in this Declaration unless otherwise defined in this
Declaration or the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" has the meaning set forth in Section
----------------------
5.1.
"Affiliate" has the same meaning as given to that term in Rule
---------
405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange Agent.
-----
"Authorized Officer" of a Person means any other Person that is
------------------
authorized to legally bind such former Person.
"Book-Entry Interest" means a beneficial interest in the Global
-------------------
Capital Security registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
2
"Business Day" means any day other than a Saturday, a Sunday, or
------------
a day on which banking institutions in Wilmington, Delaware, San Francisco,
California or New York, New York, are authorized or required by law or executive
order to remain closed.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S) 3801 et seq., as it may be amended from time to time, or
-------
any successor legislation.
"Capital Securities" means, collectively, the Series A Capital
------------------
Securities and the Series B Capital Securities.
"Capital Securities Guarantee" means, collectively, the Series A
----------------------------
Capital Securities Guarantee and the Series B Capital Securities Guarantee.
"Capital Security Beneficial Owner" means, with respect to a
---------------------------------
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Security Certificate" has the meaning set forth in
----------------------------
Section 9.4.
"Clearing Agency" means an organization registered as a "Clearing
---------------
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Capital Securities and in whose name or in the name of a nominee of that
organization shall be registered a global certificate and which shall undertake
to effect book entry transfers and pledges of the Capital Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Time" means the "Closing Time" as defined in the
------------
Purchase 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 as from time to time constituted, or if at any time after the
execution of this Declaration such Commission is not existing and performing the
duties now assigned to it under applicable federal securities laws, then the
body performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
-----------------
"Common Security Certificate" means a certificate evidencing
---------------------------
ownership of Common Securities, substantially in the form attached as Exhibit A-
2.
3
"Common Securities Guarantee" means the Common Securities
---------------------------
Guarantee Agreement, dated as of the Closing Time, entered into by Greater Bay
Bancorp, with respect to the Common Securities.
"Common Securities Subscription Agreement" means the Common
----------------------------------------
Securities Subscription Agreement, dated as of the Closing Time, between the
Trust and Greater Bay Bancorp relating to the Common Securities.
"Company Indemnified Person" means (a) any Administrative
--------------------------
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or agents
of any Administrative Trustee; or (d) any officer, employee or agent of the
Trust or its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee
----------------------
at which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Greater Bay Bancorp, a California
----------------
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Subscription Agreement" means the Debenture
--------------------------------
Subscription Agreement, dated as of the Closing Time, between the Debenture
Issuer and the Trust in respect of the Series A Debentures.
"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, collectively, the Series A Debentures and the
----------
Series B Debentures.
"Default" means an event, act or condition that with notice or
-------
lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" has the meaning set forth in
-----------------------------
Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.1.
----------------
"Direct Action" has the meaning set forth in Section 3.8(e).
-------------
4
"Distribution" means a distribution payable to Holders in
------------
accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
---
Agency.
"Event of Default" with respect to the Securities means an Event
----------------
of Default (as defined in the Indenture) that has occurred and is continuing
with respect to the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4.
--------------
"Exchange Offer" means the offer that may be made pursuant to the
--------------
Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer to
exchange Series B Debentures for Series A Debentures and to execute the Series B
Capital Securities Guarantee in respect of the Series B Capital Securities.
"Federal Reserve Board" means the Board of Governors of the
---------------------
Federal Reserve System.
"Fiduciary Indemnified Person" has the meaning set forth in
----------------------------
Section 10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
-----------
"Global Capital Security'' has the meaning set forth in Section
----------------------
7.3(a).
"Holder" means a Person in whose name a Security or Successor
------
Security is registered on the register maintained by or on behalf of the
Registrar, such Person being a beneficial owner of the Trust within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
------------------
Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of the Closing Time,
---------
between the Debenture Issuer and the Debenture Trustee, as amended from time to
time.
"Initial Optional Redemption Date" has the meaning set forth in
--------------------------------
Section 4(b) of Annex I hereto.
"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.
5
"Investment Company Event" has the meaning set forth in Section 4(c)
------------------------
of Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Like Amount" has the meaning set forth in Section 3 of Annex I
-----------
hereto.
"Liquidated Damages Agreement" means the Liquidated Damages Agreement,
----------------------------
dated as of May 16, 2000, by and among the Debenture Issuer, the Trust and the
Initial Purchaser named therein, as amended from time to time.
"List of Holders" has the meaning set forth in Section 2.2(a).
---------------
"Majority in Liquidation Amount" means, with respect to the Trust
------------------------------
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holders of outstanding Trust 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, excluding the Trust and the Debenture Issuer and any Affiliate thereof,
who are the record owners of more than 50% of the aggregate liquidation amount
(including the amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to but excluding the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.
"Offering Memorandum" has the meaning set forth in Section
-------------------
3.6(b)(i).
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by an Authorized Officer of such Person. Any Officers'
Certificate delivered by the Trust shall be signed by at least one
Administrative Trustee. 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 officer signing the Certificate has read the
covenants or conditions and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether or not, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be an
------------------
employee of the Sponsor, and who shall be acceptable to the Property Trustee.
"Participants" has the meaning specified in Section 7.3(b).
------------
6
"Paying Agent" has the meaning specified in Section 7.4.
------------
"Payment Amount" has the meaning specified in Section 6.1.
--------------
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PORTAL" has the meaning set forth in Section 3.6(b)(iii).
------
"Property Trustee" has the meaning set forth in Section 5.3(a).
----------------
"Property Trustee Account" has the meaning set forth in Section
------------------------
3.8(c)(i).
"Purchase Agreement" means the Purchase Agreement relating to the
------------------
Series A Capital Securities, dated May 16, 2000, by and among the Trust, the
Debenture Issuer and the Initial Purchaser named therein.
"QIBs" shall mean qualified institutional buyers as defined in Rule
----
144A.
"Quorum" means a majority of the Administrative Trustees or, if there
------
are only two Administrative Trustees, both of them.
"Redemption Price" has the meaning set forth in Section 4(a) of
----------------
Annex I hereto.
"Registrar" has the meaning set forth in Section 7.4.
---------
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement, dated as of May 16, 2000, by and among the Trust, the Debenture
Issuer and the Initial Purchaser named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in the
----------------------
Registration Rights Agreement.
"Regulatory Capital Event" has the meaning set forth in Section 4(c)
------------------------
of Annex I hereto.
"Related Party" means, with respect to the Sponsor, any direct or
-------------
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means any officer within the Corporate Trust
-------------------
Office of the Property Trustee with direct responsibility for the administration
of this Declaration and also means, with respect to a particular corporate trust
matter, any other officer of the Property
7
Trustee to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
"Restricted Capital Security" means a Capital Security required by
---------------------------
Section 9.2 to contain a Restricted Securities Legend.
"Restricted Definitive Capital Securities" has the meaning set forth
----------------------------------------
in Section 7.3(c).
"Restricted Securities Legend" has the meaning set forth in Section
----------------------------
9.2(i).
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
---------
successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such rule may
--------
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such rule may
---------
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.
"Securities" or "Trust 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 Guarantees" means the Common Securities Guarantee and
---------------------
the Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in Section
---------------------------
7.1(a).
"Series A Capital Securities Guarantee" means the Series A Capital
-------------------------------------
Securities Guarantee Agreement, dated as of the Closing Time, by, Greater Bay
Bancorp in respect of the Series A Capital Securities.
"Series A Debentures" means the 10.75% Junior Subordinated Deferrable
-------------------
Interest Debentures due June 1, 2030, Series A, of the Debenture Issuer issued
pursuant to the Indenture.
"Series B Capital Securities" has the meaning specified in Section
---------------------------
7.1(a).
"Series B Capital Securities Guarantee" means the Series B Capital
-------------------------------------
Securities Guarantee Agreement to be entered into in connection with the
Exchange Offer by Greater Bay Bancorp, in respect of the Series B Capital
Securities.
8
"Series B Debentures" means the 10.75% Junior Subordinated Deferrable
-------------------
Interest Debentures due June 1, 2030, Series B, of the Debenture Issuer to be
issued pursuant to the Indenture in connection with the Exchange Offer.
"Special Event" has the meaning set forth in Section 4(c) of Annex I
-------------
hereto.
"Special Event Redemption Price" has the meaning set forth in
------------------------------
Section 4(c) of Annex I hereto.
"Sponsor" means Greater Bay Bancorp, a California corporation, or any
-------
successor entity resulting from any merger, consolidation, amalgamation or other
business combination, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
--------------------------
5.6(b)(ii).
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
----------------
"Successor Property Trustee" has the meaning set forth in Section
--------------------------
3.8(f)(ii).
"Successor Securities" has the meaning set forth in Section
--------------------
3.15(b)(i).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"Tax Event" has the meaning set forth in Section 4(c) of Annex I
---------
hereto.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated under the Code by the United
States Treasury Department, 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.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in
--------------
or owing to the Property Trustee Account and (c) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to this Declaration.
"Trustee" or "Trustees" means each Person who has signed this
------- --------
Declaration as a trustee, so long as such Person shall continue as a trustee of
the Trust 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.
"10% in Liquidation Amount" means, with respect to the Trust
-------------------------
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holders of outstanding Trust Securities voting together as
a single class or, as the context may require,
9
Holders of outstanding Capital Securities or Holders of outstanding Common
Securities voting separately as a class, excluding the Trust and the Debenture
Issuer and any Affiliate thereof, who are the record owners of 10% or more of
the aggregate liquidation amount (including the amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Unrestricted Global Capital Security" has the meaning set forth in
------------------------------------
Section 9.2(b).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration in order for this
Declaration to be qualified under the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities, (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that, neither the Sponsor nor the
-------- ----
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time that the List of Holders does not differ from
the most recent List of Holders given to the Property Trustee by the Sponsor and
the Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
-------- ----
Holders previously given to it on receipt of a new List of Holders.
10
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
-------------------------------
By July 31 of each year, commencing July 31, 2001, the Property
Trustee shall provide to the Holders of the Capital Securities such reports as
are required by (S) 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by (S) 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of (S) 313(d) of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Property Trustee.
------------------------------------
Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide to the Property Trustee and the Commission such
documents, reports and information as are required by (S) 314 (if any) of the
Trust Indenture Act and shall provide to the Property Trustee the compliance
certificate required by (S) 314 of the Trust Indenture Act in the form, in the
manner and at the times required by (S) 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent provided for in this Declaration that relate to any of
the matters set forth in (S) 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to (S) 314(c)(1) of the
Trust Indenture Act may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in Liquidation Amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
-------- ----
the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in aggregate principal amount of the holders of the Debentures (a
"Super Majority") to be waived under the Indenture, the Event of
Default under the Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount
of the Capital Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded
11
from this Declaration and the Securities, as permitted by the Trust Indenture
Act. Upon such waiver, any such Default shall cease to exist, and any Event of
Default with respect to the Capital Securities arising therefrom shall be deemed
to have been cured, for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other Default or an Event of Default with
respect to the Capital Securities or impair any right consequent thereon. Any
waiver by the Holders of the Capital Securities of an Event of Default with
respect to the Capital Securities shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Event of Default with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed
to have waived such Event of Default under the Declaration as provided
below in this Section 2.6(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the Common
Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
- -------- -------
any such Event of Default and all Events of Default with respect to the Common
Securities and their consequences if all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such (S)(S)
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such Default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other Default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the
12
corresponding Event of Default under this Declaration. The foregoing provisions
of this Section 2.6(c) shall be in lieu of (S) 316(a)(1)(B) of the Trust
Indenture Act and such (S) 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act.
SECTION 2.7 Default; Notice.
---------------
(a) The Property Trustee shall, within 90 days after a
Responsible Officer has actual knowledge of the occurrence of a Default with
respect to the Securities, transmit by mail, first class postage prepaid, to the
Holders, notices of all such Defaults, unless such Defaults have been cured
before the giving of such notice or previously waived; provided, however, that
-------- -------
except in the case of a Default arising from the nonpayment of principal of or
interest (including Compounded Interest and Additional Sums (as such terms are
defined in the Indenture), if any) or Liquidated Damages, if any (as defined in
the Registration Rights Agreement), on any of the Debentures, the Property
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer in good faith determines that the withholding of such notice
is in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have knowledge
of any Default or Event of Default except:
(i) a Default or Event of Default under Sections 5.1(a)
(other than the payment or nonpayment of Compounded Interest,
Additional Sums and Liquidated Damages) and 5.1(b) of the
Indenture; or
(ii) any Default or Event of Default as to which the
Property Trustee shall have received written notice or of which a
Responsible Officer charged with the administration of the
Declaration shall have actual knowledge.
(c) Within ten Business Days after a Responsible Officer has
actual knowledge of the occurrence of any Event of Default, the Property Trustee
shall transmit notice of such Event of Default to the Holders of the Capital
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to
whether or not they are in compliance with all the conditions and covenants
applicable to them under this Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named GBB Capital IV as such name may be modified
from time to time by the Administrative Trustees following written notice to the
Delaware Trustee, the Property Trustee and the Holders. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.
