AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
PEOPLES BANCORP OF NORTH CAROLINA, INC.
AS DEPOSITOR,
WILMINGTON TRUST COMPANY
AS PROPERTY TRUSTEE,
WILMINGTON TRUST COMPANY,
AS DELAWARE TRUSTEE, AND
TONY W. WOLFE,
JOSEPH F. BEAMAN,
AND
A. JOSEPH LAMPRON,
AS ADMINISTRATORS
DATED AS OF DECEMBER 19, 2001
___________________________
PEBK CAPITAL TRUST I
___________________________
PEBK CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to Sections 310 through 318
of the Trust Indenture Act of 1939:
Trust Indenture Act Section Trust Agreement Section
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Section 310 (a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . 8.7
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . 8.9
(a)(4). . . . . . . . . . . . . . . . . . . . . . . 2.7(a)(ii)
(b) . . . . . . . . . . . . . . . . . . . . . . .8.8, 10.10(b)
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . 8.13, 10.10(b)
(b) . . . . . . . . . . . . . . . . . . . . . . 8.13, 10.10(b)
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 10.10(b)
(b) . . . . . . . . . . . . . . . . . . . . . . .10.10(b), (f)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . .8.15(a)
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . 10.10(c)
(b) . . . . . . . . . . . . . . . . . . . . .8.15(c), 10.10(c)
(c) . . . . . . . . . . . . . . . . . . . . . . 10.8, 10.10(c)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . 10.10(c)
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . 8.16, 10.10(d)
(b) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1). . . . . . . . . . . . . . . . . . 8.17, 10.10(d), (e)
(c)(2). . . . . . . . . . . . . . . . . . 8.17, 10.10(d), (e)
(c)(3). . . . . . . . . . . . . . . . . . 8.17, 10.10(d), (e)
(e) . . . . . . . . . . . . . . . . . . . . . . 8.17, 10.10(e)
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(d)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(c)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1(d)
(e) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 316 (a) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A) . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(1)(B) . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2). . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7
Section 317 (a)(1). . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . 8.14
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.10
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . . 10.10(a)
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II CONTINUATION OF THE ISSUER TRUST. . . . . . . . . . . . . 12
SECTION 2.1. Name. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.2. Office of the Delaware Trustee; Principal Place of
Business. . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.3. Initial Contribution of Trust Property; Organizational
Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.4. Issuance of the Restricted Capital Securities . . . . . . 13
SECTION 2.5. Issuance of the Common Securities; Subscription and
Purchase of Junior Subordinated Debentures. . . . . . . . 13
SECTION 2.6. Declaration of Trust. . . . . . . . . . . . . . . . . . . 14
SECTION 2.7. Authorization to Enter into Certain Transactions. . . . . 14
SECTION 2.8. Assets of Trust . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.9. Title to Trust Property . . . . . . . . . . . . . . . . . 17
ARTICLE III PAYMENT ACCOUNT . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.1. Payment Account . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV DISTRIBUTIONS; REDEMPTION . . . . . . . . . . . . . . . . 18
SECTION 4.1. Distributions . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.2. Redemption. . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4.3. Subordination of Common Securities. . . . . . . . . . . . 22
SECTION 4.4. Payment Procedures. . . . . . . . . . . . . . . . . . . . 22
SECTION 4.5. Tax Returns and Reports . . . . . . . . . . . . . . . . . 23
SECTION 4.6. Payment of Taxes, Duties, Etc. of the Issuer Trust. . . . 23
SECTION 4.7. Payments under Indenture or Pursuant to Direct Actions. . 23
SECTION 4.8. Liability of the Holder of Common Securities. . . . . . . 23
ARTICLE V TRUST SECURITIES CERTIFICATES . . . . . . . . . . . . . . 24
SECTION 5.1. Initial Ownership . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.2. The Trust Securities Certificates . . . . . . . . . . . . 24
SECTION 5.3. Execution and Delivery of Trust Securities Certificates . 24
SECTION 5.4. Global Capital Securities . . . . . . . . . . . . . . . . 25
SECTION 5.5. Registration of Transfer and Exchange Generally; Certain
Transfers and Exchanges; Capital Securities Certificates;
Securities Act Legends. . . . . . . . . . . . . . . . . . 26
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates. . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.7. Persons Deemed Holders. . . . . . . . . . . . . . . . . . 30
SECTION 5.8. Access to List of Holders' Names and Addresses. . . . . . 30
SECTION 5.9. Maintenance of Office or Agency . . . . . . . . . . . . . 30
SECTION 5.10. Appointment of Paying Agent . . . . . . . . . . . . . . . 31
SECTION 5.11. Ownership of Common Securities by Depositor . . . . . . . 31
SECTION 5.12. Notices to Clearing Agency. . . . . . . . . . . . . . . . 32
SECTION 5.13. Rights of Holders . . . . . . . . . . . . . . . . . . . . 32
i
ARTICLE VI ACTS OF HOLDERS; MEETINGS; VOTING . . . . . . . . . . . . 34
SECTION 6.1. Limitations on Holders' Voting Rights . . . . . . . . . . 34
SECTION 6.2. Notice of Meetings. . . . . . . . . . . . . . . . . . . . 35
SECTION 6.3. Meetings of Holders . . . . . . . . . . . . . . . . . . . 36
SECTION 6.4. Voting Rights . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.5. Proxies, etc. . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.6. Holder Action by Written Consent. . . . . . . . . . . . . 36
SECTION 6.7. Record Date for Voting and Other Purposes . . . . . . . . 37
SECTION 6.8. Acts of Holders . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.9. Inspection of Records . . . . . . . . . . . . . . . . . . 38
ARTICLE VII REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 38
SECTION 7.1. Representations and Warranties of the Property Trustee
and the Delaware Trustee. . . . . . . . . . . . . . . . . 38
SECTION 7.2. Representations and Warranties of Depositor . . . . . . . 39
ARTICLE VIII THE ISSUER TRUSTEES; THE ADMINISTRATORS . . . . . . . . . 40
SECTION 8.1. Certain Duties and Responsibilities . . . . . . . . . . . 40
SECTION 8.2. Certain Notices . . . . . . . . . . . . . . . . . . . . . 42
SECTION 8.3. Certain Rights of Property Trustee. . . . . . . . . . . . 43
SECTION 8.4. Not Responsible for Recitals or Issuance of Securities. . 44
SECTION 8.5. May Hold Securities . . . . . . . . . . . . . . . . . . . 44
SECTION 8.6. Compensation; Indemnity; Fees . . . . . . . . . . . . . . 44
SECTION 8.7. Corporate Property Trustee Required; Eligibility of
Trustees and Administrators . . . . . . . . . . . . . . . 46
SECTION 8.8. Conflicting Interests . . . . . . . . . . . . . . . . . . 46
SECTION 8.9. Co-Trustees and Separate Trustee. . . . . . . . . . . . . 46
SECTION 8.10. Resignation and Removal; Appointment of Successor . . . . 48
SECTION 8.11. Acceptance of Appointment by Successor. . . . . . . . . . 49
SECTION 8.12. Merger, Conversion, Consolidation or Succession to
Business. . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.13. Preferential Collection of Claims Against Depositor or
Issuer Trust. . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 8.14. Trustee May File Proofs of Claim. . . . . . . . . . . . . 50
SECTION 8.15. Reports by Property Trustee . . . . . . . . . . . . . . . 51
SECTION 8.16. Reports to the Property Trustee . . . . . . . . . . . . . 51
SECTION 8.17. Evidence of Compliance with Conditions Precedent. . . . . 52
SECTION 8.18. Number of Issuer Trustees . . . . . . . . . . . . . . . . 52
SECTION 8.19. Delegation of Power . . . . . . . . . . . . . . . . . . . 52
SECTION 8.20. Appointment of Administrators . . . . . . . . . . . . . . 53
ARTICLE IX DISSOLUTION, LIQUIDATION AND MERGER . . . . . . . . . . . 53
SECTION 9.1. Dissolution Upon Expiration Date. . . . . . . . . . . . . 53
SECTION 9.2. Early Dissolution . . . . . . . . . . . . . . . . . . . . 53
SECTION 9.3. Termination . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.4. Liquidation . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of
the Issuer Trust. . . . . . . . . . . . . . . . . . . . . 56
ii
ARTICLE X MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . 57
SECTION 10.1. Limitation of Rights of Holders . . . . . . . . . . . . . 57
SECTION 10.2. Amendment . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 10.3. Separability. . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.4. Governing Law . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 10.5. Payments Due on Non-Business Day. . . . . . . . . . . . . 59
SECTION 10.6. Successors. . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.7. Headings. . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.8. Reports, Notices and Demands. . . . . . . . . . . . . . . 60
SECTION 10.9. Agreement Not to Petition . . . . . . . . . . . . . . . . 60
SECTION 10.10. Trust Indenture Act; Conflict with Trust Indenture Act. . 61
SECTION 10.11. Acceptance of Terms of Trust Agreement, Guarantee and
Indenture . . . . . . . . . . . . . . . . . . . . . . . . 62
Exhibit A Certificate of Trust
Exhibit B Form of Restricted Securities Certificate
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Capital Securities Certificate
Exhibit E Form of Placement Agreement
iii
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of December 19,
2001, is by and among (i) Peoples Bancorp of North Carolina, Inc., a North
Carolina corporation (including any successors or assigns, the "Depositor"),
---------
(ii) Wilmington Trust Company, a Delaware banking corporation, as property
trustee (in such capacity, the "Property Trustee" and, in its separate corporate
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capacity and not in its capacity as Property Trustee or Delaware Trustee, the
"Bank"), (iii) Wilmington Trust Company, a Delaware banking corporation, as
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Delaware trustee (in such capacity, the "Delaware Trustee") (the Property
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Trustee and the Delaware Trustee are referred to collectively herein as the
"Issuer Trustees"), (iv) the Administrators, as hereinafter defined, and (v) the
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several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and the Delaware Trustee have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by entering into a certain Trust Agreement, dated as of November 27,
2001 (the "Original Trust Agreement"), and by the execution and filing by the
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Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on November 27, 2001 (the "Certificate of Trust"),
--------------------
attached as Exhibit A; and
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WHEREAS, the Depositor and the Delaware Trustee desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Placement Agent Agreement, (iii)
the acquisition by the Issuer Trust from the Depositor of all of the right,
title and interest in the Junior Subordinated Debentures, (iv) the appointment
of the Administrators and (v) the addition of the Property Trustee as a party to
this Trust Agreement.