13
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o Greater
Bay Bancorp, 2860 West Bayshore Road, Palo Alto, California 94303. On ten
Business Days' prior written notice to the Delaware Trustee, the Property
Trustee and the Holders of Securities, the Administrative Trustees may designate
another principal office.
SECTION 3.3 Purpose.
-------
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities, (b) use the proceeds from the sale of the Securities
to acquire the Debentures, and (c) except as otherwise limited herein, to engage
in only those other activities necessary, advisable or incidental thereto,
including without limitation, those activities specified in Sections 3.6, 3.8,
3.9, 3.10, 3.11 and/or 3.12. The Trust shall not borrow money, issue debt or
reinvest proceeds derived from investments, mortgage or 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 3.4 Authority.
---------
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by one or more of the Administrative Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust and an
action taken by the Property Trustee on behalf of the Trust in accordance with
its powers shall constitute the act of and serve to bind the Trust. In dealing
with the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Debentures
and the Property Trustee 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 3.6 Powers and Duties of the Administrative Trustees.
------------------------------------------------
Subject to Section 5.5, the Administrative Trustees acting
individually or together shall have the exclusive right, power, duty and
authority, and are hereby authorized and directed, to cause the Trust to engage
in the following activities:
(a) to execute, enter into and deliver the Common Securities
Subscription Agreement and to execute, deliver, issue and sell the Securities in
accordance with this Declaration; provided, however, that except as contemplated
-------- -------
in Section 7.1(a), (i) the Trust may issue no more than one series of Capital
Securities and no more than one series of Common
14
Securities, (ii) there shall be no interests in the Trust other than the
Securities, and (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both Capital Securities and Common Securities at the
Closing Time;
(b) in connection with the issue and sale of the Capital Securities
and the consummation of the Exchange Offer, at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, an offering memorandum
(the "Offering Memorandum") in preliminary and final form prepared by
the Sponsor, in relation to the offering and sale of Series A Capital
Securities to QIBs in reliance on Rule 144A and to institutional
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act), and to execute and file with the
Commission, at such time as is determined by the Sponsor, any
Registration Statement, including any amendments thereto, as
contemplated by the Registration Rights Agreement;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Capital Securities in any State
in which the Sponsor has determined to qualify or register such
Capital Securities for sale;
(iii) execute and file an application, prepared by the Sponsor,
to permit the Capital Securities to trade or be quoted or listed in or
on the Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market or any other securities exchange, quotation
system or the Nasdaq Stock Market's National Market;
(iv) execute, enter into, deliver and perform the Common
Securities Subscription Agreement, the Purchase Agreement, the
Registration Rights Agreement, the Liquidated Damages Agreement and
letters, documents or instruments with DTC and other Clearing Agencies
relating to the Capital Securities; and
(v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Capital
Securities under Section 12(b) or 12(g) of the Exchange Act, as the
case may be.
(c) to execute, enter into and deliver the Debenture Subscription
Agreement, to acquire the Series A Debentures with the proceeds of the sale of
the Series A Capital Securities and the Common Securities and to exchange the
Series A Debentures for a like principal amount of Series B Debentures, pursuant
to the Exchange Offer; provided, however, that the Administrative Trustees shall
-------- -------
cause legal title to the Debentures to be held of record in the name of the
Property Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event;
15
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including and with
respect to, for the purposes of (S) 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders with respect to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;
(g) to the fullest extent permitted by law, to bring or defend, pay,
collect, compromise, arbitrate, resort to legal action, or otherwise adjust
claims or demands of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e), the Property Trustee has the exclusive power to bring such Legal
Action;
(h) to employ or otherwise engage employees, agents (who may be
designated as officers with titles), managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S) 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar and
Exchange Agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and to the
Holders 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;
(n) 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 business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to enable the Trust
to effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but not limited to:
16
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to continue to be classified for
United States federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes;
(p) to take all action necessary to consummate the Exchange
Offer or otherwise cause the Capital Securities to be registered pursuant to an
effective registration statement in accordance with the provisions of the
Registration Rights Agreement;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Administrative Trustees, on
behalf of the Trust; and
(r) to execute and deliver all documents, agreements,
certificates and instruments, exercise all rights and powers, perform all duties
and do all things for and on behalf of the Trust in all matters necessary,
advisable or incidental to the foregoing or the transactions contemplated
thereby.
The Administrative Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant to
this Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
The Trust shall not, and the Trustees (including the Property
Trustee and the Delaware Trustee) shall not, and the Administrative Trustees
shall cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. Notwithstanding any provision in this
Declaration to the contrary, the Trust shall not:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
17
(iii) possess Trust Property for other than a Trust purpose
or execute any mortgage in respect of, or pledge, any Trust
Property;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust Property or the terms of the Securities in any
way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(vii) other than as provided in this Declaration or Annex I
hereto, (A) direct the time, method and place of conducting any
proceeding with respect to any remedy available to the Debenture
Trustee, or exercising any trust or power conferred upon the
Debenture Trustee with respect to the Debentures, (B) waive any
past default that is waivable under the Indenture, or (C)
exercise any right to rescind or annul any declaration that the
principal of all the Debentures shall be due and payable; or
(viii) 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 an opinion of
independent tax counsel experienced in such matters to the effect
that such amendment, modification or termination will not cause
more than an insubstantial risk that the Trust will not be
classified as a grantor trust for United States federal income
tax purposes.
SECTION 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Property Trustee in trust for the benefit of the
Trust and the Holders. The right, title and interest of the Property Trustee to
the Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.6. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee Account") in the
name of and under the exclusive control of the Property Trustee
on behalf of the Holders and, upon the receipt of payments of
funds made in respect of the Debentures held by the Property
Trustee, deposit such funds into the Property Trustee Account and
18
make payments or cause the Paying Agent to make payments to the
Holders from the Property Trustee Account in accordance with
Section 6.1; funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration;
and the Property Trustee Account shall be an account that is
maintained with a banking institution the rating on whose long-
term unsecured indebtedness by a "nationally recognized
statistical rating organization," as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least
equal to the rating assigned to the Capital Securities, unless
the Capital Securities are not rated, in which case the banking
institution's long-term unsecured indebtedness shall be rated at
least investment grade by a "nationally recognized statistical
rating organization;"
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the
Securities to the extent the Debentures are redeemed or mature;
and
(iii) upon written notice of distribution issued by the
Administrative Trustees 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 upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of this Declaration and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take
any Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer has actual knowledge or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act; and if
the Property Trustee shall have failed to take such Legal Action following a
written request from the Holders, the Holders of the Capital Securities may, to
the fullest extent permitted by law, take such Legal Action, to the same extent
as if such Holders of Capital Securities held an aggregate principal amount of
Debentures equal to the aggregate liquidation amount of such Capital Securities,
without first proceeding against the Property Trustee or the Trust; 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 the
principal of or interest (including Compounded Interest and Additional Sums, if
any) or Liquidated Damages, if any, on the Debentures on the date such principal
or interest (including Compounded Interest and Additional Sums, if any) or
Liquidated Damages, if any, is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Capital Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest (including Compounded Interest and Additional Sums, if
any) or Liquidated Damages, if any, 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 Holders of the Common
Securities will be subrogated to the rights of such Holder of Capital
19
Securities to the extent of any payment made by the Debenture Issuer to such
Holder of Capital Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders pursuant
to the terms of the Securities and this Declaration; or
(ii) a successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.6 (a
"Successor Property Trustee").
(g) The Property Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer
occurs and is continuing, the Property Trustee shall, for the benefit of
Holders, enforce its rights as holder of the Debentures subject to the rights of
the Holders pursuant to the terms of this Declaration and the Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in (S) 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with (S) 317(b) of the Trust Indenture Act. Any such
additional Paying Agent may be removed by the Property Trustee at any time the
Property Trustee remains as Paying Agent and a successor Paying Agent or
additional Paying Agents may be (but are not required to be) appointed at any
time by the Property Trustee while the Property Trustee is acting as Paying
Agent.
(j) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the contrary in
this Declaration or any Annex or Exhibit hereto, (i) the Property Trustee must
exercise the powers set forth in this Section 3.8 in a manner that is consistent
with the purposes and functions of the Trust set out in Section 3.3, and (ii)
the Property Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default (of which, other than in the case of Events of Default under Sections
5.1(a) and 5.1(b) of the Indenture, which the Property Trustee is deemed to have
knowledge of as provided in Section
20
2.7(b) hereof, a Responsible Officer of the Property Trustee has actual
knowledge) and after the curing or waiving of all such Events of Default that
may have occurred, shall undertake to perform only such duties as are
specifically set forth in this Declaration and in the Securities and no implied
covenants shall be read into this Declaration against the Property Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) of which a Responsible Officer has actual knowledge,
the Property Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default (of
which, other than in the case of Events of Default under Sections
5.01(a) and 5.01(b) of the Indenture, which the Property Trustee
is deemed to have knowledge of as provided in Section 2.7(b)
hereof, a Responsible Officer of the Property Trustee has actual
knowledge) and after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
Declaration and in the Securities and the Property Trustee
shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration and in the Securities, and no implied covenants
or obligations shall be read into this Declaration against
the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively
rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or
opinions furnished to the Property Trustee and conforming to
the requirements of this Declaration; provided, however,
-------- -------
that in the case of any such certificates or opinions that
by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine
whether or not on their face they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the
21
direction of the Holders of a Majority in Liquidation Amount of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon
the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers;
(v) the Property Trustee's sole duty with respect to the
custody, safekeeping and physical preservation of the Debentures
and the Property Trustee Account shall be to deal with such
property in a similar manner as the Property Trustee deals with
similar property for its own account, subject to the protections
and limitations on liability afforded to the Property Trustee
under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise
agree in writing with the Sponsor. Money held by the Property
Trustee need not be segregated from other funds held by it except
in relation to the Property Trustee Account maintained by the
Property Trustee pursuant to Section 3.8(c)(i) and except to the
extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Sponsor with their respective duties under this Declaration, nor
shall the Property Trustee be liable for any default or
misconduct of the Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
----------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, 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;
22
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Declaration may be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
the Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any
action hereunder, the Property Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith
on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax
or securities laws) or any rerecording, refiling or registration
thereof;
(v) the Property Trustee may consult with counsel or
other experts of its selection, and the advice or opinion of such
counsel and experts with respect to legal matters or advice
within the scope of such experts' area of expertise shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion; such counsel may
be counsel to the Sponsor or any of its Affiliates, and may
include any of its employees; and the Property Trustee shall have
the right at any time to seek instructions concerning the
administration of this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless
such Holder shall have provided to the Property Trustee security
and indemnity, reasonably satisfactory to the Property Trustee,
against the costs, expenses (including reasonable attorneys' fees
and expenses and the expenses of the Property Trustee's agents,
nominees or custodians) and liabilities that might be incurred by
it in complying with such request or direction, including such
reasonable advances as may be requested by the Property Trustee;
provided, however, that, nothing contained in this Section 3.10
-------- -------
(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default (of which, other than in the
case of Events of Default under Sections 5.01(a) and 5.01(b) of
the Indenture, which the Property Trustee is deemed to have
knowledge of as provided in Section 2.7(b) hereof, a Responsible
Officer of the Property Trustee has actual knowledge), of its
obligation to exercise the rights and powers vested in it by this
Declaration;
23
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Property Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see
fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents, custodians, nominees or attorneys, and
the Property Trustee shall not be responsible for any misconduct
or negligence on the part of any such agent, custodian, nominee
or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders, and the
signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third
party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of
the terms and provisions of this Declaration, both of which shall
be conclusively evidenced by the Property Trustee's or its
agent's taking such action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Property Trustee (i) may
request instructions from the Holders which instructions may only
be given by the Holders of the same proportion in liquidation
amount of the Securities as would be entitled to direct the
Property Trustee under the terms of the 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 protected in
conclusively relying on or acting in accordance with such
instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good
faith, without negligence or willful misconduct, and reasonably
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable
24
law, to perform any such act or acts, or to exercise any such right, power, duty
or obligation. No permissive power or authority available to the Property
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration (except as
required under the Business Trust Act). Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of (S) 3807 of the Business Trust Act. In the event
the Delaware Trustee shall at any time be required to take any action or perform
any duty hereunder, the Delaware Trustee shall be entitled to the benefits of
Section 3.9(b)(ii) to (viii), inclusive, and Section 3.10. No implied covenants
or obligations shall be read into this Declaration against the Delaware Trustee.