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, intending to be
legally bound, for the benefit of the other parties and for the benefit of the
Holders, hereby amends and restates the Original Trust Agreement in its entirety
and agrees, as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1. DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation";
(4) All accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States generally accepted
accounting principles as in effect at the time of determination;
(5) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Trust Agreement;
(6) The words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(7) All references to the date the Capital Securities were
originally issued shall refer to the date hereof.
"Act" has the meaning specified in Section 6.8.
"Additional Amounts" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of any Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of
Junior Subordinated Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.6 of the
Indenture.
"Administrators" means each Person appointed in accordance with
Section 8.20 solely in such Person's capacity as Administrator of the Issuer
Trust continued hereunder and not in such Person's individual capacity, or any
successor Administrator appointed as herein provided; with the initial
Administrators being Tony W. Wolfe, Joseph F. Beaman, and A. Joseph Lampron.
"Affiliate" means with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
2
"Applicable Procedures" mean, with respect to any transfer or
transaction involving a Global Capital Security or beneficial interest therein,
the rules and procedures of the Depositary for such Capital Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(1) the entry of a decree or order by a court having jurisdiction
in the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Federal or
state bankruptcy, insolvency, reorganization or other similar law, or appointing
a receiver, conservator, liquidator, assignee, trustee, sequestrator (or other
similar official) of such Person or of any substantial part of its property or
ordering the winding-up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(2) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or state bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to the
appointment of a receiver, conservator, liquidator, assignee, trustee,
sequestrator (or similar official) of such Person or of any substantial part of
its property or the making by it of an assignment for the benefit of creditors,
or the admission by it in writing of its inability to pay its debts generally as
they become due and its willingness to be adjudicated a bankrupt, or the taking
of corporate action by such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board of Directors" means the board of directors of the Depositor or
the Executive Committee of the board of directors of the Depositor (or any other
committee of the board of directors of the Depositor performing similar
functions) or a committee designated by the board of directors of the Depositor
(or any such committee), comprised of two or more members of the board of
directors of the Depositor or officers of the Depositor, or both.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the Issuer Trustees.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in the City of New York, New York, the City of
Newton, North Carolina, or the City of Wilmington, Delaware are authorized or
3
required by law or executive order to remain closed or (c) a day on which either
the Property Trustee's corporate trust office or the Debenture Trustee's
corporate trust office is closed for business.
"Capital Securities Certificate" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as Exhibit
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D, and shall, unless specified otherwise herein, include a Restricted Securities
- -
Certificate, substantially in the form attached hereto as Exhibit B. The
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Capital Securities Certificate shall be issued initially with a Restricted
Capital Securities Legend, which shall remain on such certificate until the
Depositor and the Issuer Trust receive an Opinion of Counsel that such legend
can be removed consistent with the Securities Act.
"Capital Security" means a preferred undivided beneficial interest in
the assets of the Issuer Trust, having a Liquidation Amount of $50,000.00 or an
integral multiple in excess of such amount and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Capital Treatment Event" means, in respect of the Issuer Trust, the
receipt by the Property Trustee of an Opinion of Counsel, experienced in such
matters and who may be counsel to the Depositor, and determination by the
Depositor that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action (including any action taken in connection with a
regulatory examination or in connection with or as a result of any change in
regulatory policy) or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of the issuance of the
Capital Securities of the Issuer Trust, there is more than an insubstantial risk
that the Depositor will not be entitled to treat an amount equal to the
Liquidation Amount of such Capital Securities as "Tier 1 Capital" (or the then
equivalent thereof) for purposes of the risk-based capital adequacy guidelines
of the Board of Governors of the Federal Reserve System, as then in effect and
applicable to the Depositor.
"Cede" means Cede & Co., as the nominee of the Depositary.
"Certificate of Trust" has the meaning specified in the preamble to
this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act. The Depositary shall be
the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing" and "Closing Date" have the respective meanings specified in
the Placement Agreement.
4
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the United States Securities and Exchange
Commission, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
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"Common Securities Purchase Agreement" means the Common Securities
Purchase Agreement, dated of even date herewith, between the Issuer Trust and
the Depositor, as the same may be amended from time to time.
"Common Security" means an undivided beneficial interest in the assets
of the Issuer Trust, having a Liquidation Amount of $1,000.00 and integral
multiples in excess thereof and having the rights provided therefor in this
Trust Agreement, including the right to receive Distributions and a Liquidation
Distribution as provided herein.
"Corporate Trust Office" means the principal office of the Property
Trustee located in the City of Wilmington, Delaware, which at the time of the
execution of this Trust Agreement is located at 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration.
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Purchase Agreement" means the Junior Subordinated Debenture
Purchase Agreement, dated of even date herewith, between the Depositor and the
Issuer Trust, as the same may be amended from time to time.
"Debenture Redemption Date" means, with respect to any Junior
Subordinated Debentures to be redeemed under the Indenture, the date fixed for
redemption of such Debentures under the Indenture.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Sec. 3801, et seq., as it may be amended from time to
time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Issuer Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Depositary" means The Depository Trust Company or any successor
thereto.
5
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Direct Action" has the meaning specified in Section 5.13(c).
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"Early Termination Event" has the meaning specified in Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) the occurrence of a Debenture Event of Default; or
(2) default by the Issuer Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a period
of 30 days; or
(3) default by the Issuer Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(4) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Issuer Trustees in this Trust
Agreement (other than a covenant or warranty a default in the performance of
which or the breach of which is dealt with in clause (2) or (3) above) and
continuation of such default or breach for a period of 60 days after there has
been given, by registered or certified mail, to the Issuer Trustees and the
Depositor by the Holders of at least 25% in aggregate Liquidation Amount of the
Outstanding Capital Securities, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(5) the occurrence of any Bankruptcy Event with respect to the
Property Trustee or all or substantially all of its property if a successor
Property Trustee has not been appointed within a period of 90 days thereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute thereto, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Global Capital Securities Certificate" means a Capital Securities
Certificate or Restricted Securities Certificate, as the case may be, evidencing
ownership of Capital Securities, the ownership and transfers of which shall be
made through book entries by a Clearing Agency as described in Section 5.4.
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"Global Capital Security" means those Capital Securities evidenced by
the Global Capital Securities Certificate.
"Guarantee" means the Guarantee Agreement executed and delivered by
the Depositor and the Guarantee Trustee, contemporaneously with the execution
and delivery of this Trust Agreement, for the benefit of the Holders of the
Capital Securities, as amended from time to time.
"Guarantee Trustee" means Wilmington Trust Company, solely in its
capacity as the trustee that holds the Guarantee for the benefit of the Holders
and not in its individual capacity, or its successor in interest in such
capacity, or any successor trustee appointed as herein provided.
"Holder" means a Person in whose name a Trust Security or Trust
Securities is registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Indemnified Person" has the meaning provided in Section 8.6.
"Indenture" means the Junior Subordinated Indenture, dated of even
date herewith, between the Depositor and the Indenture Trustee (as amended or
supplemented from time to time) relating to the issuance of the Junior
Subordinated Debentures.
"Indenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation and any successor.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Company Event" means the receipt by the Issuer Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Issuer
Trust is or will be considered an "investment company" that is required to be
registered under the Investment Company Act, which change or prospective change
becomes effective or would become effective, as the case may be, on or after the
date of the issuance of the Capital Securities.
"Issuer Trust" means PEBK Capital Trust I, a Delaware business trust
created under the Delaware Business Trust Act.
"Issuer Trustees" has the meaning specified in the preamble to this
Trust Agreement.
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"Junior Subordinated Debentures" means the Depositor's Floating Rate
Junior Subordinated Deferrable Interest Debentures, due December 31, 2031,
issued pursuant to the Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities pro rata based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities in connection with
a dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $50,000.00 per Capital
Security and $1,000.00 per Common Security.
"Liquidation Date" means the date on which Junior Subordinated
Debentures are to be distributed to Holders of Trust Securities in connection
with a dissolution and liquidation of the Issuer Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified in Section
9.4(d).
"Majority in Liquidation Amount of the Capital Securities" or
"Majority in Liquidation Amount of the Common Securities" means, except as
provided by the Trust Indenture Act, Capital Securities or Common Securities, as
the case may be, representing more than 50% of the aggregate Liquidation Amount
of all then Outstanding Capital Securities or Common Securities, as the case may
be.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, Vice Chairman of the Board, Chief Executive Officer, President or an
Executive Vice President, a Senior Vice President or Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Depositor, and delivered to the party provided herein. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(1) a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;
(2) a brief statement of the nature and scope of the examination
or investigation undertaken by such officer in rendering the Officers'
Certificate;
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(3) a statement that 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
(4) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.
"Original Trust Agreement" has the meaning specified in the preamble
to this Trust Agreement.
"Outstanding," with respect to Trust Securities, means, as of the date
of determination, all Trust Securities theretofore executed and delivered under
this Trust Agreement, except:
(1) Trust Securities theretofore canceled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(2) Trust Securities for whose payment or redemption cash in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Capital Securities, provided that if such
Trust Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Trust Agreement; and
(3) Trust Securities that have been paid or for which other Trust
Securities which have been executed and delivered in exchange therefor or in
lieu thereof pursuant to Sections 5.4, 5.5 and 5.6; provided, however, that in
determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Capital Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Capital Securities owned by the
Depositor, any Issuer Trustee, any Administrator or any Affiliate of the
Depositor, shall be disregarded and deemed not to be Outstanding, except that
(a) in determining whether any Issuer Trustee or any Administrator shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Capital Securities that such Issuer Trustee or
such Administrator, as the case may be, knows to be so owned shall be so
disregarded and (b) the foregoing shall not apply at any time when all of the
Outstanding Capital Securities are owned by the Depositor, one or more of the
Issuer Trustees, one or more of the Administrators and/or any such Affiliate.
Capital Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Administrators the pledgee's right so to act with respect to such Capital
Securities and that the pledgee is not the Depositor or any Affiliate of the
Depositor.
"Owner" means each Person who is the beneficial owner of Global
Capital Securities as reflected in the records of the Clearing Agency or, if a
Clearing Agency Participant is not the Owner, then as reflected in the records
of a Person maintaining an account with such Clearing Agency (directly or
indirectly), in accordance with the rules of such Clearing Agency.
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"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained with the Property Trustee in its trust department for
the benefit of the Holders in which all amounts paid in respect of the Junior
Subordinated Debentures will be held and from which the Property Trustee,
through the Paying Agent, shall make payments to the Holders in accordance with
Sections 4.1, 4.2 and 9.4.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated organization or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
"Placement Agent" means The Bankers Bank, a Georgia banking
corporation.
"Placement Agreement" means the Placement Agent Agreement among the
Depositor, the Issuer Trust and the Placement Agent.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Property Trustee of the Issuer Trust and not in its individual capacity, or its
successor in interest in such capacity, or any successor property trustee
appointed as herein provided.
"Purchase Agreement" means, collectively, all purchase agreements
executed by or on behalf of the Depositor, the Issuer Trust, and the Owners.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Junior Subordinated Debentures shall be a Redemption Date for a Like
Amount of Trust Securities, including but not limited to any date of redemption
pursuant to the occurrence of any Special Event.
"Redemption Price" means a price equal to the Liquidation Amount,
together with accumulated Distributions to, but excluding, the date fixed for
redemption.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Responsible Officer" when used with respect to the Property Trustee
means any officer assigned to the Corporate Trust Office, including any managing
director, vice president, principal, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration of
the Indenture, and also, with respect to a particular matter, any other officer
to whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
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"Restricted Capital Securities" means all Capital Securities,
including those represented by a Capital Securities Certificate which is
required pursuant to Section 5.5(c) to bear a Restricted Capital Securities
Legend. Such term includes the Global Capital Securities Certificate.
"Restricted Capital Securities Legend" means a legend substantially in
the form of the legend required in the form of a Capital Securities Certificate
set forth in Exhibit D to be placed upon a Restricted Capital Security.
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"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit B.
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"Securities Act" means the Securities Act of 1933, as amended, and any
successor statute thereto, in each case as amended from time to time.
"Senior Indebtedness" has the meaning specified in the Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.5.
"Special Event" means any Tax Event, Capital Treatment Event or
Investment Company Event.
"Successor Capital Securities Certificate" of any particular Capital
Securities Certificate means every Capital Securities Certificate issued after,
and evidencing all or a portion of the same beneficial interest in the Issuer
Trust as that evidenced by, such particular Capital Securities Certificate; and,
for the purposes of this definition, any Capital Securities Certificate executed
and delivered under Section 5.6 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Capital Securities Certificate shall be deemed to
evidence the same beneficial interest in the Issuer Trust as the mutilated,
destroyed, lost or stolen Capital Securities Certificate.
"Successor Capital Securities" has the meaning specified in Section
9.5.
"Tax Event" means the receipt by the Issuer Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement, action or decision is announced on or after
the date of issuance of the Capital Securities (including, without limitation,
any of the foregoing arising with respect to, or resulting from, any proceeding
or other action commencing on or before such date), there is more than an
insubstantial risk that (i) the Issuer Trust is, or will be within 90 days of
the delivery of such Opinion of Counsel, subject to United States federal income
tax with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Depositor on the Junior Subordinated
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Debentures is not, or within 90 days of the delivery of such Opinion of Counsel
will not be, deductible by the Depositor, in whole or in part, for United States
federal income tax purposes, or (iii) the Issuer Trust is, or will be within 90
days of the delivery of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including (i) all exhibits hereto, and (ii) for
all purposes of this Amended and Restated Trust Agreement any such modification,
amendment or supplement, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Amended and Restated Trust Agreement and
any modification, amendment or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 or any
successor statute, in each case as amended from time to time.
"Trust Property" means (a) the Junior Subordinated Debentures, (b) any
cash on deposit in, or owing to, the Payment Account, (c) all proceeds and
rights in respect of the foregoing and (d) any other property and assets for the
time being held or deemed to be held by the Property Trustee pursuant to the
trusts of this Trust Agreement.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Capital Securities Certificates.
"Trust Security" means any one of the Common Securities or the Capital
Securities.
ARTICLE II
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. NAME.
The Issuer Trust continued hereby shall be known as "PEBK Capital
Trust I", as such name may be modified from time to time by the Administrators
following written notice to the Holders of Trust Securities and the Issuer
Trustees, in which name the Administrators and the Issuer Trustees may engage in
the transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Issuer Trust and sue and be sued.
SECTION 2.2. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS.
The address of the Delaware Trustee in the State of Delaware is
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware
19890-0001, Wilmington, Delaware 19805-1266, Attention: Corporate Trust
Administration, or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Holders and the Depositor. The
principal executive office of the Issuer Trust is in care of Peoples Bancorp of
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North Carolina, Inc., 518 West C Street, Newton, North Carolina 28658,
Attention: Tony W. Wolfe.
SECTION 2.3. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL
EXPENSES.
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10.00, which
constitutes the initial Trust Property. The Depositor shall pay all
organizational expenses of the Issuer Trust as they arise or shall, upon request
of any Issuer Trustee, promptly reimburse such Issuer Trustee for any such
expenses paid by such Issuer Trustee. The Depositor shall make no claim upon
the Trust Property for the payment of such expenses.
SECTION 2.4. ISSUANCE OF THE RESTRICTED CAPITAL SECURITIES.
The Depositor, the Issuer Trust, and the Placement Agent executed and
delivered the Placement Agreement pursuant to the Original Trust Agreement.
Contemporaneously with the execution and delivery of this Trust Agreement, an
Administrator, on behalf of the Issuer Trust, shall manually execute in
accordance with Section 5.3 and the Property Trustee shall authenticate in
accordance with Section 5.3 and deliver to the Clearing Agency or its custodian,
a Global Capital Securities Certificate, registered in the name of Cede & Co.,
in an aggregate amount of 280 Capital Securities having an aggregate Liquidation
Amount of $14,000,000.00, against receipt of the aggregate purchase price of
such Capital Securities of $14,000,000.00, by the Property Trustee.
SECTION 2.5. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND
PURCHASE OF JUNIOR SUBORDINATED DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrator, on behalf of the Issuer Trust, shall execute in
accordance with Section 5.3 and the Property Trustee shall authenticate and
shall deliver to the Depositor, Common Securities Certificates, registered in
the name of the Depositor, having an aggregate Liquidation Amount of $433,000.00
against receipt of the aggregate purchase price of such Common Securities of
$433,000.00 by the Property Trustee. Contemporaneously therewith, an
Administrator, on behalf of the Issuer Trust, shall subscribe for and purchase
from the Depositor the Junior Subordinated Debentures, registered in the name of
the Issuer Trust and having an aggregate principal amount equal to
$14,433,000.00, and, in satisfaction of the purchase price for such Junior
Subordinated Debentures, the Property Trustee, on behalf of the Issuer Trust,
shall deliver to the Depositor the sum of $14,433,000.00 (being the sum of the
amounts delivered to the Property Trustee pursuant to (i) the second sentence of
Section 2.4, and (ii) the first sentence of this Section 2.5) and receive on
behalf of the Issuer Trust the Junior Subordinated Debentures.
SECTION 2.6. DECLARATION OF TRUST.
The exclusive purposes and functions of the Issuer Trust are to (a)
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Junior Subordinated Debentures, and (b) engage in only those other
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activities necessary, convenient or incidental thereto. The Depositor hereby
appoints the Issuer Trustees as trustees of the Issuer Trust, to have all the
rights, powers and duties to the extent set forth herein, and the Issuer
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein for the benefit of the Issuer Trust and the Holders. The
Depositor hereby appoints the Administrators, with such Administrators having
all rights, powers and duties set forth herein with respect to accomplishing the
purposes of the Issuer Trust, and the Administrators hereby accept such
appointment; provided, however, that it is the intent of the parties hereto that
such Administrators shall not be trustees or, to the fullest extent permitted by
law, fiduciaries with respect to the Issuer Trust and this Trust Agreement shall
be construed in a manner consistent with such intent. The Property Trustee
shall have the right and power (but shall not be obligated) to perform those
duties assigned to the Administrators. The Delaware Trustee, in such capacity,
shall not be entitled to exercise any powers, nor shall the Delaware Trustee, in
such capacity, have any of the duties and responsibilities, of the Property
Trustee or the Administrators set forth herein. The Delaware Trustee, in such
capacity, shall be one of the trustees of the Issuer Trust for the sole and
limited purpose of fulfilling the requirements of Section 3807 of the Delaware
Business Trust Act and for taking such actions as are required to be taken by a
Delaware trustee under the Delaware Business Trust Act.
SECTION 2.7. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Issuer Trustees and the Administrators shall conduct the
affairs of the Issuer Trust in accordance with the terms of this Trust
Agreement. Subject to the limitations set forth in paragraph (b) of this
Section and in accordance with the following provisions (i), (ii) and (iii), the
Issuer Trustees and the Administrators shall act as follows:
(i) each Administrator, acting jointly or singly, shall:
(A) comply with the Placement Agreement regarding the
issuance and sale of the Trust Securities;
(B) assist in compliance with the Securities Act,
applicable state securities or blue sky laws, and the Trust Indenture
Act;
(C) assist in the listing of the Capital Securities upon
such securities exchange or exchanges, if any, as shall be determined
by the Depositor, with the registration of the Capital Securities
under the Exchange Act, if required or if requested by the Depositor,
and the preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(D) execute the Trust Securities on behalf of the Issuer
Trust in accordance with this Trust Agreement;
(E) execute and deliver an application for a taxpayer
identification number for the Issuer Trust;
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(F) assist in the filing with the Commission, at such
time as determined by the Depositor, any registration statement, if
any, under the Securities Act relating to the Trust Securities,
including any amendments thereto;
(G) unless otherwise required by the Trust Indenture
Act, execute on behalf of the Issuer Trust any documents that the
Administrators have the power to execute pursuant to this Trust
Agreement, including without limitation, the Debenture Purchase
Agreement and the Common Securities Purchase Agreement; and
(H) take any action incidental to the foregoing as
necessary or advisable to give effect to the terms of this Trust
Agreement.
(ii) The Property Trustee shall have the power and authority
to act on behalf of the Issuer Trust with respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Junior Subordinated Debentures;
(C) the receipt and collection of interest, principal
and any other payments made in respect of the Junior Subordinated
Debentures in the Payment Account;
(D) the distribution of amounts owed to the Holders in
respect of the Trust Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Junior Subordinated Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Junior Subordinated
Debentures to the Holders thereof in accordance with this Trust
Agreement;
(G) the distribution of the Trust Property in accordance
with the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the
winding-up of the affairs of and liquidation of the Issuer Trust and
the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of Delaware; and
(I) after an Event of Default (other than under
paragraph (2), (3), (4), or (5) of the definition of such term if such
Event of Default is by or with respect to the Property Trustee),
comply with the provisions of this Trust Agreement and take any action
15
to give effect to the terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of the Holders (without
consideration of the effect of any such action on any particular
Holder);
provided, however, that nothing in this Section 2.7(a)(ii) shall require
the Property Trustee to take any action that is not otherwise required in
this Trust Agreement.