The duties of the Delaware Trustee shall be limited to (a) accepting legal
process served on the Trust in the State of Delaware and (b) the execution of
any certificates required to be filed with the Delaware Secretary of State which
the Delaware Trustee is required to execute under Section 3811 of the Business
Trust Statute. To the extent that, at law or in equity, the Delaware Trustee has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or the Holders, it is hereby understood and agreed by the other parties
hereto and the Holders that such duties and liabilities are replaced by the
duties and liabilities of the Delaware Trustee expressly set forth in this
Agreement.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise required by applicable law, each Administrative
Trustee, individually, is authorized to execute and deliver on behalf of the
Trust any documents, agreements, instruments or certificates that the
Administrative Trustees have the power and authority to execute pursuant to
Section 3.6.
SECTION 3.13 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 or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless earlier dissolved pursuant to the provisions of
Article VIII hereof, shall dissolve on June 1, 2035.
SECTION 3.15 Mergers.
-------
(a) The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as
25
an entirety to any Person, except as described in Section 3.15(b) and (c) and
except with respect to the distribution of Debentures to Holders pursuant to
Section 8.1(a)(iii) of this Declaration or Section 3 of Annex I.
(b) The Trust may, at the request of the Sponsor, with the consent of
the Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge with or into, consolidate, amalgamate, 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) 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 long as the Successor Securities rank the same as
the Securities rank in priority with respect to Distributions and
payments upon liquidation, redemption and otherwise ;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property
Trustee with respect to the Debentures;
(iii) the Successor Securities (excluding any securities
substituted for the Common Securities) are listed, quoted or included
for trading, or any Successor Securities will be listed, quoted or
included for trading upon notification of issuance, on any national
securities exchange or with any other organization on which the
Capital Securities are then listed, quoted or included;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Securities
(including any Successor Securities) or the Debentures to be
downgraded by any nationally recognized statistical rating
organization that publishes a rating on the Capital Securities or the
Debentures;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders (including the holders of
any Successor Securities) in any material respect (other than with
respect to any dilution of the interests of such Holders or holders,
as the case may be, in the Successor Entity);
26
(vi) the Successor Entity has a purpose substantially identical
to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Sponsor has received
an opinion of 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 (including the
holders of any Successor Securities) in any material respect
(other than with respect to any dilution of the interests of such
Holders or holders, as the case may be, 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; 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 or any permitted successor or assignee of the
Sponsor owns all of the common securities of the Successor Entity and
guarantees the obligations of the Successor Entity under the Successor
Securities at least to the extent provided by the Securities
Guarantees; and
(ix) there shall have been furnished to the Property Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect
that all conditions precedent in this Declaration to such transaction
have been satisfied.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by, 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 the Successor Entity not to be classified as a grantor
trust for United States federal income tax purposes.
27
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
At the Closing Time, pursuant to the Common Securities
Subscription Agreement, the Sponsor will purchase all of the Common Securities
then issued by the Trust, in an amount equal to at least 3% of the total capital
of the Trust, at the same time as the Series A Capital Securities are issued and
sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Capital Securities,
the Sponsor shall have the exclusive right and responsibility to engage in, or
direct the Administrative Trustees to engage in, the following activities:
(a) to prepare the Offering Memorandum, in preliminary and final
form, and to prepare for filing by the Trust with the Commission any
Registration Statement, including any amendments thereto, as contemplated by the
Registration Rights Agreement;
(b) to determine the States 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 or advisable in order to comply with the applicable laws of any such
States;
(c) if deemed necessary or advisable by the Sponsor, to prepare
for filing by the Trust an application to permit the Capital Securities to trade
or be quoted or listed in or on the PORTAL Market, or any other securities
exchange, quotation system or the Nasdaq Stock Market's National Market;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any amendments thereto, relating
to the registration of the Capital Securities under Section 12(b) or 12(g) of
the Exchange Act, as the case may be, including any amendments thereto; and
(e) to negotiate the terms of, execute, enter into and deliver
the Purchase Agreement, the Registration Rights Agreement and the Liquidated
Damages Agreement.
SECTION 4.3 Right to Proceed.
----------------
The Sponsor acknowledges the rights of the Holders of Capital
Securities, in the event that a failure of the Trust to pay Distributions on the
Capital Securities is attributable to the failure of the Debenture Issuer to pay
the principal of or interest on the Debentures, to institute a proceeding
directly against the Debenture Issuer for enforcement of its payment obligations
in respect of the Debentures.
28
SECTION 4.4 Right to Dissolve Trust.
-----------------------
The Sponsor will have the right at any time to dissolve the Trust
and, after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Debentures to be distributed to the Holders in
liquidation of the Trust. Such right is subject to the Sponsor's having received
(i) an Opinion of Counsel to the effect that such distribution will not cause
the Holders of Capital Securities to recognize gain or loss for United States
federal income tax purposes and (ii) all required regulatory approvals.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees; Appointment of Co-Trustee.
---------------------------------------------
The number of Trustees initially shall be five (5), 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 Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
- -------- -------
two (2); provided further that (1) one Trustee, in the case of a natural
-------- -------
person, shall be a person who is a resident of the State of Delaware or that, if
not a natural person, is an entity which has its principal place of business in
the State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with, the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an Event
of Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the time be located,
the Holders of a Majority in Liquidation Amount of the Common Securities acting
as a class at a meeting of the Holders of the Common Securities, and the
Administrative Trustees shall have power to appoint one or more Persons either
to act as a co-trustee, jointly with the Property Trustee, of all or any part of
the Trust Property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of this Declaration. In case an Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make any such
appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
----------------
For so long as required by the Business Trust Act, the Delaware
Trustee shall be:
29
(a) a natural person who is a resident of the State of Delaware;
or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided, however, that, if the Property Trustee has its principal place of
- -------- -------
business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
SECTION 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an indenture trustee
under the Trust Indenture Act, 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,
territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of
this Section 5.3(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of (S) 330(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as if it were
the obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
30
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in (S) 310 (b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
--------------------------------------------------------------
Trustee Generally.
-----------------
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Administrative Trustees.
-----------------------
The initial Administrative Trustees shall be:
Steven C. Smith
Shawn E. Saunders
Mark Eschen
c/o Greater Bay Bancorp
2860 West Bayshore Road
Palo Alto, California 94303
Telephone: (650) 813-8200
Telecopier: (650) 494-9193
(a) Except as otherwise expressly set forth in this Declaration
and except if a meeting of the Administrative Trustees is called with respect to
any matter over which the Administrative Trustees have power to act, any power
of the Administrative Trustees may be exercised by, or with the consent of, any
one such Administrative Trustee.
(b) Unless otherwise required by the Business Trust Act or other
applicable law, any Administrative Trustee acting alone is authorized to execute
on behalf of the Trust any documents which the Administrative Trustees have the
power and authority to cause the Trust to execute pursuant to Section 3.6.
(c) An Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
31
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.6(b) hereof and to Section 6(b) of
Annex I hereto, Trustees may be appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the
Holders of a Majority in Liquidation Amount of the Common
Securities voting as a class at a meeting of the Holders of the
Common Securities; and
(iii) if an Event of Default shall have occurred and be
continuing after the issuance of the Securities, with respect to
the Property Trustee or the Delaware Trustee, by vote of Holders
of a Majority in Liquidation Amount of the Capital Securities
voting as a class at a meeting of Holders of the Capital
Securities, and with respect to the Administrative Trustees, in
the manner set forth in Section 5.6(a)(ii) hereof.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Property Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the removed Property
Trustee, the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee
under Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has
been appointed and has accepted such appointment by written
instrument executed by such Successor Delaware Trustee and
delivered to the removed Delaware Trustee, the Property Trustee
(if the removed Delaware Trustee is not also the Property
Trustee), the Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the other Trustees, the Sponsor and the Trust, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
- -------- -------
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by
such Successor Property Trustee and delivered to the Trust,
the Sponsor, the Delaware
32
Trustee (if the resigning Property Trustee is not also the
Delaware Trustee) and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the
Holders; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and
delivered to the Trust, the Property Trustee (if the resigning
Delaware Trustee is not also the Property Trustee), the Sponsor
and the resigning Delaware Trustee.
(d) The Holders of the Common Securities or, if an Event of
Default shall have occurred and be continuing after the issuance of the
Securities, the Holders of the Capital Securities shall use their best efforts
to promptly appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper to
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
(g) At the time of resignation or removal of the Property
Trustee or the Delaware Trustee, the Sponsor shall pay to such Trustee any
amounts that may be owed to such Trustee pursuant to Section 10.4.
(h) 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 Successor Delaware
Trustee in the State of Delaware.
SECTION 5.7 Vacancies among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.l, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees
33
shall be conclusive evidence of the existence of such vacancy. The vacancy shall
be filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 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, liquidate or annul the Trust or to
terminate this Declaration. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 5.6, the Administrative
Trustees in office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Declaration.
SECTION 5.9 Meetings.
--------
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
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 an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that, a Quorum is present, or without a meeting
-------- ----
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.
SECTION 5.10 Delegation of Power.
-------------------
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing.
(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution
34
of such instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of this Declaration.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any Person into which the Property Trustee or the Delaware
Trustee or any Administrative Trustee that is not a natural person, as the case
may be, may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Property Trustee or the Delaware Trustee, as the case may be, shall be a party,
or any Person succeeding to all or substantially all the corporate trust
business of the Property Trustee or the Delaware Trustee, as the case may be,
shall be the successor of the Property 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
Delaware Secretary of State as contemplated in Section 5.6(h).
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
and Additional Sums) and/or principal on the Debentures held by the Property
Trustee or Liquidated Damages or any other payments pursuant to the Registration
Rights Agreement or Liquidated Damages Agreement with respect to the Debentures
held by the Property Trustee (the amount of any such payment being a "Payment
Amount"), the Property Trustee shall and is directed, to the extent funds are
available for that purpose, to make a distribution (a "Distribution") of the
Payment Amount to Holders in accordance with the terms of the Securities.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Administrative Trustees shall, on behalf of the Trust,
issue one class of capital securities representing undivided preferred
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Series A Capital Securities") and one class of common
securities representing undivided common beneficial interests in the assets of
the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Administrative Trustees shall, on behalf of the Trust, issue
one class of capital securities representing undivided preferred beneficial
interests in the assets of the Trust having such terms as set forth in Annex I
(the "Series B Capital Securities") in exchange for the Series A Capital
Securities accepted for exchange in the Exchange Offer, which Series B Capital
Securities shall
35
not bear the legends required by Section 9.2(i) unless the Holder of such Series
A Capital Securities is either (A) a broker-dealer who purchased such Series A
Capital Securities directly from the Trust for resale pursuant to Rule 144A or
any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A Capital Securities or (C) a
Person who is an Affiliate of the Sponsor or the Trust. The Trust shall issue no
securities or other interests in the assets of the Trust other than the Capital
Securities and the Common Securities.
(b) 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.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued and,
subject to the terms of this Declaration, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust and entitled to the benefits of
this Declaration, and the Holders thereof shall be entitled to the benefits of
this Declaration.
(d) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
----------------------------
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such Administrative
Trustee before the Securities so signed shall be delivered by the Trust, such
Securities nevertheless may be delivered as though the Person who signed such
Securities had not ceased to be such Administrative Trustee; and any Securities
may be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Administrative Trustees of the Trust,
although at the date of the execution and delivery of this Declaration any such
person was not an Administrative Trustee.
(b) One Administrative Trustee shall sign the Capital Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
an Administrative Trustee on behalf of the Trust, an Administrative Trustee
shall sign the Common Securities for the Trust by manual signature.
A Capital Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration. A Common Security shall be valid upon
execution by an Administrative Trustee without any act of the Property Trustee.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Capital Securities for
original issue. The aggregate
36
number of Capital Securities outstanding at any time shall not exceed the number
set forth in Annex I hereto except as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An authenticating
agent may authenticate Capital Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee hereunder with respect to the Sponsor or an
Affiliate.
SECTION 7.3 Form and Dating.
---------------
The Capital Securities shall be evidenced by one or more
certificates 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. The Property Trustee's certificate of authentication shall be
substantially in the form set forth in Exhibit A-1. Certificates representing
the Securities may be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to an Administrative Trustee, as
evidenced by the execution thereof. The Securities may have letters, "CUSIP" or
other 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 Administrative Trustees, as
evidenced by their execution thereof. The Trust at the direction of the Sponsor,
shall furnish any such legend not contained in Exhibit A-1 to the Property
Trustee in writing. Each Capital Security shall be dated the date of its
authentication. The terms and provisions of the Securities set forth in Annex I
and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the
terms of this Declaration and, to the extent applicable, the Property Trustee
and the Sponsor, by their execution and delivery of this Declaration, expressly
agree to such terms and provisions and to be bound thereby.
(a) Global Capital Security. Capital Securities offered and sold
-----------------------
to QIBs in reliance on Rule 144A, as provided in the Purchase Agreement, shall
be issued in the form of a single permanent global Capital Security in
definitive, fully registered form without distribution coupons with the
appropriate global legends and Restricted Securities Legend set forth in Exhibit
A-1 hereto (the "Global Capital Security"), which shall be deposited on behalf
of the purchasers of the Capital Securities represented thereby with the
Property Trustee, at its Corporate Trust Office, as custodian for the Clearing
Agency, and registered in the name of the Clearing Agency or a nominee of the
Clearing Agency, duly executed by the Trust and authenticated by the Property
Trustee as hereinafter provided. The number of Capital Securities represented by
the Global Capital Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the Clearing Agency
or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only
---------------------
to the Global Capital Security and such other Capital Securities in global form
as may be authorized by the Trust to be deposited with or on behalf of the
Clearing Agency.
37
An Administrative Trustee shall execute and the Property Trustee
shall, in accordance with this Section 7.3, authenticate and make available for
delivery initially a single Global Capital Security that (i) shall be registered
in the name of Cede & Co. or other nominee of such Clearing Agency, and (ii)
shall be delivered by the Property Trustee to such Clearing Agency or pursuant
to such Clearing Agency's written instructions or, if no such written
instructions are received by the Property Trustee, held by the Property Trustee
as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to the
Global Capital Security held on their behalf by the Clearing Agency or by the
Property Trustee as the custodian of the Clearing Agency or under such Global
Capital Security, and the Clearing Agency may be treated by the Trust, the
Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Global Capital Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and its
Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in the
Global Capital Security.
(c) Definitive Capital Securities. Except as provided in Section
-----------------------------
7.9 or 9.2(f)(i), owners of beneficial interests in the Global Capital Security
will not be entitled to receive physical delivery of certificated Capital
Securities ("Definitive Capital Securities"). Purchasers of Securities who are
"accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) and who are not QIBs will receive Capital Securities in the form
of individual certificates in definitive, fully registered form without
distribution coupons and with the Restricted Securities Legend set forth in
Exhibit A-1 hereto ("Restricted Definitive Capital Securities"); provided,
--------
however, that upon registration of transfer of such Restricted Definitive
- -------
Capital Securities to a QIB, such Restricted Definitive Capital Securities will,
unless the Global Capital Security has previously been exchanged, be exchanged
for an interest in the Global Capital Security pursuant to the provisions of
Section 9.2. Restricted Definitive Capital Securities will bear the Restricted
Securities Legend set forth on Exhibit A-1 unless removed in accordance with
this Section 7.3 or Section 9.2.
SECTION 7.4 Registrar, Paying Agent and Exchange Agent.
------------------------------------------
The Trust shall maintain in Wilmington, Delaware (i) an office or
agency where Capital Securities may be presented for registration of transfer
("Registrar"), (ii) an office or agency where Capital Securities may be
presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for exchange ("Exchange Agent"). The Registrar shall
keep a register of the Capital Securities and of their transfer. The Trust may
appoint the Registrar, the Paying Agent and the Exchange Agent and may appoint
one or more co-registrars, one or more additional paying agents and one or more
additional Exchange Agents in such other locations as it shall determine. The
term "Registrar" includes any additional registrar, the term "Paying Agent"
includes any additional paying agent and the term "Exchange Agent" includes any
additional Exchange Agent. The Trust may change any Paying Agent,
38
Registrar, co-registrar or Exchange Agent without prior notice to any
Holder. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Property Trustee, the Administrative Trustees and
the Sponsor. The Trust shall notify the Property Trustee of the name and
address of any Agent not a party to this Declaration. If the Trust fails to
appoint or maintain another entity as Registrar, Paying Agent or Exchange Agent,
the Property Trustee shall act as such. The Trust or any of its Affiliates may
act as Paying Agent, Registrar, or Exchange Agent. The Trust shall act as
Paying Agent, Registrar and Exchange Agent for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar,
Paying Agent and Exchange Agent for the Capital Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
-----------------------------------
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions, and will notify the
Property Trustee if there are insufficient funds for such purpose. While any
such insufficiency continues, the Property Trustee may require a Paying Agent to
pay all money held by it to the Property Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Property Trustee and
to account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or
an Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
----------------------
If a Holder claims that a Security owned by it has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, an Administrative Trustee shall execute and the Property
Trustee shall authenticate and make available for delivery a replacement
Security if the Property Trustee's requirements are met. An indemnity bond must
be provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor, the Trust or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Trust may charge such Holder for its expenses in replacing a Security.
SECTION 7.7 Outstanding Capital Securities.
------------------------------
The Capital Securities outstanding at any time are all the Capital
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Capital Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Capital
Security is held by a bona fide purchaser.
39
If Capital Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
A Capital Security does not cease to be outstanding because one of
the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury.
------------------------------
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Securities
which the Property Trustee actually knows are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities.
--------------------
(a) Until Definitive Capital Securities are ready for delivery,
the Trust may prepare and, in the case of the Capital Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Capital Securities but may have
variations that the Trust considers appropriate for temporary Securities.
Without unreasonable delay, the Trust shall prepare and, in the case of the
Capital Securities, the Property Trustee shall authenticate Definitive Capital
Securities in exchange for temporary Securities.
(b) The Global Capital Security deposited with the Clearing Agency
or with the Property Trustee as custodian for the Clearing Agency pursuant to
Section 7.3 shall be transferred to the beneficial owners thereof in the form of
Definitive Capital Securities only if such transfer complies with Section 9.2
and (i) the Clearing Agency notifies the Sponsor that it is unwilling or unable
to continue as Clearing Agency for such Global Capital Security or if at any
time such Clearing Agency ceases to be a "clearing agency" registered under the
Exchange Act, and, in each case, a clearing agency is not appointed by the
Sponsor within 90 days of receipt of such notice or of becoming aware of such
condition, (ii) a Default or an Event of Default has occurred and is continuing,
or (iii) the Trust at its sole discretion elects to cause the issuance of
Definitive Capital Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of Definitive Capital Securities pursuant
to this Section 7.9 shall be surrendered by the Clearing Agency to the Property
Trustee to be so transferred, in whole or from time to time in part, without
charge, and the Property Trustee shall authenticate and make available for
delivery, upon such transfer of each portion of such Global Capital Security, an
equal aggregate liquidation amount of Capital Securities of authorized
denominations in the form of Definitive Capital Securities. Any portion of the
Global Capital Security transferred pursuant to this Section shall be registered
in such names as the Clearing Agency shall direct. Any Definitive Capital
Security delivered in exchange for an interest in the Restricted Global Capital
40
Security shall, except as otherwise provided by Sections 7.3 and 9.1, bear the
Restricted Securities Legend set forth in Exhibit A-l hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of
the Global Capital Security may grant proxies and otherwise authorize any
Person, including Participants and Persons that may hold interests through
Participants, to take any action which such Holder is entitled to take under
this Declaration or the Securities.
(e) In the event of the occurrence of any of the events specified
in Section 7.9(b), the Trust will promptly make available to the Property
Trustee a reasonable supply of certificated Capital Securities in fully
registered form without distribution coupons.
SECTION 7.10 Cancellation.
------------
The Trust at any time may deliver Capital Securities to the
Property Trustee for cancellation. The Registrar, Paying Agent and Exchange
Agent shall forward to the Property Trustee any Capital Securities surrendered
to them for registration of transfer, redemption, exchange or payment. The
Property Trustee shall promptly cancel all Capital Securities surrendered for
registration of transfer, redemption, exchange, payment, replacement or
cancellation and shall dispose of canceled Capital Securities in accordance with
its customary procedures unless the Trust otherwise directs. The Trust may not
issue new Capital Securities to replace Capital Securities that it has paid or
that have been delivered to the Property Trustee for cancellation or that any
Holder has exchanged.
SECTION 7.11 CUSIP Numbers.
-------------
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that, any such notice may state that no representation is
-------- ----
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 Dissolution of Trust.
--------------------
(a) The Trust shall automatically dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor; or the
revocation of the Sponsor's
41
charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the
Debentures to the Holders, provided that, the Property Trustee
-------------
has received written notice from the Sponsor directing the
Property Trustee to dissolve the Trust (which direction is
optional, and except as otherwise expressly provided below,
within the discretion of the Sponsor), and provided, further,
-------- -------
that such direction and such distribution is conditioned on (a)
the receipt by the Sponsor of any and all required regulatory
approvals, and (b) the Sponsor's receipt and delivery to the
Administrative Trustees of an opinion of independent tax counsel
experienced in such matters, which opinion may rely on public or
private rulings of the Internal Revenue Service, to the effect
that the Holders of the Capital Securities will not recognize any
gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and the distribution of
Debentures;
(iv) upon the entry of a decree of judicial dissolution of
the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities;
(vi) upon the redemption or repayment of the Debentures or
at such time as no Debentures are outstanding; or
(vii) the expiration of the term of the Trust provided in
Section 3.14.
(b) As soon as is practicable upon completion of winding up of
the Trust following the occurrence of an event referred to in Section 8.1(a) and
the satisfaction of creditors of the Trust in accordance with applicable law,
the Administrative Trustees shall terminate the Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware in accordance
with the Business Trust Act.
(c) The provisions of Section 3.9 and Article X shall survive the
dissolution and termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
accordance with the terms of the Securities. To the fullest extent permitted by
law, any transfer or purported transfer of any Security not made in accordance
with this Declaration shall be null and void.
42
(b) Subject to this Article IX, Capital Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
(c) For so long as the Securities remain outstanding, the Sponsor
agrees (i) not to transfer ownership of the Common Securities of the Trust,
provided that any permitted successor of the Sponsor under the Indenture may
succeed to the Sponsor's ownership of the Common Securities, (ii) not to cause,
as Sponsor of the Trust, or to permit, as Holder of the Common Securities, the
dissolution, winding-up or liquidation of the Trust, except as provided in this
Declaration and (iii) to use its best efforts to cause the Trust (a) to remain a
business trust, except in connection with the distribution of Debentures to the
Holders in liquidation of the Trust, the redemption of all of the Securities, or
certain mergers, consolidations or amalgamations, each as permitted by this
Declaration, and (b) to otherwise continue to be classified as a grantor trust
for United States federal income tax purposes.
(d) The Registrar shall provide for the registration of Capital
Securities and of the transfer of Capital Securities, which will be effected
without charge but only upon payment (with such indemnity as the Registrar may
require) in respect of any tax or other governmental charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any Capital
Securities, an Administrative Trustee shall cause one or more new Capital
Securities to be issued in the name of the designated transferee or transferees.
Every Capital Security surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by the Holder or such Holder's attorney duly authorized
in writing. Each Capital Security surrendered for registration of transfer
shall be delivered to the Registrar and canceled in accordance with Section
7.10. A transferee of a Capital Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Capital Security. By acceptance of a Capital Security or any
interest therein, each transferee shall be deemed to have agreed to be bound by
this Declaration.
SECTION 9.2 Transfer Procedures and Restrictions.
------------------------------------
(a) General. Except as otherwise provided in Section 9.2(b),
-------
if Capital Securities are issued upon the transfer, exchange or replacement of
Capital Securities bearing the Restricted Securities Legend set forth in Exhibit
A-1 hereto, or if a request is made to remove such Restricted Securities Legend
on Capital Securities, the Capital Securities so issued shall bear the
Restricted Securities Legend, or the Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Trust and the Property Trustee,
that neither the Restricted Securities Legend nor the restrictions on transfer
set forth therein are required to ensure that transfers thereof are made
pursuant to an exception from the registration requirements of the Securities
Act or, with respect to Restricted Capital Securities, that such Securities are
not "restricted" within the meaning of Rule 144. Upon provision of such
satisfactory evidence, the Property Trustee, at the written
43
direction of an Administrative Trustee on behalf of the Trust, shall
authenticate and deliver Capital Securities that do not bear the legend.
(b) Transfers After Effectiveness of a Registration Statement. After the
---------------------------------------------------------
effectiveness of a Registration Statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply (other than the legend requiring that transfers of Capital
Securities be made in blocks having an aggregate liquidation amount of not less
than $100,000 (100 Capital Securities) and multiples of $1,000 in excess
thereof), and beneficial interests in the Global Capital Security without
legends will be available to transferees of such Capital Securities, upon
exchange of the transferring Holder's Restricted Definitive Capital Security or
directions to transfer such Holder's beneficial interest in the Global Capital
Security, as the case may be. No such transfer or exchange of a Restricted
Definitive Capital Security or of an interest in the Global Capital Security
shall be effective unless the transferor delivers to the Property Trustee a
certificate in a form substantially similar to that attached hereto as the form
of "Assignment" in Exhibit A-1. Except as otherwise provided in Section 9.2(m),
after the effectiveness of a Registration Statement, an Administrative Trustee
on behalf of the Trust shall issue and the Property Trustee, upon a written
order of the Trust signed by one Administrative Trustee, shall authenticate a
Global Capital Security without the Restricted Securities Legend (the
"Unrestricted Global Capital Security") to deposit with the Clearing Agency to
evidence transfers of beneficial interests from the Global Capital Security and
Restricted Definitive Capital Securities.