(iii) The Administrators shall comply with the listing
requirements of the Capital Securities upon such securities exchange or
exchanges, if any, as shall be determined by the Depositor, the
registration of the Capital Securities under the Exchange Act, if required
or if requested by the Depositor, and the preparation and filing of all
periodic and other reports and other documents pursuant to the foregoing.
(b) So long as this Trust Agreement remains in effect, the Issuer
Trust (or the Issuer Trustees or Administrators acting on behalf of the Issuer
Trust) shall not undertake any business, activity or transaction except as
expressly provided herein or contemplated hereby. In particular, neither the
Issuer Trustees nor the Administrators shall (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Holders, except as
expressly provided herein, (iii) take any action that would cause the Issuer
Trust to become taxable other than as a grantor trust for United States Federal
income tax purposes, (iv) incur any indebtedness for borrowed money or issue any
other debt, or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property, except as expressly provided
herein. The Property Trustee shall defend all claims and demands of all Persons
at any time claiming any Lien on any of the Trust Property adverse to the
interest of the Issuer Trust or the Holders in their capacity as Holders.
(c) In connection with the issue and sale of the Capital
Securities, the Depositor shall have the right and responsibility to assist the
Issuer Trust with respect to, or effect on behalf of the Issuer Trust, the
following (and any actions taken by the Depositor in furtherance of the
following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):
(i) the preparation, execution and filing with the
Commission of a registration statement on the appropriate form under the
Securities Act or the preparation of offering documents in reliance on one
or more exemptions from registration under the Securities Act with respect
to the Capital Securities;
(ii) the determination of the states in which to take
appropriate action to qualify or register for sale or necessary to obtain
any exemption from such qualification or registration of all or part of the
Capital Securities and the determination of any and all such acts, other
than actions that must be taken by or on behalf of the Issuer Trust, and
the advice to the Issuer Trustees of actions they must take on behalf of
the Issuer Trust, and the preparation for execution and filing of any
documents to be executed and filed by the Issuer Trust or on behalf of the
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Issuer Trust, as the Depositor deems necessary or advisable in order to
comply with the applicable laws of any such States in connection with the
offer and sale of the Capital Securities;
(iii) the negotiation of the terms of, and the execution
and delivery of, the Placement Agreement and the Purchase Agreement
providing for the sale of the Capital Securities; and
(iv) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrators and the Property Trustee are authorized and directed to conduct
the affairs of the Issuer Trust and to operate the Issuer Trust so that the
Issuer Trust will not be deemed to be an "investment company" required to be
registered under the Investment Company Act, and will not be taxable other than
as a grantor trust for United States Federal income tax purposes and so that the
Junior Subordinated Debentures will be treated as indebtedness of the Depositor
for United States Federal income tax purposes. In this connection, the Property
Trustee and the Holders of Common Securities are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that the Property Trustee and Holders of Common Securities determine
in their discretion to be necessary or desirable for such purposes, as long as
such action does not adversely affect in any material respect the interests of
the Holders of the Outstanding Capital Securities. In no event shall the
Administrators or the Issuer Trustees be liable to the Issuer Trust or the
Holders for any failure to comply with this Section that results from a change
in law or regulations or in the interpretation thereof.
SECTION 2.8. ASSETS OF TRUST.
The assets of the Issuer Trust shall consist solely of the Trust
Property.
SECTION 2.9. TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Issuer Trust and the Holders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1. PAYMENT ACCOUNT.
(a) At or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and its agents shall have
exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
17
Property Trustee in the Payment Account for the exclusive benefit of the Holders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Junior Subordinated Debentures.
Amounts held in the Payment Account shall not be invested by the Property
Trustee pending distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. DISTRIBUTIONS.
(a) The Trust Securities represent undivided beneficial interests
in the Trust Property, and Distributions (including of Additional Amounts) will
be made on the Trust Securities at the rate and on the dates that payments of
interest (including of Additional Interest, as defined in the Indenture) are
made on the Junior Subordinated Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative
and will accumulate whether or not there are funds of the Issuer Trust
available for the payment of Distributions. Distributions shall accumulate
from the date of issue of the Trust Securities, and, except in the event
(and to the extent) that the Depositor exercises its right to defer the
payment of interest on the Junior Subordinated Debentures pursuant to the
Indenture, shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on December 31, 2001.
If any date on which a Distribution is otherwise payable on the Trust
Securities is not a Business Day, then the payment of such Distribution
shall be made on the next succeeding day that is a Business Day (without
any additional Distributions or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on the
date on which such payment was originally payable (each date on which
distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date").
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(ii) The Trust Securities shall be entitled to Distributions
payable at a floating rate, reset quarterly on each Distribution Date for
the next succeeding quarter, equal to the prime rate of interest so
published in the "Money Rates" table in the Eastern Edition of The Wall
Street Journal for the last Business Day of each of March, June, September
and December, as applicable, plus 50 basis points on the liquidation amount
of each Trust Security ("Floating Rate"). If more than one rate is so
--------------
indicated in The Wall Street Journal, the prime rate shall equal the
highest rate provided therein. The amount of Distributions payable for any
full quarterly period shall be computed on the basis of a 360-day year of
twelve 30-day months. The amount of Distributions for any period less than
a full quarter shall be computed on the basis of a 360-day year and the
18
actual number of days elapsed during that period. The amount of
Distributions payable for any period shall include any Additional Amounts
in respect of such period.
(iii) So long as no Debenture Event of Default has occurred
and is continuing, the Depositor has the right under the Indenture to defer
the payment of interest on the Junior Subordinated Debentures at any time
and from time to time for a period not exceeding 20 consecutive quarterly
periods (an "Extension Period"), provided that no Extension Period may
-----------------
extend beyond December 31, 2031 or end on a date that is not a scheduled
interest payment date. As a consequence of any such deferral, quarterly
Distributions on the Trust Securities by the Issuer Trust will also be
deferred and the amount of Distributions to which Holders of the Trust
Securities are entitled will accumulate additional Distributions thereon at
the Floating Rate, compounded quarterly, to the extent permitted by
applicable law, from the relevant payment date for such Distributions,
computed in the same manner as set forth for Distributions in subsection
4.1(a)(ii) immediately above. The term "Distributions" as used in Section
4.1 shall include any such additional Distributions provided pursuant to
this Section 4.1(a)(iii).
(iv) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Issuer Trust has funds then
on hand and available in the Payment Account for the payment of such
Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day of the month in which the relevant Distribution Date occurs (or if such date
is not a Business Day, the immediately preceding Business Day).
SECTION 4.2. REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity
of the Junior Subordinated Debentures, the Issuer Trust will be required to
redeem a Like Amount of Trust Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price, or if the Redemption Price cannot
be calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to the Indenture
together with a statement that it is an estimate and that the actual
Redemption Price will be calculated on the third Business Day prior to the
Redemption Date (and if an estimate is provided, a further notice shall be
19
sent of the actual Redemption Price on the date, or as soon as practicable
thereafter, that notice of such actual Redemption Price is received
pursuant to the Indenture);
(iii) the CUSIP number or CUSIP numbers of the Capital
Securities affected;
(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed and
that Distributions thereon will cease to accumulate on and after said date,
except as provided in Section 4.2(d) below; and
(vi) the place or places where Trust Securities are to be
surrendered for the payment of the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP" or
"private placement" numbers (if then generally in use), and, if so, the Property
Trustee shall indicate the "CUSIP" or "private placement" numbers of the Trust
Securities in notices of redemption and related materials as a convenience to
Holders; provided, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Trust Securities
or as contained in any notice of redemption and related material.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of Junior Subordinated Debentures. Redemptions of
the Trust Securities shall be made and the Redemption Price shall be payable on
each Redemption Date only to the extent that the Issuer Trust has funds then on
hand and available in the Payment Account for the payment of such Redemption
Price.
(d) If the Issuer Trust gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, Eastern Time, on the Redemption
Date, subject to Section 4.2(c), the Property Trustee will, with respect to
Capital Securities held in global form, irrevocably deposit with the Clearing
Agency for such Capital Securities, to the extent available therefor, funds
sufficient to pay the applicable Redemption Price and will give such Clearing
Agency irrevocable instructions and authority to pay the Redemption Price to the
Holders of the Capital Securities. With respect to Capital Securities that are
not held in global form, if any, the Property Trustee, subject to Section
4.2(c), will irrevocably deposit with the Paying Agent, to the extent available
therefor, funds sufficient to pay the applicable Redemption Price and will give
the Paying Agent irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Capital Securities upon surrender of their Capital
Securities Certificates or Restricted Securities Certificates, as applicable.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Securities
20
Register for the Trust Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then, upon the date of such deposit, all rights of
Holders holding Trust Securities so called for redemption will cease, except the
right of such Holders to receive the Redemption Price and any Distribution
payable in respect of the Trust Securities on or prior to the Redemption Date,
but without interest, and such Trust Securities will cease to be Outstanding.
In the event that any date on which any applicable Redemption Price is payable
is not a Business Day, then payment of the applicable Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day, in each case, with the same
force and effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities will
continue to accumulate, as set forth in Section 4.1 and in accordance with the
continued accrual of interest on the Junior Subordinated Debentures, from the
Redemption Date originally established by the Issuer Trust for such Trust
Securities to the date such applicable Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the applicable Redemption Price.
(e) Subject to Section 4.3(a), if less than all the Outstanding
Trust Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Trust Securities to be redeemed shall be allocated
pro rata to the Common Securities and the Capital Securities based on the
relative aggregate Liquidation Amounts of such classes. The particular Capital
Securities to be redeemed shall be selected on a pro rata basis based on their
respective Liquidation Amounts not more than 60 days prior to the Redemption
Date by the Property Trustee from the Outstanding Capital Securities not
previously called for redemption, or if the Capital Securities are then held in
the form of a Global Preferred Security in accordance with the customary
procedures for the Clearing Agency. The Property Trustee shall promptly notify
the Securities Registrar in writing of the aggregate Liquidation Amount of
Capital Securities to be redeemed and the particular Capital Securities selected
for redemption. For all purposes of this Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Capital
Securities shall relate, in the case of any Capital Securities redeemed, to the
portion of the aggregate Liquidation Amount of Capital Securities that has been
or is to be redeemed.
SECTION 4.3. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, the Redemption Price of, and the Liquidation Distribution in
respect of, the Trust Securities, as applicable, shall be made, as set forth in
Section 4.2(e), pro rata among the Common Securities and the Capital Securities
based on the Liquidation Amount of such Trust Securities; provided, however,
that if on any Distribution Date or Redemption Date any Event of Default
resulting from a Debenture Event of Default in Sections 5.1(1) or 5.1(2) of the
21
Indenture shall have occurred and be continuing, no payment of any Distribution
(including any Additional Amounts) on, Redemption Price of, or Liquidation
Distribution in respect of, any Common Security, and no other payment on account
of the redemption, liquidation or other acquisition of Common Securities, shall
be made, unless payment in full in cash of all accumulated and unpaid
Distributions (including any Additional Amounts) on all Outstanding Capital
Securities for all Distribution periods terminating on or prior thereto, or, in
the case of payment of the Redemption Price, the full amount of such Redemption
Price on all Outstanding Capital Securities then called for redemption, or in
the case of payment of the Liquidation Distribution, the full amount of such
Liquidation Distribution on all Outstanding Capital Securities, shall have been
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Amounts) on, or the Redemption Price of,
or Liquidation Distribution in respect of, Capital Securities then due and
payable. The existence of an Event of Default does not entitle the Holders of
Capital Securities to accelerate the maturity thereof.
(b) In the case of the occurrence of any Event of Default
resulting from any Debenture Event of Default, the Holder of the Common
Securities shall be deemed to have waived any right to act with respect to any
such Event of Default under this Trust Agreement until the effects of all such
Events of Default with respect to the Capital Securities have been cured, waived
or otherwise eliminated. Until all such Events of Default under this Trust
Agreement with respect to the Capital Securities have been so cured, waived or
otherwise eliminated, to the fullest extent permitted by applicable law, the
Property Trustee shall act solely on behalf of the Holders of the Capital
Securities and not on behalf of the Holder of the Common Securities, and only
the Holders of the Capital Securities will have the right to direct the Property
Trustee to act on their behalf.
SECTION 4.4. PAYMENT PROCEDURES.
Payments of Distributions (including any Additional Amounts) in
respect of the Capital Securities shall be made by check mailed to the address
of the Person entitled thereto as such address shall appear on the Securities
Register or, if the Capital Securities are held by a Clearing Agency, such
Distributions shall be made to the Clearing Agency in immediately available
funds, which will credit the relevant accounts on the applicable Distribution
Dates. Payments in respect of the Common Securities shall be made in such
manner as shall be mutually agreed between the Property Trustee and the Holder
of the Common Securities.
SECTION 4.5. TAX RETURNS AND REPORTS.
The Administrators shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Issuer Trust. In this regard, the Administrators shall (a) prepare and file (or
cause to be prepared and filed) all Internal Revenue Service forms required to
be filed in respect of the Issuer Trust in each taxable year of the Issuer Trust
and (b) prepare and furnish (or cause to be prepared and furnished) to each
Holder all Internal Revenue Service forms required to be provided by the Issuer
Trust. The Administrators shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
22
furnishing. The Issuer Trustees shall comply with United States Federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Holders under the Trust Securities.
On or before December 15 of each year during which any Capital
Securities are Outstanding, the Administrators shall furnish to the Paying Agent
such information as may be reasonably requested by the Property Trustee in order
that the Property Trustee may prepare the information which it is required to
report for such year on Internal Revenue Service Forms 1096 and 1099 pursuant to
Section 6049 of the Code. Such information shall include the amount of original
issue discount includable in income for each Outstanding Capital Security during
such year, if any.
SECTION 4.6. PAYMENT OF TAXES, DUTIES, ETC. OF THE ISSUER TRUST.
Upon receipt under the Junior Subordinated Debentures of Additional
Sums, the Property Trustee shall promptly pay any taxes, duties or governmental
charges of whatsoever nature (other than withholding taxes) imposed on the
Issuer Trust by the United States or any other taxing authority out of the
proceeds of the Additional Sums.
SECTION 4.7. PAYMENTS UNDER INDENTURE OR PURSUANT TO DIRECT ACTIONS.
Any amount payable hereunder to any Holder of Capital Securities shall
be reduced by the amount of any corresponding payment such Holder (or Owner) has
directly received pursuant to Section 5.8 of the Indenture or Section 5.13 of
this Trust Agreement.
SECTION 4.8. LIABILITY OF THE HOLDER OF COMMON SECURITIES.
The Holder of Common Securities shall be liable for the debts and
obligations of the Issuer Trust as set forth in Section 6.7 of the Indenture
regarding allocation of expenses.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1. INITIAL OWNERSHIP.
Upon the creation of the Issuer Trust and the contribution by the
Depositor pursuant to Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are Outstanding,
the Depositor shall be the sole beneficial owner of the Issuer Trust.
SECTION 5.2. THE TRUST SECURITIES CERTIFICATES.
(a) The Capital Securities Certificates shall be issued in fully
registered form. The Trust Securities Certificates shall be executed on behalf
of the Issuer Trust by manual or facsimile signature of at least one
Administrator. Trust Securities Certificates bearing the manual or facsimile
23
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Issuer Trust, shall be validly
issued and entitled to the benefits of this Trust Agreement, notwithstanding
that such individuals or any of them shall have ceased to be so authorized prior
to the delivery of such Trust Securities Certificates or did not hold such
offices at the date of delivery of such Trust Securities Certificates. A
transferee of a Trust Securities Certificate shall become a Holder, and shall be
entitled to the rights and subject to the obligations of a Holder hereunder,
upon due registration of such Trust Securities Certificate in such transferee's
name pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities Certificates
shall be issued in the form of one or more Global Capital Securities
Certificates which initially shall bear a Restricted Capital Securities Legend,
registered in the name of Cede as the Depositary's nominee and deposited with or
on behalf of Depositary for credit by Depositary to the respective accounts of
the Owners thereof (or such other accounts as they may direct). Except as set
forth herein, record ownership of the Global Capital Securities may be
transferred, in whole or in part, only to another nominee of Depositary or to a
successor of the Depository or its nominee.
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.3. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
At the Closing, an Administrator shall execute, on behalf of the
Trust, Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 2.4 and 2.5, and deliver such Trust Securities Certificates
to the Property Trustee for authentication. Upon such delivery, the Property
Trustee shall authenticate such Trust Securities Certificates and deliver such
Trust Securities Certificates upon the written order of the Trust, executed by
an Administrator thereof, without further corporate action by the Depositor, in
authorized denominations.
SECTION 5.4. GLOBAL CAPITAL SECURITIES.
(a) The Global Capital Security issued under this Trust Agreement
shall be registered in the name of Cede & Co., as the nominee of the Clearing
Agency and delivered to such custodian therefor, and such Global Capital
Security shall constitute a single Capital Security for all purposes of this
Trust Agreement, and it shall initially bear a Restricted Capital Securities
Legend.
(b) Notwithstanding any other provision in this Trust Agreement,
the Global Capital Security may not be exchanged in whole or in part for
registered Capital Securities, and no transfer of the Global Capital Security in
whole or in part may be registered, in the name of any Person other than the
Clearing Agency for such Global Capital Security, Cede & Co., or other nominee
thereof unless: (i) such Clearing Agency advises the Depositor and the Property
Trustee in writing that such Clearing Agency is no longer willing or able to
properly discharge its responsibilities as the Clearing Agency with respect to
24
such Global Capital Security, and the Depositor is unable to locate a qualified
successor within 90 days, (ii) at any time the Depositary ceases to be a
Clearing Agency registered as such under the Exchange Act, or (iii) the Issuer
Trust at its option advises the Depositary in writing that it elects to
terminate the book-entry system through the Clearing Agency.
(c) If the Global Capital Security is to be exchanged or canceled
in whole, it shall be surrendered by or on behalf of the Clearing Agency or its
nominee to the Securities Registrar for exchange or cancellation as provided in
this Article V. If the Global Capital Security is to be exchanged or canceled
in part, or if another Capital Security is to be exchanged in whole or in part
for a beneficial interest in the Global Capital Security, then either: (i) such
Global Capital Security shall be so surrendered for exchange or cancellation as
provided in this Article V, or (ii) the Liquidation Amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so
exchanged or canceled or equal to the Liquidation Amount of such other Capital
Security to be so exchanged for a beneficial interest therein, as the case may
be, by means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Property Trustee, in accordance with the Applicable
Procedures, shall instruct the Clearing Agency or its authorized representative
to make a corresponding adjustment to its records. Upon any such surrender or
adjustment of the Global Capital Security by the Clearing Agency, accompanied by
registration instructions, the Property Trustee shall, subject to Section 5.4(b)
and as otherwise provided in this Article V, authenticate and deliver any
Capital Securities or Restricted Capital Securities, as applicable and as
instructed by the Administrators, issuable in exchange for such Global Capital
Security (or any portion thereof) in accordance with the instructions of the
Clearing Agency. The Property Trustee shall not be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be fully
protected in relying on, such instructions.
(d) Every Capital Security or Restricted Capital Securities
authenticated and delivered upon registration of, transfer of, or in exchange
for or in lieu of, the Global Capital Security or any portion thereof, whether
pursuant to this Article V or Article IV or otherwise, shall be authenticated
and delivered in the form of, and shall be, a Global Capital Security, unless
such Global Capital Security is registered in the name of a Person other than
the Clearing Agency for such Global Capital Security or a nominee thereof.
(e) The Clearing Agency or its nominee, as the registered owner of
the Global Capital Security, shall be considered the Holder of the Capital
Securities or the Restricted Capital Securities represented by the Global
Capital Security for all purposes under this Trust Agreement and the Capital
Securities, and owners of beneficial interests in the Global Capital Security
shall hold such interests pursuant to the Applicable Procedures and, except as
otherwise provided herein, shall not be entitled to have any of the individual
Capital Securities or the Restricted Capital Securities represented by the
Global Capital Security registered in their names, shall not receive nor be
entitled to receive physical delivery of any such Capital Securities or the
Restricted Capital Securities in definitive form and shall not be considered the
Holders thereof under this Trust Agreement. Accordingly, any such owner's
beneficial interest in the Global Capital Security shall be shown only on, and
the transfer of such interest shall be effected only through, records maintained
25
by the Clearing Agency or its nominee. Neither the Property Trustee nor the
Securities Registrar shall have any liability in respect of any transfers
effected by the Clearing Agency.
(f) The rights of owners of beneficial interests in the Global
Capital Security shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such owners and
the Clearing Agency.