(c) Transfer and Exchange of Definitive Capital Securities. When
------------------------------------------------------
Definitive Capital Securities are presented to the Registrar or co-registrar:
(x) to register the transfer of such Definitive Capital Securities; or
(y) to exchange such Definitive Capital Securities which became
mutilated, destroyed, defaced, stolen or lost, for an equal number of
Definitive Capital Securities, the Registrar or co-registrar shall register
the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered for
-------- -------
registration of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Trust and the Registrar
or co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Definitive Capital Securities that are Restricted
Definitive Capital Securities:
(A) if such Restricted Capital Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, certification(s) from such Holder to that effect;
or
44
(B) if such Restricted Capital Securities are being transferred: (i)
certification(s) in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A-1, and (ii) if the
Trust or Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in the
Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security for a
---------------------------------------------------------------
Beneficial Interest in the Global Capital Security. A Definitive Capital
- --------------------------------------------------
Security may not be exchanged for a beneficial interest in the Global Capital
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Capital Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Property Trustee, together with:
(i) if such Definitive Capital Security is a Restricted Capital
Security, certification(s) in a form substantially similar to that
attached hereto as the form of "Assignment" in Exhibit A-1; and
(ii) whether or not such Definitive Capital Security is a Restricted
Capital Security, written instructions directing the Property Trustee to
make, or to direct the Clearing Agency to make, an adjustment on its
books and records with respect to the Global Capital Security to reflect
an increase in the number of the Capital Securities represented by such
Global Capital Security,
then the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of Capital
Securities represented by the Global Capital Security to be increased
accordingly. If the Global Capital Security is not then outstanding, an
Administrative Trustee on behalf of the Trust shall issue and the Property
Trustee shall authenticate, upon written order of any Administrative Trustee, a
new Global Capital Security representing an appropriate number of Capital
Securities.
(e) Transfer and Exchange of the Global Capital Security. Subject to
----------------------------------------------------
Section 9.2(f), the transfer and exchange of the Global Capital Security or
beneficial interests therein shall be effected through the Clearing Agency in
accordance with this Declaration (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in the Global Capital Security for
--------------------------------------------------------------------
a Definitive Capital Security.
- -----------------------------
(i) Any Person having a beneficial interest in the Global Capital
Security may upon request, but only upon 20 days prior notice to the
Property Trustee, and if accompanied by the information specified below,
exchange such beneficial interest for a Definitive Capital Security
representing the same number of Capital Securities. Upon receipt by the
Property Trustee from the Clearing Agency or its nominee on behalf of any
Person having a beneficial
45
interest in the Global Capital Security of written instructions or such
other form of instructions as is customary for the Clearing Agency or the
Person designated by the Clearing Agency as having such a beneficial
interest in a Restricted Capital Security and certification(s) from the
transferor in a form substantially similar to that attached hereto as the
form of "Assignment" in Exhibit A-1, which may be submitted by facsimile,
then the Property Trustee will cause the aggregate number of Capital
Securities represented by the Global Capital Security to be reduced on its
books and records and, following such reduction, the Trust will execute and
the Property Trustee will authenticate and make available for delivery to
the transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in exchange for a
beneficial interest in the Global Capital Security pursuant to this Section
9.2(f) shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its
Clearing Agency Participants or indirect participants or otherwise, shall
instruct the Property Trustee in writing. The Property Trustee shall
deliver such Capital Securities to the Persons in whose names such Capital
Securities are so registered in accordance with such instructions of the
Clearing Agency.
(g) Restrictions on Transfer and Exchange of the Global Capital Security.
--------------------------------------------------------------------
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in subsection (h) of this Section 9.2), the Global Capital
Security may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
(h) Authentication of Definitive Capital Securities. If at any time:
(i) a Default or an Event of Default has occurred and is continuing,
(ii) the Trust, in its sole discretion, notifies the Property Trustee
in writing that it elects to cause the issuance of Definitive Capital
Securities under this Declaration, or
(iii) the Clearing Agency notifies the Sponsor that it is unwilling or
unable to continue as Clearing Agency for such Global Capital Security or
if at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act, and, in each case, a clearing agency is
not appointed by the Sponsor within 90 days of receipt of such notice or of
becoming aware of such condition,
then an Administrative Trustee on behalf of the Trust will execute, and the
Property Trustee, upon receipt of a written order of the Trust signed by one
Administrative Trustee requesting the authentication and delivery of Definitive
Capital Securities to the Persons designated by the
46
Trust, will authenticate and make available for delivery Definitive Capital
Securities, equal in number to the number of Capital Securities represented by
the Global Capital Security, in exchange for such Global Capital Security.
(i) Legend.
------
(i) Except as permitted by the following paragraph (ii), each
Capital Security Certificate evidencing the Global Capital Security and
each Definitive Capital Security (and all Capital Securities issued in
exchange therefor or substitution thereof) shall bear a legend (the
"Restricted Securities Legend") in substantially the following form:
THIS CAPITAL 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 LAW. NEITHER THIS CAPITAL 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,
REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS
CAPITAL SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE
LAST DATE ON WHICH GREATER BAY BANCORP (THE "CORPORATION")
OR ANY "AFFILIATE" OF THE CORPORATION WAS THE OWNER OF
THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL
SECURITY) ONLY (A) TO THE CORPORATION, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
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
47
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF GBB CAPITAL IV (THE "TRUST") AND
THE CORPORATION PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii)
PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE TRANSFEROR
DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE
SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE OFFERING
MEMORANDUM DATED MAY 16, 2000. SUCH HOLDER FURTHER AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
48
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT
AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR
OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"), OR
AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO
PERSON INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR
HOLD THE CAPITAL SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-
38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS
PURCHASE AND HOLDING OF CAPITAL SECURITIES IS NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY
INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3)
OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF
AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR
ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR
PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL
NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406
OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO
APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
In all circumstances, each Capital Security Certificate shall bear the following
legend:
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF
NOT LESS THAN $100,000
49
(100 CAPITAL SECURITIES) AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF CAPITAL SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000
(100 CAPITAL SECURITIES) SHALL BE DEEMED TO BE VOID AND OF
NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE
SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH 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.
(ii) Upon any sale or transfer of a Restricted Capital Security
(including any Restricted Capital Security represented by the Global
Capital Security) pursuant to an effective registration statement under
the Securities Act or pursuant to Rule 144:
(A) in the case of any Restricted Capital Security that is a
Definitive Capital Security, the Registrar shall permit the Holder
thereof to exchange such Restricted Capital Security for a
Definitive Capital Security that does not bear the Restricted
Securities Legend and rescind any restriction on the transfer of
such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is
represented by the Global Capital Security, the Registrar shall
permit the Holder of such Global Capital Security to exchange such
Global Capital Security for another Global Capital Security that
does not bear the Restricted Securities Legend.
(j) Cancellation or Adjustment of Global Capital Security. At such time
-----------------------------------------------------
as all beneficial interests in the Global Capital Security have either been
exchanged for Definitive Capital Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Capital Security shall be returned to the Clearing
Agency for cancellation or retained and canceled by the Property Trustee. At
any time prior to such cancellation, if any beneficial interest in the Global
Capital Security is exchanged for Definitive Capital Securities, Capital
Securities represented by such Global Capital Security shall be reduced and an
adjustment shall be made on the books and records of the Property Trustee and
the Clearing Agency or its nominee to reflect such reduction.
50
(k) Obligations with Respect to Transfers and Exchanges of Capital
--------------------------------------------------------------
Securities.
- ----------
(i) To permit registrations of transfers and exchanges, the Trust
shall execute and the Property Trustee shall authenticate Definitive
Capital Securities and the Global Capital Security at the Registrar's or
co-registrar's request in accordance with the terms of this Declaration.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust
or the Sponsor may require) in respect of any tax or other governmental
charge that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) Capital Securities during a
period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Capital
Securities for redemption and ending at the close of business on the day
of such mailing or (b) any Capital Security so selected for redemption in
whole or in part, except the unredeemed portion of any Capital Security
being redeemed in part.
(iv) Prior to the due presentation for registration of transfer of
any Capital Security, the Trust, the Property Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the Person in whose
name a Capital Security is registered as the absolute owner of such
Capital Security for the purpose of receiving Distributions on such
Capital Security and for all other purposes whatsoever, and none of the
Trust, the Property Trustee, the Paying Agent, the Registrar or any co-
registrar shall be affected by notice to the contrary.
(v) All Capital Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Declaration shall
evidence the same security and shall be entitled to the same benefits
under this Declaration as the Capital Securities surrendered upon such
registration of transfer or exchange.
(l) No Obligation of the Property Trustee.
-------------------------------------
(i) The Property Trustee shall have no responsibility or
obligation to any Capital Security Beneficial Owner, a Participant in the
Clearing Agency or other Person with respect to the accuracy of the
records of the Clearing Agency or its nominee or of any Participant
thereof, with respect to any ownership interest in the Capital Securities
or with respect to the delivery to any Participant, beneficial owner or
other Person (other than the Clearing Agency) of any notice (including
any notice of redemption) or the payment of any amount, under or with
respect to such Capital Securities. All notices and communications to be
given to the Holders and all payments to be made to
51
Holders under the Capital Securities shall be given or made only
to or upon the order of the registered Holders (which shall be
the Clearing Agency or its nominee in the case of the Global
Capital Security). The rights of Capital Security Beneficial
Owners shall be exercised only through the Clearing Agency
subject to the applicable rules and procedures of the Clearing
Agency. The Property Trustee may conclusively rely and shall be
fully protected in relying upon information furnished by the
Clearing Agency or any agent thereof with respect to its
Participants and any Capital Security Beneficial Owners.
(ii) The Property Trustee and the Registrar shall have no
obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this
Declaration or under applicable law with respect to any transfer
of any interest in any Capital Security (including any transfers
between or among Clearing Agency Participants or Capital Security
Beneficial Owners) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the
terms of this Declaration, and to examine the same to determine
substantial compliance as to form with the express requirements
hereof.
(m) Exchange of Series A Capital Securities for Series B Capital
------------------------------------------------------------
Securities. The Series A Capital Securities shall be exchanged for Series B
- ----------
Capital Securities pursuant to the terms of the Exchange Offer if the following
conditions are satisfied:
The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities, the
transactions contemplated by the Exchange Offer have been
consummated; and
(B) the number of Series A Capital Securities properly
tendered in the Exchange Offer that are represented by the
Global Capital Security and the number of Series A Capital
Securities properly tendered in the Exchange Offer that are
represented by Definitive Capital Securities, the name of
each Holder of such Definitive Capital Securities, the
liquidation amount of Capital Securities properly tendered in
the Exchange Offer by each such Holder and the name and
address to which Definitive Capital Securities for Series B
Capital Securities shall be registered and sent for each such
Holder.
The Property Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Series B
Capital Securities and the Series B Capital Securities Guarantee have been
registered under Section 5 of the Securities Act and that this Declaration and
the Series B Capital Securities Guarantee have been qualified under the Trust
Indenture Act and (y) with respect to the matters set forth in Section 3(q) of
the Registration
52
Rights Agreement, shall authenticate (A) the Global Capital Security, executed
and delivered by the Trust to the Property Trustee, for Series B Capital
Securities in aggregate liquidation amount equal to the aggregate liquidation
amount of Series A Capital Securities represented by the Global Capital Security
indicated in such Officers' Certificate as having been properly tendered and (B)
Definitive Capital Securities, executed and delivered by the Trust to the
Property Trustee, representing Series B Capital Securities registered in the
names and in the liquidation amounts indicated in such Officers' Certificate.
If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered and
not withdrawn, the Property Trustee shall make an endorsement on the Global
Capital Security for Series A Capital Securities indicating the reduction in the
number and aggregate liquidation amount represented thereby as a result of the
Exchange Offer.
The Trust shall deliver such authenticated Definitive Capital
Securities for Series B Capital Securities to the Holders thereof as indicated
in such Officers' Certificate.
(n) Minimum Transfers. Series A Capital Securities and, if and
-----------------
when issued, Series B 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 Series A
Capital Securities or Series B Capital Securities in a block having an aggregate
liquidation amount of less than $100,000 shall be deemed to be voided and of no
legal effect whatsoever. Any such purported transferee shall be deemed not to be
a Holder of such Series A Capital Securities or Series B 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 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Security
shall be registered on the books and records of the Trust as the sole owner and
Holder 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
Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4 Book-Entry Interests.
--------------------
The Global Capital Security shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency and no Capital Security Beneficial Owner will receive physical
delivery of a definitive Capital Security certificate (a "Capital Security
Certificate") representing such Capital Security Beneficial Owner's interests in
such Global Capital Security, except as provided in Section 9.2 and Section 7.9.