SECTION 5.5. REGISTRATION OF TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES; CAPITAL SECURITIES CERTIFICATES; SECURITIES ACT
LEGENDS.
(a) The Property Trustee shall keep or cause to be kept at its
Corporate Trust Office a register or registers (the "Securities Register") for
-------------------
the purpose of registering Capital Securities Certificates and Common Securities
Certificates and transfers and exchanges of Capital Securities Certificates and
Common Securities Certificates and acting as the registrar and transfer agent
with respect to the Capital Securities and Common Securities Certificates (the
"Securities Registrar"), subject to such reasonable regulations as it may
---------------------
prescribe, and shall provide for the registration of Capital Securities
Certificates and Common Securities Certificates (subject to Section 5.11 in the
case of Common Securities Certificates) in the Securities Register. The
Property Trustee is hereby appointed Securities Registrar. The Securities
Registrar shall maintain stop transfer instructions in the Securities Register
and as it otherwise deems appropriate to restrict the transfer of Restricted
Capital Securities consistent with the terms of this Agreement.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the offices or agencies of the Property Trustee designated for
that purpose, the Administrators shall execute, and the Property Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Capital Securities Certificates of the same series
of any authorized denominations of like tenor and aggregate principal amount and
bearing such restrictive legends (including the Restricted Capital Securities
Legend) as may be required by this Trust Agreement.
At the option of the Holder, Capital Securities Certificates may be
exchanged for other Capital Securities Certificates of any authorized
denominations, of like tenor and aggregate Liquidation Amount and bearing such
restrictive legends (including the Restricted Capital Securities Legend) as may
be required by this Trust Agreement, upon surrender of the Capital Securities
Certificates to be exchanged at such office or agency of the Property Trustee.
Whenever any securities are so surrendered for exchange, the Administrators
shall execute and the Property Trustee shall authenticate and deliver the
Capital Securities Certificates that the Holder making the exchange is entitled
to receive.
All Capital Securities issued upon any transfer or exchange of Capital
Securities shall be the valid obligations of the Issuer Trust, evidencing the
same obligations, and entitled to the same benefits under this Trust Agreement,
as the Capital Securities surrendered upon such transfer or exchange.
26
Every Capital Securities Certificate presented or surrendered for
transfer or exchange shall (if so required by the Property Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Property Trustee and the Securities Registrar, duly executed
by the Holder thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Capital Securities Certificates, but the Property Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Capital Securities Certificates.
Neither the Issuer Trust nor the Property Trustee shall be required,
pursuant to the provisions of this Section: (i) to issue, register the transfer
of or exchange any Capital Securities Certificates during a period beginning at
the opening of 15 Business Days before the day of selection for redemption of
Capital Securities pursuant to Article IV and ending at the close of business on
the day of mailing of the notice of redemption, or (ii) to register the transfer
of or exchange any Capital Security so selected for redemption in whole or in
part, except, in the case of any such Capital Security to be redeemed in part,
any portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Notwithstanding any other
----------------------------------
provision of this Trust Agreement, transfers and exchanges of Capital Securities
and beneficial interests in a Global Capital Security shall be made only in
accordance with this Section 5.5(b).
(i) Non-Global Restricted Capital Security to Global Capital
---------------------------------------------------------
Security. If the Holder of a Restricted Capital Security (other than
--------
the Global Capital Security) wishes at any time to transfer all or any
portion of such Trust Security to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Global Capital
Security, such transfer may be effected only in accordance with the
provisions of this clause (b)(i) and subject to the Applicable
Procedures. Upon receipt by the Security Registrar of (A) such
Restricted Capital Security as provided in Section 5.5(a) and
instructions satisfactory to the Security Registrar directing that a
beneficial interest in the Global Capital Security in a specified
Liquidation Amount not greater than the Liquidation Amount of such
Restricted Capital Security to be credited to a specified Clearing
Agency Participant's account, and (B) a Restricted Securities
Certificate duly executed for transfer by such Holder or such Holder's
attorney duly authorized in writing, then the Security Registrar shall
cancel such Restricted Capital Security (and issue a new Restricted
Capital Security in respect of any untransferred portion thereof) as
provided in Section 5.5(a) and increase the aggregate Liquidation
Amount of the Global Capital Security by the specified Liquidation
Amount as provided in Section 5.4(c).
(ii) Non-Global Capital Security to Non-Global Capital
------------------------------------------------------
Security. A Trust Security that is not a Global Capital Security may
be transferred, in whole or in part, to a Person who takes delivery in
the form of another Trust Security that is not a Global Capital
Security as provided in Section 5.5(a), provided that if the Trust
27
Security to be transferred in whole or in part is a Restricted Capital
Security, the Securities Registrar shall have received a Restricted
Securities Certificate duly executed by the transferor Holder or such
Holder's attorney duly authorized in writing and the Securities
Registrar shall only be required to register the transfer of such
Restricted Securities Certificate upon direction from the Depositor
that such transfer is permissible.
(iii) Exchanges Between Global Capital Security and
--------------------------------------------------
Non-Global Trust Security. A beneficial interest in the Global Capital
-------------------------
Security may be exchanged for a Trust Security that is not a Global
Capital Security only as provided in Section 5.4.
(iv) Certain Initial Transfers of Non-Global Trust
--------------------------------------------------
Securities. In the case of Trust Securities initially issued other
-----------
than in global form, an initial transfer or exchange of such Trust
Securities that does not involve any change in beneficial ownership
may be made to an institutional accredited investor or investors as if
such transfer or exchange were not an initial transfer or exchange;
provided that written certification shall be provided by the
transferee and transferor of such Trust Securities to the Securities
Registrar that such transfer or exchange does not involve a change in
beneficial ownership.
(v) Limitations Relating to Principal Amount.
--------------------------------------------
Notwithstanding any other provision of this Trust Agreement and unless
otherwise specified as permitted by this Trust Agreement, Trust
Securities or portions thereof may be transferred or exchanged only in
principal amounts of not less than $50,000. Any transfer, exchange or
other disposition of Trust Securities in contravention of this Section
5.5(b)(v) shall be deemed to be void and of no legal effect
whatsoever, any such transferee shall be deemed not to be the Holder
or owner of any beneficial interest in such Trust Securities for any
purpose, including but not limited to the receipt of interest payable
on such Trust Securities, such transferee shall be deemed to have no
interest whatsoever in such Trust Securities, and the Securities
Registrar shall not record any such transfer in the Securities
Register.
(c) Restricted Securities Legend. Except as set forth below, all
-----------------------------
Capital Securities shall bear a Restricted Capital Securities Legend:
(i) subject to the following Clauses of this Section 5.5(c),
a Capital Security or any portion thereof that is exchanged, upon
transfer or otherwise, for a Global Capital Security or any portion
thereof shall bear the Restricted Capital Securities Legend while
represented thereby;
(ii) subject to the following Clauses of this Section 5.5(c),
a new Capital Security which is not a Global Capital Security and is
issued in exchange for another Capital Security (including a Global
Capital Security) or any portion thereof, upon transfer or otherwise,
shall, if such new Capital Security is required to be issued in the
28
form of a Restricted Capital Security, bear a Restricted Capital
Securities Legend;
(iii) a new Capital Security (other than a Global Capital
Security) that does not bear a Restricted Capital Securities Legend
may be issued in exchange for or in lieu of a Restricted Capital
Security or any portion thereof that bears such a legend if, in the
Depositor's judgment, placing such a legend upon such new Capital
Security is not necessary to ensure compliance with the requirements
of the Securities Act and is permissible under Commission Rule 144(k),
and the Property Trustee, at the written direction of the
Administrator of the Issuer Trust in the form of an Officers'
Certificate, shall authenticate and deliver such new Capital Security
as provided in this Article V;
(iv) notwithstanding the foregoing provisions of this Section
5.5(c), a Successor Capital Security of a Capital Security that does
not bear a Restricted Capital Securities Legend shall not bear such
form of legend, unless the Depositor has reasonable cause to believe
that such Successor Capital Security is a "restricted security" within
the meaning of Rule 144 under the Securities Act, in which case the
Property Trustee, at the written direction of any Administrator of the
Issuer Trust in the form of an Officers' Certificate, shall
authenticate and deliver a new Capital Security bearing a Restricted
Capital Securities Legend in exchange for such Successor Capital
Security as provided in this Article V; and
(v) Junior Subordinated Debentures distributed to a holder of
Capital Securities upon dissolution of the Issuer Trust shall bear a
Restricted Capital Securities Legend, if the Capital Securities so
held bear a similar legend, absent instructions from the Depositor
that such legend can be removed consistent with the requirements of
the Securities Act, and Commission Rule 144 thereunder.
SECTION 5.6. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrators such security, indemnity and/or other assurance
as may be required by them, in their discretion, to save each of them harmless,
then in the absence of notice that such Trust Securities Certificate shall have
been acquired by a bona fide purchaser, the Administrators, or any one of them,
on behalf of the Issuer Trust shall execute and make available for delivery, and
the Property Trustee shall authenticate, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection
with the issuance of any new Trust Securities Certificate under this Section,
the Administrators or the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section 5.6 shall constitute conclusive evidence of an
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undivided beneficial interest in the assets of the Issuer Trust corresponding to
that evidenced by the lost, stolen or destroyed Trust Securities Certificate, as
if originally issued, whether or not the lost, stolen or destroyed Trust
Securities Certificate shall be found at any time.
SECTION 5.7. PERSONS DEEMED HOLDERS.
The Issuer Trustees and the Securities Registrar shall treat the
Person in whose name any Trust Securities are issued as the sole owner of such
Trust Securities for the purpose of receiving Distributions and for all other
purposes whatsoever, and none of the Issuer Trustees, the Administrators or the
Securities Registrar shall be bound by any notice to the contrary.
SECTION 5.8. ACCESS TO LIST OF HOLDERS' NAMES AND ADDRESSES.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor, the Property Trustee, or the Administrators accountable by reason
of the disclosure of its name and address, regardless of the source from which
such information was derived.
SECTION 5.9. MAINTENANCE OF OFFICE OR AGENCY.
The Property Trustee shall designate, with the consent of the
Administrators, which consent shall not be unreasonably withheld, an office or
offices or agency or agencies where Capital Securities Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Property Trustee initially designates its
Corporate Trust Office as its corporate trust office for such purposes. The
Property Trustee shall give prompt written notice to the Depositor, the
Administrators and to the Holders of any change in the location of the
Securities Register or any such office or agency.