Unless and until Definitive Capital Securities have been issued to the Capital
Security Beneficial Owners pursuant to Section 9.2 or Section 7.9:
(a) the provisions of this Section 9.4 shall be in full force
and effect;
53
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Capital Security and receiving approvals, votes
or consents hereunder) as the sole Holder of the Global Capital Security and
shall have no obligation to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants, and the
Clearing Agency shall receive and transmit payments of Distributions on the
Global Capital Security to such Clearing Agency Participants; provided, however,
-------- -------
that solely for the purposes of determining whether the Holders of the requisite
amount of Capital Securities have voted on any matter provided for in this
Declaration, the Trustees, with respect to the Global Capital Security, may
conclusively rely on, and shall be protected in relying on, any written
instrument (including a proxy) delivered to the Trustees by the Clearing Agency
setting forth the Capital Security Beneficial Owners' votes or assigning the
right to vote on any matter to any other Persons either in whole or in part; and
the Clearing Agency will also make book-entry transfers among the Clearing
Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Capital Security
Holders is required to be given by a Trustee under this Declaration, such
Trustee shall give all such notices and communications specified herein to be
given to the Holder of the Global Capital Security to the Clearing Agency and
shall have no notice obligations to the Capital Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Administrative
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
54
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders
which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder any
deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than in respect of the Securities) to the extent
not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the
Holders shall be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's gross negligence (or in
the case of the Property Trustee or the Delaware Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 10.3 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 Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
55
(i) whenever a conflict of interest exists or arises
between any Covered Person and any Indemnified Person, or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) 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 10.4 Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company 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 he is or was a Company Indemnified Person, against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he 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 his
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 Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
56
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company 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 he is or was a Company Indemnified Person against expenses
(including attorneys' fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he
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
Company 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 a Company 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
10.4(a), or in defense of any claim, issue or matter therein, he
or she shall be indemnified, to the full extent permitted by law,
against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(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 Company Indemnified
Person is proper in the circumstances because he or she has met
the applicable standard of conduct set forth in paragraphs (i)
and (ii). Such determination shall be made (1) by the
Administrative Trustees by a majority vote of a Quorum consisting
of such Administrative Trustees who were not parties to such
action, suit or proceeding, (2) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees and expenses)
incurred by a Company Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section
10.4(a) shall be paid by the Sponsor in advance of the final
57
disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to
repay such amount if it shall ultimately be determined that he or
she is not entitled to be indemnified by the Sponsor as
authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the
Administrative Trustees by a majority vote of a Quorum of
disinterested Administrative Trustees, (ii) if such a Quorum is
not obtainable, or, even if obtainable, if a Quorum of
disinterested Administrative Trustees so directs, by independent
legal counsel in a written opinion or (iii) by the Common
Security Holder of the Trust, that, based upon the facts known to
the Administrative Trustees, counsel or the Common Security
Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that the
Common Security Holder did not believe to be in, or believed was
opposed to, the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his or her conduct
was unlawful. In no event shall any advance be made in instances
where the Administrative Trustees, independent legal counsel or
Common Security Holder reasonably determine that a Company
Indemnified Person deliberately breached his or her duty to the
Trust or its Common or Capital Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) 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
his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this
Section 10.4(a) shall be deemed to be provided by a contract
between the Sponsor and each Company Indemnified Person who
serves in such capacity at any time while this Section 10.4(a) is
in effect. Any repeal or modification of this Section 10.4(a)
shall not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him or
her and incurred by him or her in any such capacity, or arising
out of his or her status as such, whether or not the Debenture
Issuer would have the power to indemnify him or her against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), 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
58
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 10.4(a) with
respect to the resulting or surviving entity as he or she would
have with respect to such constituent entity if its separate
existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue
as to a Person who has ceased to be a Company Indemnified Person
and shall inure to the benefit of the heirs, executors and
administrators of such a Person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv), including the Property Trustee and the Delaware Trustee in their
respective individual capacities, being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any and all loss, liability, damage, action, suit, claim or expense including
taxes (other than taxes based on the income of such Fiduciary Indemnified
Person) of any kind and nature whatsoever incurred without negligence (or gross
negligence on the part of the Delaware Trustee) or bad faith on the part of such
Fiduciary Indemnified Person, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
against or investigating any claim or liability in connection with the exercise
or performance of any of the powers or duties of such Fiduciary Indemnified
Person hereunder. The obligation to indemnify as set forth in this Section
10.4(b) shall survive the resignation or removal of the Property Trustee or the
Delaware Trustee and the satisfaction and discharge of this Declaration.
(c) The Sponsor agrees to pay the Property Trustee and the
Delaware Trustee, from time to time, such compensation for all services rendered
by the Property Trustee and the Delaware Trustee hereunder as may be mutually
agreed upon in writing by the Sponsor and the Property Trustee or the Delaware
Trustee, as the case may be, and, except as otherwise expressly provided herein,
to reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses (including legal fees and expenses),
disbursements and advances incurred or made by the Property Trustee or the
Delaware Trustee, as the case may be, in accordance with the provisions of this
Declaration, except any such expense, disbursement or advance as may be
attributable to its or their negligence (or gross negligence on the part of the
Delaware Trustee) or bad faith.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 5.3(c)) may engage in or possess an
interest in other business
59
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 shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be duly prepared
and delivered to each of the Holders any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Administrative Trustees shall endeavor to
deliver all such information statements within 30 days after the end of each
Fiscal Year of the Trust.
(c) The Administrative Trustees shall cause to be duly prepared
and filed with the appropriate taxing authority, 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
60
annual income tax returns required to be filed by the Administrative Trustees on
behalf of the Trust with any state or local taxing authority.
SECTION 11.3 Banking.
-------
The Trust may maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
-------- -------
in respect of the Debentures held by the Property Trustee shall be made directly
to the Property Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
-------- -------
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
SECTION 11.4 Withholding.
-----------
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall
cause to be filed required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claim of excess withholding, 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
Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration (including
Section 7 of Annex I hereto) or by any applicable terms of the Securities, this
Declaration may only be amended by a written instrument approved and executed
by:
(i) the Sponsor and the Administrative Trustees (or, if
there are more than two Administrative Trustees, a majority of
the Administrative Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
61
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective :
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received 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);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of
the Property Trustee, the Property Trustee shall have first
received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms
to, the terms of this 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;
provided, however, that the Property Trustee shall not be required to sign any
- -------- -------
such amendment; and
(iii) to the extent the result of such amendment would be
to:
(A) cause the Trust to fail to continue to be classified
for purposes of United States federal income taxation as a
grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture
Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment
Company Act.
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder (other than an amendment pursuant to (g)
below) may be effected only with such additional requirements as may be set
forth in the terms of such Securities;
(d) Section 10.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders;
62
(e) Article Four shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities;
(f) The rights of the Holders of the Common Securities under
Article V 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 Common Securities; and
(g) Notwithstanding Section 12.1(c), this Declaration may be
amended without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be inconsistent with any
other provision of this Declaration or to make any other
provisions with respect to matters or questions arising under
this Declaration which shall not be inconsistent with the other
provisions of the Declaration;
(ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that
the Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required to
register as an Investment Company under the Investment Company
Act; and
(iii) to modify, eliminate or add any provisions of the
Declaration to such extent as shall be necessary to enable the
Trust or the Sponsor to conduct an Exchange Offer in the manner
contemplated by the Registration Rights Agreement;
provided, however, that in each clause above, such action shall not adversely
- -------- -------
affect in any material respect the interests of the Holders, and any such
amendments of this Declaration shall become effective when notice thereof is
given to the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
--------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in Liquidation Amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in writing stating that the signing Holders wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Capital
Security Certificates held by the Holders exercising the right to call a meeting
and only those Securities specified shall
63
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:
(i) notice of any such meeting shall be given to all the
Holders having a right to vote thereat at least seven days and
not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders 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,
such vote, consent or approval may be given at a meeting of the
Holders; any action that may be taken at a meeting of the Holders
may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders owning not
less than the minimum amount of Securities in liquidation amount
that would be necessary to authorize or take such action at a
meeting at which all Holders 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 entitled to vote who have
not consented in writing; and the Administrative Trustees may
specify that any written ballot submitted to the Security Holder
for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which a Holder 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 eleven months from the date thereof unless
otherwise provided in the proxy; every proxy shall be revocable
at the pleasure of the Holder executing it; and, 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 were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business 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 trading, otherwise provides, the Administrative
Trustees, in their sole discretion, shall establish all other
provisions relating to meetings of Holders, including notice of
the time, place or purpose of any meeting at which any matter is
to be voted on by any
64
Holders, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a Delaware banking corporation, a national
banking association or a bank or trust company, duly organized, validly existing
and in good standing under the laws of the United States or the State of
Delaware as the case may be, with corporate power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;
(b) the execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee; and this Declaration has been duly executed
and delivered by the Property Trustee and under Delaware law (excluding any
securities laws) constitutes a legal, valid and binding obligation of the
Property Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any federal or state banking authority governing the trust powers of
the Property Trustee is required for the execution, delivery or performance by
the Property Trustee of this Declaration.
SECTION 13.2 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:
65
(a) the Delaware Trustee is a Delaware banking corporation, a national
banking association or a bank or trust company, duly organized, validly existing
and in good standing under the laws of the United States or the State of
Delaware, as the case may be, with corporate power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;
(b) 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 the enforcement of
such remedies is considered in a proceeding in equity or at law);
(c) 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; and
(d) no consent, approval or authorization of, or registration with or
notice to, any federal or Delaware banking authority governing the trust powers
of the Delaware Trustee is required for the execution, delivery or performance
by the Delaware Trustee of this Declaration; and
(e) the Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware, and is a Person that satisfies for
the Trust Section 3807(a) of the Business Trust Act.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement; Liquidated Damages.
-------------------------------------------------
The Holders of the Series A Capital Securities, the Series A Debentures
and the Series A Capital Securities Guarantee are entitled to the benefits of
the Registration Rights Agreement and the Liquidated Damages Agreement. In
certain limited circumstances set forth in the Registration Rights Agreement and
the Liquidated Damages Agreement, the Debenture Issuer shall be required to pay
liquidated damages with respect to the Series A Debentures. Unless otherwise
stated, the term "Distribution," as used in this Declaration, includes any and
all liquidated damages.
66
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 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 or
mailed by first class mail, overnight courier service or confirmed telecopy, as
follows:
(a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Property Trustee, the Delaware Trustee and the
Holders):
GBB Capital IV
c/o Greater Bay Bancorp
2860 West Bayshore Road
Palo Alto, California 94303
Attention: Steven C. Smith
Telephone: (650) 813-8200
Telecopier: (650) 494-9193
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882
(c) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property Trustee
may give notice of to the Holders):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopier: (302) 651-8882]
(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 to the Trust):
67
GREATER BAY BANCORP
2860 West Bayshore Road
Palo Alto, California 94303
Attention: Steven C. Smith
Telephone: (650) 813-8200
Telecopier: (650) 494-9193
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 15.2 Governing Law.
-------------
This Declaration and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware
without regard to conflict of laws principles thereof.
SECTION 15.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 15.4 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 15.5 Successors and Assigns.
----------------------
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
SECTION 15.6 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.
68
SECTION 15.7 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 to one or more 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.
69
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ Steven C. Smith
______________________________________
Steven C. Smith
as Administrative Trustee
/s/ Shawn E. Saunders
______________________________________
Shawn E. Saunders
as Administrative Trustee
/s/ Mark Eschen
______________________________________
Mark Eschen
as Administrative Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: /s/ Anita E. Dallago
______________________________________
Name: Anita E. Dallago
Title: Administrative Account Manager
WILMINGTON TRUST COMPANY,
as Property Trustee
By: /s/ Anita E. Dallago
______________________________________
Name: Anita E. Dallago
Title: Administrative Account Manager
GREATER BAY BANCORP,
as Sponsor and Debenture Issuer
By: /s/ Shawn E. Saunders
______________________________________
Name: Shawn E. Saunders
Title: Senior Vice President,
Finance and Accounting
70
ANNEX I
TERMS OF
10.75% CAPITAL SECURITIES, SERIES A/SERIES B
10.75% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration, dated
as of May 19, 2000 (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Securities are set out below (each capitalized term used but
not defined herein has the meaning set forth in the Declaration, the Indenture
or, if not defined in such Declaration or Indenture, as defined in the Offering
Memorandum referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
----------------------
(a) Capital Securities. 10.75% Series A Capital Securities of the Trust
------------------
and 10.75% Series B Capital Securities of the Trust, each series with an
aggregate liquidation amount with respect to the assets of the Trust of Forty-
one Million Dollars ($41,000,000) and with a liquidation amount with respect to
the assets of the Trust of One Thousand Dollars ($1,000) (the "Liquidation
Amount") per security, are hereby designated for the purposes of identification
only as "10.75% Capital Securities, Series A" and "10.75% Capital Securities,
Series B," respectively (collectively, the "Capital Securities"). The
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 exchange or quotation system on or in which
the Capital Securities are listed, traded or quoted.
(b) Common Securities. 1,268 Common Securities of the Trust with an
-----------------
aggregate liquidation amount with respect to the assets of the Trust of One
Million Two Hundred Sixty-eight Thousand Dollars ($1,268,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per security, are
hereby designated for the purposes of identification only as "10.75% Common
Securities" (the "Common Securities"). The certificates evidencing the Common
Securities shall be 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.
2. Distributions.
-------------
(a) Distributions on each Security will be payable at a fixed rate per
annum of 10.75% (the "Coupon Rate") of the liquidation amount of $1000 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one semi-
annual period will bear additional Distributions thereon compounded semi-
annually at the Coupon Rate (to the extent permitted by applicable law).
Pursuant to the Registration Rights Agreement and the Liquidated Damages
Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement and the Liquidated Damages Agreement) with respect to the Debentures.
The term "Distributions" as used herein, includes distributions of any and all
such interest and Liquidated Damages, if any, payable unless otherwise stated.
A
I-1
Distribution is payable only to the extent that payments are made with respect
to the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds legally available therefor.
(b) Distributions on the Securities will be cumulative, will accumulate
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from May 19, 2000 and will be payable semi-
annually in arrears on June 1st and December 1st of each year, commencing
December 1, 2000 (each, a "Distribution Date"), except as otherwise described
below. Distributions will be computed on the basis a 360-day year of twelve 30-
day months. As long as no Event of Default has occurred and is continuing under
the Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding ten consecutive
semi-annual periods, including the first such semi-annual period during such
period (each an "Extension Period"), during which Extension Period no interest
shall be due and payable on the Debentures, provided that no Extension Period
-------- ----
shall end on a date other than an Interest Payment Date for the Debentures or
extend beyond the Maturity Date of the Debentures. As a consequence of such
deferral, Distributions (other than Liquidated Damages, if any) will also be
deferred. Notwithstanding such deferral, Distributions will continue to
accumulate with additional Distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which interest is then
accruing on the Debentures) at the Coupon Rate compounded semi-annually during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period, provided that such extension does not cause
-------- ----
such Extension Period, together with all such previous and further extensions
within such Extension Period, to exceed ten consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, end on a
date other than an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the close of business on
the 15/th/ day of the month immediately preceding the month in which the
relevant Distribution Date occurs, which Distribution Dates correspond to the
Interest Payment Dates for the Debentures. Subject to any applicable laws and
regulations and the provisions of the Declaration, each such payment with
respect to the Capital Securities will be made as described under the heading
"Description of Capital Securities--Form, Denomination, Book-Entry Procedures
and Transfer" in the Offering Memorandum dated May 16, 2000 of the Debenture
Issuer and the Trust relating to the Securities and the Debentures. The
relevant record dates for the Common Securities shall be the same as the record
dates for the Capital Securities. Distributions payable on any Securities that
are not punctually paid on any Distribution Date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, will cease to be
payable to the Holder on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable
on the Securities is not a Business Day, then payment of the Distributions
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
with the same force and effect as if made on such date.
I-2
(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any dissolution of the Trust, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the Administrative
Trustees determine to be possible by distributing to the Holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, a Like Amount (as defined below) of the Debentures, unless such
distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the liquidation amount of $1,000 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets legally available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust with respect to the Securities shall be paid on a Pro Rata
basis.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures in whole or in part, at maturity
or otherwise (either at the option of the Debenture Issuer or pursuant to a
Special Event, as described below), the proceeds from such repayment shall be
simultaneously applied by the Property Trustee (subject to the Property Trustee
having received written notice no later than 45 days prior to such repayment) to
redeem a Like Amount of the Securities at a redemption price equal to (i) in the
case of the repayment of the Debentures on the Maturity Date, the Maturity
Redemption Price (as defined below), (ii) in the case of the optional prepayment
of the Debentures prior to the Initial Optional Redemption Date and upon the
occurrence and continuation of a Special Event, the Special Event Redemption
Price (as defined below) and (iii) in the case of the optional prepayment of the
Debentures on or after the Initial Optional Redemption Date, the Optional
Redemption Price (as defined below). The Maturity Redemption Price, the Special
Event Redemption Price and the Optional Redemption Price are referred to
collectively as the "Redemption Price." Holders will be given not less than 30
nor more than 60 days prior written notice of such redemption.
(b) (i) The "Maturity Redemption Price" shall mean an amount equal to
100% of the principal of, plus accrued and unpaid interest (including Compounded
Interest and Additional Sums, if any, thereon to the date of redemption) on, the
Debentures as of the Maturity Date thereof.
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(ii) The Debenture Issuer shall have the right (subject to the
conditions in the Indenture) to elect to prepay the Debentures, in whole or in
part, at any time on or after June 1, 2010 (the "Initial Optional Redemption
Date"), and, simultaneous with such prepayment, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Optional Redemption Price on a Pro
Rata basis. "Optional Redemption Price" shall mean an amount equal to 100% of
the Liquidation Amount of the Securities to be redeemed plus, accumulated and
unpaid Distributions thereon, if any, to the date of such redemption:
(c) If at any time an Investment Company Event, a Regulatory Capital Event
or a Tax Event (each as defined below, and each a "Special Event") occurs, the
Debenture Issuer shall have the right (subject to the conditions set forth in
the Indenture) at any time prior to the Initial Optional Redemption Date, to
prepay the Debentures in whole, but not in part, within the 90 days following
the occurrence of such Special Event (the ''90 Day Period"), and, simultaneous
with such prepayment, to cause a Like Amount of the Securities to be redeemed by
the Trust at the Special Event Redemption Price on a Pro Rata basis.
"Investment Company Event" shall mean the receipt by the Debenture
Issuer and the Trust of an opinion of independent securities counsel experienced
in such matters to the effect that as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any rules, guidelines or policies
of any applicable regulatory authority for the Debenture Issuer or (b) any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of original
issuance of the Securities, 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.
"Regulatory Capital Event" shall mean the receipt by the Debenture
Issuer and the Trust of an opinion of independent bank regulatory counsel
experienced in such matters to the effect that as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any rules, guidelines or policies
of an applicable regulatory authority for the Debenture Issuer or (b) any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of original
issuance of the Securities, the Capital Securities do not constitute, or within
90 days of the date of such opinion will not constitute, Tier 1 Capital (or its
then equivalent if the Sponsor were subject to such capital requirement);
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 Regulatory Capital Event.
"Special Event Redemption Price" shall mean, with respect to any
redemption of the Securities following a Special Event, an amount in cash equal
to 100% of the principal amount of the Securities plus any accrued and unpaid
interest thereon (including Compounded Interest and Additional Sums, if any) to
the date of such redemption.
A "Tax Event" shall occur upon receipt by the Debenture Issuer and the
Trust of an opinion of independent tax counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or
I-4
any regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or (b) any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of original issuance of the
Securities, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Debentures,
(ii) the 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 federal income tax purposes, or (iii)
the Trust is, or will be within 90 days of the date of such opinion, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.
(d) In the case of an optional redemption, if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Capital Securities shall be redeemed Pro Rata and the Capital Securities to be
redeemed will be determined as described in Section 4(f)(ii) below. Upon the
entry of an order for the dissolution of the Trust by a court of competent
jurisdiction, the Debentures thereafter will be subject to optional redemption,
in whole, but not in part, on or after the Initial Optional Redemption Date.
(e) On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the Capital
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution, and (iii)
any certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be deemed to
represent beneficial interests in a Like Amount of Debentures until such
certificates are presented to the Debenture Issuer or its agent for transfer or
reissue.
(f) The Trust may not redeem fewer than all the outstanding Securities
unless all accumulated and unpaid Distributions have been paid on all Securities
for all semi-annual Distribution periods terminating on or before the date of
redemption.
(g) The procedure with respect to redemptions or distributions of
Securities shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
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 fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(g)(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.
Each Redemption/Distribution Notice shall be addressed to the Holders at
the address of each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or in the mailing
of either thereof with respect to any
I-5
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 Securities are
to be redeemed, the particular Securities to be redeemed shall be selected
on a Pro Rata basis (based upon Liquidation Amounts) not more than 60 nor
less than 30 days prior to the date fixed for redemption from the
outstanding Securities not previously called for redemption; provided,
--------
however, that with respect to Holders that would be required to hold less
-------
than 100 but more than zero Securities as a result of such redemption, the
Trust shall redeem Securities of each such Holder so that after such
redemption such Holder shall hold either 100 Securities or such Holder no
longer holds any Securities, and shall use such method (including, without
limitation, by lot) as the Trust shall deem fair and appropriate; provided,
--------
further, that any such redemption may be made on the basis of the aggregate
-------
Liquidation Amount of Securities held by each Holder thereof and may be
made by making such adjustments as the Trust deems fair and appropriate in
order that fractional Securities shall not thereafter remain outstanding.
With respect to Capital Securities registered in the name of and held of
record by the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) or any nominee, the distribution of the proceeds of
such redemption will be made to the Clearing Agency and disbursed by such
Clearing Agency in accordance with the procedures applied by such agency or
nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/ Distribution Notice (which notice will be irrevocable), then
(A) with respect to Capital Securities issued in book-entry form, by 12:00
noon, New York City time, on the redemption date, provided that the
-------- ----
Debenture Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures by
10:00 a.m., New York City time, on the Maturity Date or the date of
redemption, as the case requires, the Property Trustee will deposit
irrevocably with the Clearing Agency or its nominee (or successor Clearing
Agency or its nominee) immediately available funds sufficient to pay the
applicable Redemption Price with respect to such Capital Securities and
will give the Clearing Agency irrevocable instructions and authority to pay
the Redemption Price to the relevant Clearing Agency Participants, and (B)
with respect to Capital Securities issued in certificated form and Common
Securities, provided that the Debenture Issuer has paid the Property
-------- ----
Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property Trustee will
irrevocably deposit with the paying agent for the Capital Securities (if
other than the Property Trustee) funds sufficient to pay the applicable
Redemption Price to the Holders by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date, and provided further, that any such payment shall become
----------------
due only upon surrender by the Holder of the related certificated Capital
Securities. If a Redemption/ Distribution Notice shall have been given and
funds deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption date,
as applicable, Distributions will cease to accumulate on the Securities so
called for redemption and all rights of Holders so called for redemption
will cease, except the right of the Holders of such Securities to receive
the Redemption Price, but without interest on such Redemption Price, and
such Securities shall cease to be outstanding.
I-6
(iv) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Securities will be subject to the rights of Holders at the
close of business on a regular record date in respect of a Distribution
Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of (i) any Securities beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption or any notice of selection of Securities for redemption or (ii) any
Securities selected for redemption, except the unredeemed portion of any
Security being redeemed. If any date fixed for redemption of Securities is not
a Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay). If payment of the
Redemption Price with respect to any Securities is improperly withheld or
refused and not paid either by the Property Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee, Distributions on such
Securities will continue to accumulate from the original redemption date to the
actual date of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the Redemption Price.
(v) Redemption/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) with respect to Capital Securities
issued in book-entry form, the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee), (B) with respect to Capital
Securities issued in certificated form, to the Holders thereof, and (C)
with respect to the Common Securities, to the Holders thereof.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws), 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), 6(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Capital Securities will
have no voting rights.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in Liquidation Amount
of all outstanding Capital Securities; provided, however, that where a consent
-------- -------
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Capital Securities except by subsequent vote of such Holders. The
Property
I-7
Trustee shall notify each Holder of Capital Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will continue to be classified as a
grantor trust for United States federal income tax purposes after taking any
such action into account.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or interest on the Debentures on the due date (or, in the
case of redemption, on the redemption date), then a Holder of Capital Securities
may institute a proceeding directly against the Debenture Issuer for enforcement
of payment to such Holder of the principal of or interest on a Like Amount of
Debentures (a "Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the Common Securities
Holder will be subrogated to the rights of such Holder of Capital Securities to
the extent of any payment made by the Debenture Issuer to such Holder of Capital
Securities in such Direct Action. Except as provided in the second preceding
sentence, or except as set forth in the first sentence of Section 3.8(e) of the
Declaration, the Holders of Capital Securities will not be able to exercise
directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Capital Securities may be
given at a separate meeting of Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote to be mailed
to each Holder of record of Capital Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consent.
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 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 be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), 6(c), and 7 or as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
(b) Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the Holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
Holders of a Majority in Liquidation Amount of the
I-8
outstanding Capital Securities. In no event will the Holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Sponsor as the Holder of the Common Securities. No resignation or removal of a
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
(c) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.7 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in Liquidation Amount
of all outstanding Common Securities; provided, however, that where a consent
-------- -------
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Common Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Common Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Common Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Common Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will continue to be classified as a
grantor trust for United States federal income tax purposes after taking any
such action into account.
If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of Common Securities
may institute a Direct Action directly against the Debenture Issuer for
enforcement of payment to such Holder of the principal of or interest on a Like
Amount of Debentures on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the Common
Securities Holder will be subordinated to the rights of Holders of Capital
Securities in respect of any payment from the Debenture Issuer in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Common Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of 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
I-9
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 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.