SECTION 5.10. APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Holders from the Payment
Account and shall report the amounts of such Distributions to the Property
Trustee and the Administrators. Any Paying Agent shall have the revocable power
to withdraw funds from the Payment Account solely for the purpose of making the
Distributions referred to above. The Property Trustee may revoke such power and
remove any Paying Agent in its sole discretion. The Paying Agent shall
initially be the Property Trustee. Any Person acting as Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Administrators and the Property Trustee. In the event that the Property Trustee
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Property Trustee shall appoint a successor
(which shall be a bank or trust company) that is reasonably acceptable to the
Administrators to act as Paying Agent. Such successor Paying Agent or any
additional Paying Agent appointed by the Administrators shall execute and
deliver to the Issuer Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Issuer Trustees that as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Holders in trust for the benefit
of the Holders entitled thereto until such sums shall be paid to such Holders.
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The Paying Agent shall return all unclaimed funds to the Property Trustee and
upon removal of a Paying Agent such Paying Agent shall also return all funds in
its possession to the Property Trustee. The provisions of Sections 8.1, 8.3 and
8.6 herein shall apply to the Bank also in its role as Paying Agent, for so long
as the Bank shall act as Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Trust Agreement
to the Paying Agent shall include any co-paying agent chosen by the Property
Trustee, unless the context requires otherwise.
SECTION 5.11. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
At Closing, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. Neither the Depositor nor any
successor Holder of the Common Securities may transfer less than all the Common
Securities, and the Depositor or any such successor Holder may transfer the
Common Securities only (i) in connection with a consolidation or merger of the
Depositor into another Person or any conveyance, transfer or lease by the
Depositor of its properties and assets substantially as an entirety to any
Person, pursuant to Section 8.1 of the Indenture, or (ii) to an Affiliate of the
Depositor in compliance with applicable law (including the Securities Act and
applicable state securities and blue sky laws); provided that any such transfer
shall be subject to the condition that the transferor shall have obtained (A)
either a ruling from the Internal Revenue Service or an unqualified written
Opinion of Counsel by a firm experienced in such matters addressed to the Issuer
Trust and delivered to the Issuer Trustees to the effect that such transfer will
not (1) cause the Issuer Trust to be treated as issuing a class of interests in
the Issuer Trust differing from the class of interests represented by the Common
Securities originally issued to the Depositor, (2) result in the Issuer Trust
acquiring or disposing of, or being deemed to have acquired or disposed of, an
asset, or (3) result in or cause the Issuer Trust to be treated as anything
other than a grantor trust for United States Federal income tax purposes and (B)
an unqualified written Opinion of Counsel by a firm experienced in such matters
addressed to the Issuer Trust and delivered to the Issuer Trustees to the effect
that such transfer will not cause the Issuer Trust to be an "investment company"
or controlled by an "investment company" that is required to be registered under
the Investment Company Act. To the fullest extent permitted by law, any
attempted transfer of the Common Securities, other than as set forth in the
immediately preceding sentence, shall be void. The Administrators shall cause
each Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH
APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."
SECTION 5.12. NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, with respect to Capital Securities
represented by Global Capital Securities Certificates, the Administrators and
the Issuer Trustees shall give all such notices and communications specified
herein to be given to the Clearing Agency, and shall have no obligations to give
such notice or other communication to the Owners.
SECTION 5.13. RIGHTS OF HOLDERS.
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(a) The legal title to the Trust Property is vested exclusively in
the Property Trustee (in its capacity as such) in accordance with Section 2.9,
and the Holders shall not have any right or title therein other than the
undivided beneficial ownership interest in the assets of the Issuer Trust
conferred by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Issuer Trust, except
as described below. The Trust Securities shall be personal property giving only
the rights specifically set forth therein and in this Trust Agreement. The
Trust Securities shall have no preemptive or similar rights, and when issued and
delivered to Holders against payment of the purchase price therefor, as provided
herein, will be fully paid and nonassessable by the Issuer Trust. Except as
otherwise provided in Section 4.8, the Holders of the Trust Securities, in their
capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Laws of the State of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if,
upon a Debenture Event of Default, the Indenture Trustee fails or the holders of
not less than 25% in principal amount of the outstanding Junior Subordinated
Debentures fail to declare the principal of all of the Junior Subordinated
Debentures to be immediately due and payable, the Holders of at least 25% in
Liquidation Amount of the Capital Securities then Outstanding shall have such
right to make such declaration by a notice in writing to the Property Trustee,
the Depositor and the Indenture Trustee.
At any time after such a declaration of acceleration with respect to
the Junior Subordinated Debentures has been made and before a judgment or decree
for payment of the money due has been obtained by the Indenture Trustee as
provided in the Indenture, the Holders of a Majority in Liquidation Amount of
the Capital Securities, by written notice to the Property Trustee, the Depositor
and the Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the Indenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all of the
Junior Subordinated Debentures,
(B) any accrued Additional Interest on all of the Junior
Subordinated Debentures,
(C) the principal of (and premium, if any, on) any
Junior Subordinated Debentures which have become due otherwise than by
such declaration of acceleration and interest and any Additional
Interest thereon at the rate borne by the Junior Subordinated
Debentures, and
(D) all sums paid or advanced by the Indenture Trustee
under the Indenture and the reasonable compensation, expenses,
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disbursements and advances of the Indenture Trustee and the Property
Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Junior
Subordinated Debentures, other than the non-payment of the principal of the
Junior Subordinated Debentures which has become due solely by such
acceleration, have been cured or waived as provided in Section 5.13 of the
Indenture.
If the Property Trustee fails to annul any such declaration and waive
such default, the Holders of at least a Majority in Liquidation Amount of the
Capital Securities shall also have the right to rescind and annul such
declaration and its consequences by written notice to the Depositor, the
Property Trustee and the Indenture Trustee, subject to the satisfaction of the
conditions set forth in clauses (i) and (ii) of this Section 5.13(b).
The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Capital Securities,
waive any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Indenture Trustee) or a default in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debenture. No such rescission shall affect any subsequent default
or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of the Capital
Securities, all or part of which is represented by the Global Capital Securities
Certificate, a record date shall be established for determining Holders of
Outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Property Trustee receives
such notice. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided that, unless such
declaration of acceleration, or rescission and annulment, as the case may be,
shall have become effective by virtue of the requisite percentage having joined
in such notice prior to the day which is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or
a proxy of a Holder, from giving, after expiration of such 90-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which event
a new record date shall be established pursuant to the provisions of this
Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to
the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 5.1(1) or 5.1(2) of the Indenture, any Holder of Capital Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Section 5.8 of the Indenture, for enforcement of payment to such
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Holder of the principal amount of or interest on Junior Subordinated Debentures
having an aggregate principal amount equal to the aggregate Liquidation Amount
of the Capital Securities of such Holder (a "Direct Action"). Except as set
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forth in Sections 5.13(b) and 5.13(c), the Holders of Capital Securities shall
have no right to exercise directly any right or remedy available to the holders
of, or in respect of, the Junior Subordinated Debentures.
ARTICLE VI
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. LIMITATIONS ON HOLDERS' VOTING RIGHTS.
(a) Except as provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer Trust or the obligations
of the parties hereto, nor shall anything herein set forth or contained in the
terms of the Trust Securities Certificates be construed so as to constitute the
Holders from time to time as members of an association.
(b) So long as any Junior Subordinated Debentures are held by the
Property Trustee on behalf of the Issuer Trust, the Property Trustee shall not
(i) direct the time, method and place of conducting any proceeding for any
remedy available to the Indenture Trustee, or execute any trust or power
conferred on the Property Trustee with respect to such Junior Subordinated
Debentures, (ii) waive any past default that may be waived under Section 5.13 of
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Junior Subordinated Debentures shall be due and payable
or (iv) consent to any amendment, modification or termination of the Indenture
or the Junior Subordinated Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at least a
Majority in Liquidation Amount of the Capital Securities, provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debentures affected thereby, no such consent shall
be given by the Property Trustee without the prior written consent of each
Holder of Capital Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of Capital
Securities, except by a subsequent vote of the Holders of Capital Securities.
The Property Trustee shall notify all Holders of the Capital Securities of any
notice of default received with respect to the Junior Subordinated Debentures.
In addition to obtaining the foregoing approvals of the Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Property Trustee
shall, at the expense of the Depositor, obtain an Opinion of Counsel experienced
in such matters to the effect that such action will not cause the Issuer Trust
to be taxable other than as a grantor trust for United States Federal income tax
purposes.
(c) If any proposed amendment to the Trust Agreement provides for,
or the Issuer Trust otherwise proposes to effect, (i) any action that would
adversely affect in any material respect the interests, powers, preferences or
special rights of the Capital Securities, whether by way of amendment to the
Trust Agreement or otherwise, or (ii) the dissolution, winding-up or termination
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of the Issuer Trust, other than pursuant to the terms of this Trust Agreement,
then the Holders of Outstanding Trust Securities as a class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable other than as a grantor trust for United States Federal income tax
purposes.
SECTION 6.2. NOTICE OF MEETINGS.
Notice of all meetings of the Holders, stating the time, place and
purpose of the meeting, shall be given by the Property Trustee pursuant to
Section 10.8 to each Holder of record, at his registered address, at least 15
days and not more than 90 days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
SECTION 6.3. MEETINGS OF HOLDERS.
No annual meeting of Holders is required to be held. The Property
Trustee, however, shall call a meeting of Holders to vote on any matter upon the
written request of the Holders of record of 25% of the aggregate Liquidation
Amount of the Capital Securities and the Administrators or the Property Trustee
may, at any time in their discretion, call a meeting of Holders of Capital
Securities to vote on any matters as to which Holders are entitled to vote.
Holders of at least a Majority in Liquidation Amount of the Capital
Securities, present in person or represented by proxy, shall constitute a quorum
at any meeting of Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the
Holders of record present, in person or by proxy, holding Capital Securities
representing at least a Majority in Liquidation Amount of the Capital Securities
held by the Holders present, either in person or by proxy, at such meeting shall
constitute the action of the Holders of Capital Securities, unless this Trust
Agreement requires a greater number of affirmative votes.
SECTION 6.4. VOTING RIGHTS.
Holders shall be entitled to one vote for each $50,000.00 of
Liquidation Amount represented by their Outstanding Trust Securities in respect
of any matter as to which such Holders are entitled to vote.
SECTION 6.5. PROXIES, ETC.