-------------------------
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees without the consent of the
Holders to (i) cure any ambiguity, correct or supplement any provisions in the
Declaration that may be inconsistent with any other provisions, or make any
other provisions with respect to matters or questions arising under the
Declaration which shall not be inconsistent with the other provisions of the
Declaration, (ii) modify, eliminate or add to any provisions of the Declaration
to such extent as shall be necessary to ensure that the Trust will be classified
for United States federal income tax purposes as a grantor trust at all times
that any Securities are outstanding or to ensure that the Trust will not be
required to register as an Investment Company under the Investment Company Act
or (iii) modify, eliminate or add any provisions of the Declaration to such
extent as shall be necessary to enable the Trust or the Sponsor to conduct an
Exchange Offer in the manner contemplated by the Registration Rights Agreement;
provided, however, that in each case, such action shall not adversely affect in
- -------- -------
any material respect the interests of any Holder, and any such amendments of the
Declaration shall become effective when notice thereof is given to the Holders.
The Declaration may also be amended by the Trustees and the Sponsor with (i) the
consent of Holders representing a Majority in Liquidation Amount of all
outstanding Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Trustees in accordance with such amendment will not affect the Trust's
status as a grantor trust for United States federal income tax purposes or the
Trust's exemption from status as an Investment Company under the Investment
Company Act; provided, however, that, without the consent of each Holder of
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Trust Securities, the Declaration may not be amended to (i) change the amount or
timing of any Distribution on, or the payment required to be made in respect of,
the Trust Securities as of a specified date or (ii) restrict the right of a
Holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
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
--------
according to the aggregate liquidation amount of the Securities held by such
Holder in relation to the aggregate liquidation amount of all Securities
outstanding unless, in relation to a payment, an Event of Default under the
Declaration 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 Capital Securities
- --------
held by such Holder relative to the aggregate liquidation amount of all Capital
Securities outstanding and then, only after satisfaction of all amounts owed to
the Holders of the Capital Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held by
such Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
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9. Ranking.
-------
The Capital Securities rank pari passu with the Common Securities and
---- -----
payment thereon shall be made Pro Rata with the Common Securities, except that,
if an Event of Default under the Declaration occurs and is continuing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Capital Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and any other payments
to which they are entitled at such time.
10. Acceptance of Capital Securities Guarantee, Common Securities
-------------------------------------------------------------
Guarantee. Indenture and Debentures.
------------------------------------
Each Holder of Capital Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee, the Common Securities Guarantee, the Indenture and the Debentures, as
applicable, including the subordination provisions therein.
11. No Preemptive Rights.
--------------------
Neither the issuance of Capital Securities, nor the issuance of Common
Securities is subject to preemptive or other similar rights. The Holders shall
have no 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 Capital
Securities Guarantee or the Common Securities Guarantee, as applicable, and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Trust at its principal place of business.
I-11
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT: THIS
CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE CLEARING AGENCY TO THE TRUST OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE CLEARING AGENCY AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
THIS CAPITAL 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 LAW. NEITHER THIS CAPITAL 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, REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH GREATER BAY BANCORP
(THE "CORPORATION") OR ANY "AFFILIATE" OF THE CORPORATION WAS THE OWNER OF THIS
CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE
CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A
PERSON IT 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, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH,
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF GBB CAPITAL IV (THE "TRUST") AND THE CORPORATION PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT
THE TRANSFEROR DELIVER TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY
IN THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED MAY 16, 2000. SUCH
HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO
AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH
A "PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON
OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS" OF
ANY PLAN MAY ACQUIRE OR HOLD THE CAPITAL SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF CAPITAL SECURITIES IS NOT PROHIBITED BY SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THE CAPITAL SECURITIES OR ANY INTEREST THEREIN WILL BE
DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i)
IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA,
OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER
PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON
OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH
PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT
A1-2
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL
SECURITIES) AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF
CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000
(100 CAPITAL SECURITIES) SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER
OF SUCH 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.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
BE BOUND BY THE REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 16, 2000, BY AND
AMONG THE TRUST, THE SPONSOR AND THE INITIAL PURCHASER NAMED THEREIN, AS AMENDED
FROM TIME TO TIME.
A1-3
Certificate Number: [ ] Aggregate Liquidation Amount:
-----------------
$_______
CUSIP Number:[ ]
-------------
Certificate Evidencing Capital Securities
of
GBB Capital IV
10.75% Capital Securities, Series A
(liquidation amount $1,000 per Capital Security)
GBB Capital IV, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that [___________] (the
"Holder") is the registered owner of $_________________ in aggregate
liquidation amount of Capital Securities of the Trust/1/ [________________ is
the registered owner of the aggregate liquidation amount of Capital Securities
of the Trust specified in Schedule A hereto]/2/ representing undivided preferred
beneficial interests in the assets of the Trust designated the 10.75% Capital
Securities, Series A (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). 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
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust, dated as of May 19, 2000, as the same may be amended from
time to time (the "Declaration"), including the designation of the terms of the
Capital Securities as set forth in Annex I to the Declaration. Capitalized terms
used but not defined herein shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration, the Capital
Securities Guarantee and the Indenture (including any supplemental indenture) to
a Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By acceptance hereof, the Holder agrees, for United States federal
income tax purposes, to treat the Debentures as indebtedness and the Capital
Securities as evidence of indirect beneficial ownership in the Debentures.
______________________________
/1/ Insert in Global Capital Securities only.
/2/ Insert in Definitive Capital Securities only.
A1-4
IN WITNESS WHEREOF, the Trust has executed this certificate this
____ day of _________, _____.
GBB CAPITAL IV
By:_____________________________
Steven C. Smith
Administrative Trustee
A1-5
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 10.75% Capital Securities, Series A of GBB Capital IV
referred to in the within-mentioned Declaration.
Dated: ___________,_____
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Property Trustee
By:______________________________________
Authorized Signatory
A1-6
[FORM OF REVERSE OF SECURITY]
Distributions on each Capital Security will be payable at a fixed rate
per annum of 10.75% (the "Coupon Rate") of the liquidation amount of $1,000 per
Capital Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement and the Liquidated Damages Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement and the Liquidated
Damages Agreement) with respect to the Debentures. The term "Distributions," as
used herein, includes such cash distributions and any and all such interest and
Liquidated Damages, if any, payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
legally available therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from May 19, 2000 and will be payable semi-
annually in arrears, on June 1st and December 1st of each year, commencing
December 1, 2000, except as otherwise described below. Distributions will be
computed on the basis of a 360-day year of twelve 30-day months. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding ten consecutive semi-annual calendar
periods, including the first such semi-annual period during such extension
period (each an "Extension Period"), provided that no Extension Period shall end
-------- ----
on a date other than an Interest Payment Date for the Debentures or extend
beyond the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions (other than Liquidated Damages, if any) will also be deferred.
Notwithstanding such deferral, semi-annual Distributions will continue to
accumulate with interest thereon (to the extent permitted by applicable law, but
not at a rate exceeding the rate of interest then accruing on the Debentures) at
the Coupon Rate compounded semi-annually during any such Extension Period.
Prior to the termination of any Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
- -------- ----
extensions within such Extension Period, may not (i) exceed ten consecutive
semi-annual periods, including the first semi-annual period during such
Extension Period, (ii) end on a date other than an Interest Payment Date for the
Debentures or (iii) extend beyond the Maturity Date of the Debentures. Payments
of accumulated Distributions will be payable to Holders as they appear on the
books and records of the Trust on the record date immediately preceding the end
of the Extension Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Subject to receipt by the Sponsor of any and all required regulatory
approvals and to certain other conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time dissolve the Trust and after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, cause the Debentures to be
A1-7
distributed to the Holders of the Securities in liquidation of the Trust or,
simultaneously with any redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
A1-8
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN CON - as tenants in common
TEN ENT - as tenants in the entireties
JT TEN - as joint tenants with right of survival
UNIF GIFT MIN ACT - under Uniform Gift to Minors Act and not as tenants
Additional abbreviations may also be used though not in the above list.
________________________________
ASSIGNMENT
________________________________
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers this Capital
Security Certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
______________________________________________________________________________
(Address and Zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
to transfer this Capital 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 Capital Security
Certificate)
Signature Guarantee:___________________________________________________________
A1-9
__________________________
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 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
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A1-10
[Include the following if the Capital Security bears a Restricted Securities
Legend]
In connection with any transfer of any of the Capital Securities evidenced by
this Certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
(3) [_] transferred to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act of 1933 that is acquiring the Capital
Securities for its own account, or for the account of such an
institutional "accredited investor," for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act of 1933, as
amended; or
(4) [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933, as
amended; or
(5) [_] transferred pursuant to an effective registration statement.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Capital Securities evidenced by this Certificate in the name of any Person
other than the Holder hereof; provided, however, that if box (3) or (4) is
-------- -------
checked, the Registrar may require, prior to registering any such transfer of
the Capital Securities, such legal opinions, certifications and other
information as the Trust has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, as amended, such as
the exemption provided by Rule 144 under such Act; provided, further, that (i)
-------- -------
if box (2) is checked, by acceptance of this Certificate, the transferee shall
be deemed to have certified that it is a "qualified institutional buyer" (as
defined in Rule 144A) ("QIB") acquiring the Capital Securities for its own
account or for the account of another QIB over which it exercises sole
investment discretion and that it is aware that the Holder is relying upon the
exemption from registration afforded by Rule 144A in respect of the Holder's
transfer of Capital Securities to it or (ii) if box (3) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached to the Offering Memorandum of the Trust
dated May 16, 2000; provided, further, that after the date that a registration
-------- -------
statement has been filed and so long as such Registration Statement continues to
be effective, only then may the Registrar permit transfers for which box (5) has
been checked.
_____________________________________
Signature
A1-11
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON 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 LAW. NEITHER THIS COMMON 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, REGISTRATION.
This Certificate is not transferable except in compliance with Section 9.1(c) of
the Declaration.
Certificate Evidencing Common Securities
of
GBB Capital IV
10.75% Common Securities
(liquidation amount $1,000 per Common Security)
GBB Capital IV, a statutory business trust created under the laws of
the State of Delaware (the "Trust"), hereby certifies that Greater Bay Bancorp
(the "Holder") is the registered owner of [____] common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 10.75% Common Securities (liquidation amount $1,000 per Common
Security) (the "Common Securities"). Subject to the terms of Section 9.1(c) of
the Declaration (as defined below), the Common Securities are not transferable.
The designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated
Declaration of the Trust dated as of May 19, 2000, as the same may be amended
from time to time (the "Declaration"), including the designation of the terms of
the Common Securities as set forth in Annex I to the Declaration. Capitalized
terms used but not defined herein shall have the meaning given them in the
Declaration. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture (including any supplemental indenture) to
a Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.
By acceptance hereof, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of ____________, _____.
GBB CAPITAL IV
By:______________________________
Steven C. Smith
Administrative Trustee
13
[FORM OF REVERSE OF SECURITY]
Distributions on each Common Security will be payable at a rate of 10.75%
per annum (the "Coupon Rate") of the liquidation amount of $1000 per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one semi-
annual period will bear interest thereon compounded semi-annually at the Coupon
Rate (to the extent permitted by applicable law). Pursuant to the Registration
Rights Agreement, in certain limited circumstances the Debenture Issuer will be
required to pay Liquidated Damages (as defined in the Registration Rights
Agreement) with respect to the Debentures. The term "Distributions", as used
herein, includes such cash distributions and any and all such interest and
Liquidated Damages, if any, payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds
legally available therefor.
Distributions on the Common Securities will be cumulative, will accrue from
the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from May 19, 2000 and will be payable semi-
annually in arrears, on June 1st and December 1st of each year, commencing
December 1, 2000, except as otherwise described below. Distributions will be
computed on the basis of a 360-day year of twelve 30-day months. As long as no
Event of Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period at any time and from time to time on
the Debentures for a period not exceeding ten consecutive calendar semi-annual
periods, including the first such semi-annual period during such extension
period (each an "Extension Period"), provided that no Extension Period shall end
-------- ----
on a date other than an Interest Payment Date for the Debentures or extend
beyond the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Notwithstanding such deferral, semi-annual
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded semi-annually
during any such Extension Period. Prior to the termination of any Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
-------- ----
with all such previous and further extensions within such Extension Period, may
not (i) exceed to ten consecutive semi-annual periods, including the first semi-
annual period during such Extension Period, (ii) end on a date other than an
Interest Payment Date for the Debentures or (iii) extend beyond the Maturity
Date of the Debentures. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the record date
immediately preceding the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
Subject to the receipt by the Sponsor of any and all required regulatory
approvals and to certain other conditions set forth in the Declaration and the
Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time dissolve the Trust and cause the Debentures to be distributed to the
Holders of the Securities in liquidation of the Trust or, simultaneously with
any
14
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Declaration.
Under certain circumstances, the rights of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Capital
Securities, as provided in the Declaration.
15