At any meeting of Holders, any Holder entitled to vote at such meeting
may vote by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Property Trustee, or with such other
officer or agent of the Issuer Trust as the Property Trustee may direct, for
35
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Property Trustee, proxies may be solicited in the name of the
Property Trustee or one or more officers of the Property Trustee. Only Holders
of record shall be entitled to vote. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6. HOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Holders at a meeting may be taken
without a meeting and without prior notice if Holders holding at least a
Majority in Liquidation Amount of all Trust Securities entitled to vote in
respect of such action (or such larger proportion thereof as shall be required
by any other provision of this Trust Agreement) shall consent to the action in
writing.
SECTION 6.7. RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Holders who are entitled to notice
of and to vote at any meeting or by written consent, or to participate in any
distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrators or Property Trustee may from time to time fix a date,
not more than 90 days prior to the date of any meeting of Holders or the payment
of a distribution or other action, as the case may be, as a record date for the
determination of the identity of the Holders of record for such purposes.
SECTION 6.8. ACTS OF HOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to the Property Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as an "Act" of the Holders signing such instrument or instruments. Proof of
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execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Issuer Trustees, if made in the manner provided
in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
36
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Issuer Trustee or Administrator receiving the same
deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Issuer
Trustees, the Administrators or the Issuer Trust in reliance thereon, whether or
not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise among the Holders, the Administrators or
the Issuer Trustees with respect to the authenticity, validity or binding nature
of any request, demand, authorization, direction, consent, waiver or other Act
of such Holder or Issuer Trustee under this Article VI, then the determination
of such matter by the Property Trustee shall be conclusive with respect to such
matter.
SECTION 6.9. INSPECTION OF RECORDS.
Upon reasonable notice to the Administrators and the Property Trustee,
the records of the Issuer Trust shall be open to inspection by Holders during
normal business hours for any purpose reasonably related to such Holder's
interest as a Holder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE
AND THE DELAWARE TRUSTEE.
The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:
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(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the State of Delaware with the trust powers and authority to execute and
deliver, and to carry out and perform its obligations under the terms of this
Trust Agreement.
(b) The execution, delivery and performance by the Property
Trustee of this Trust Agreement have been duly authorized by all necessary
corporate action on the part of the Property Trustee; and this Trust Agreement
has been duly executed and delivered by the Property Trustee, and constitutes a
legal, valid and binding obligation of the Property Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, receivership, conservatorship, 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 Trust
Agreement by the Property Trustee do not conflict with or constitute a breach of
the certificate of incorporation or by-laws of the Property Trustee.
(d) At Closing, the Property Trustee has not knowingly created any
Liens on the Trust Securities.
(e) No consent, approval or authorization of, or registration with
or notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of this Trust
Agreement.
(f) The Delaware Trustee is duly organized, validly existing and
in good standing under the laws of the State of Delaware, with the trust powers
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Trust Agreement.
(g) The execution, delivery and performance by the Delaware
Trustee of this Trust Agreement have been duly authorized by all necessary
corporate action on the part of the Delaware Trustee; and this Trust Agreement
has been duly executed and delivered by the Delaware Trustee, and constitutes a
legal, valid and binding obligation of the Delaware Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, receivership, conservatorship, moratorium, insolvency, and other
similar laws affecting creditors' right 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).
(h) The execution, delivery and performance of this Trust
Agreement by the Delaware Trustee do not conflict with or constitute a breach of
the certificate of incorporation or by-laws of the Delaware Trustee.
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(i) No consent, approval or authorization of, or registration with
or notice to any state or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of this Trust
Agreement.
(j) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
SECTION 7.2. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) The Trust Securities Certificates issued at Closing on behalf
of the Issuer Trust have been duly authorized and will have been duly and
validly executed, and, subject to payment therefor, issued and delivered by the
Issuer Trustees pursuant to the terms and provisions of, and in accordance with
the requirements of, this Trust Agreement, and the Holders will be, as of each
such date, entitled to the benefits of this Trust Agreement; and
(b) There are no taxes, fees or other governmental charges payable
by the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under
the laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by either the Property
Trustee or the Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE ISSUER TRUSTEES; THE ADMINISTRATORS
SECTION 8.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Issuer Trustees and the
Administrators shall be as provided by this Trust Agreement and, in the case of
the Property Trustee, by the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Trust Agreement shall require the Issuer
Trustees or the Administrators to expend or risk their own funds or otherwise
incur any financial liability in the performance of any of their duties
hereunder, or in the exercise of any of their rights or powers, if they shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not herein expressly so provided, every provision of this Trust
Agreement relating to the conduct or affecting the liability of or affording
protection to the Issuer Trustees or the Administrators shall be subject to the
provisions of this Section. Nothing in this Trust Agreement shall be construed
to release an Administrator or an Issuer Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct. To the extent that, at law or in equity, an Issuer Trustee or
Administrator has duties and liabilities relating to the Issuer Trust or to the
Holders, such Issuer Trustee or Administrator shall not be liable to the Issuer
Trust or to any Holder for such Issuer Trustee's or Administrator's good faith
reliance on the provisions of this Trust Agreement. The provisions of this
Trust Agreement, to the extent that they restrict the duties and liabilities of
39
the Issuer Trustees and Administrators otherwise existing at law or in equity,
are agreed by the Depositor and the Holders to replace such other duties and
liabilities of the Issuer Trustees and Administrators.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that neither the Issuer Trustees nor
the Administrators are personally liable to it for any amount distributable in
respect of any Trust Security or for any other liability in respect of any Trust
Security. This Section 8.1(b) does not limit the liability of the Issuer
Trustees expressly set forth elsewhere in this Trust Agreement or, in the case
of the Property Trustee, in the Trust Indenture Act.
(c) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.10), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.13 of the Indenture), the Property Trustee shall enforce this Trust
Agreement for the benefit of the Holders and shall exercise such of the rights
and powers vested in it by this Trust Agreement, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Trust Agreement 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 any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this Trust
Agreement (including pursuant to Section 10.10), and the Property
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Trust Agreement
(including pursuant to Section 10.10); 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 Trust
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Property Trustee, the Property Trustee
40
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Trust Agreement;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of at least a Majority in
Liquidation Amount of the Capital 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 Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Junior Subordinated
Debentures and the Payment 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 Trust Agreement and the Trust
Indenture Act;
(v) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Payment Account
maintained by the Property Trustee pursuant to Section 3.1 and except to
the extent otherwise required by law;
(vi) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of any other Issuer
Trustee, the Administrators or the Depositor; and
(vii) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if the Property Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Trust
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) The Administrators shall not be responsible for monitoring the
compliance by the Issuer Trustees or the Depositor with their respective duties
under this Trust Agreement, nor shall any Administrator be liable for the
default or misconduct of any other Administrator, the Issuer Trustees or the
Depositor.
SECTION 8.2. CERTAIN NOTICES.
41
(a) Within five Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Property Trustee, the
Property Trustee shall transmit, in the manner and to the extent provided in
Section 10.8, notice of such Event of Default to the Holders and the
Administrators, unless such Event of Default shall have been cured or waived.
(b) Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Subordinated Debentures pursuant to the Indenture, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8, notice of
such exercise to the Holders and the Administrators, unless such exercise shall
have been revoked.
SECTION 8.3. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting in good faith upon any resolution,
Opinion of Counsel, certificate, written representation of a Holder or
transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any direction or act of the Depositor contemplated by this
Trust Agreement shall be sufficiently evidenced by an Officers' Certificate;
(c) 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
re-recording, refiling or re-registration thereof;
(d) the Property Trustee may consult with counsel of its own
choosing (which counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees) and the advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken suffered or omitted by it hereunder in good faith and in reliance thereon
and in accordance with such advice; the Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(e) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction; provided that
nothing contained in this Section 8.3(e) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its obligation to
exercise the rights and powers vested in it by this Trust Agreement;
42
(f) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless requested in writing to do so by one or more Holders, but
the Property Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;
(g) the Property Trustee may execute any of the trusts or powers
hereunder or perform any of its duties hereunder either directly or by or
through its agents or attorneys, provided that the Property Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(h) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be fully protected in
acting in accordance with such instructions; and
(i) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on any Issuer Trustee or Administrator 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 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 any Issuer Trustee or
Administrator shall be construed to be a duty.
SECTION 8.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Issuer Trust, and neither the Issuer
Trustees nor the Administrators assume any responsibility for their correctness.
The Issuer Trustees and the Administrators shall not be accountable for the use
or application by the Depositor of the proceeds of the Junior Subordinated
Debentures.
SECTION 8.5. MAY HOLD SECURITIES.
The Depositor, the Administrators, any Issuer Trustee or any other
agent of any Issuer Trustee or the Issuer Trust, in its individual or any other
43
capacity, may become the owner or pledgee of Trust Securities and, subject to
Sections 5.5(c), 8.8 and 8.13 and except as provided in the definition of the
term "Outstanding" in Article I, may otherwise deal with the Issuer Trust with
the same rights it would have if it were not the Depositor, an Administrator,
Issuer Trustee or such other agent.
SECTION 8.6. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Issuer Trustees from time to time reasonable
compensation for all services rendered by them hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) to reimburse the Issuer Trustees upon request for all
reasonable expenses, disbursements and advances incurred or made by the Issuer
Trustees in accordance with any provision of this Trust Agreement (including the
reasonable compensation, expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
negligence or willful misconduct; and
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Issuer Trustee, (ii) each Administrator,
(iii) any Affiliate of any Issuer Trustee, (iv) any officer, director,
shareholder, employee, representative or agent of any Issuer Trustee, and (v)
any employee or agent of the Issuer Trust, (referred to herein as an
"Indemnified Person") from and against any loss, damage, liability, tax,
-------------------
penalty, expense or claim of any kind or nature whatsoever incurred by such
Indemnified Person arising out of or in connection with the creation, operation
or dissolution of the Issuer Trust or any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Issuer Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Trust Agreement, except
that no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement and the resignation or removal of the Indemnified Persons.
The obligation of the Depositor under this Section 8.6 to compensate,
reimburse and indemnify the Issuer Trustees shall be secured by a Lien upon all
Trust Property (except funds held in trust for the benefit of Holders of
particular Trust Securities), but only to the extent of the interest of the
Holder of the Common Securities therein.
The Depositor, any Administrator and any Issuer Trustee may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Issuer Trust, and the Issuer Trust and the Holders of Trust Securities shall
have no rights by virtue of this Trust Agreement in and to such independent
ventures or the income or profits derived therefrom, and the pursuit of any such
venture, even if competitive with the business of the Issuer Trust, shall not be
44
deemed wrongful or improper. Neither the Depositor, any Administrator, nor any
Issuer Trustee shall be obligated to present any particular investment or other
opportunity to the Issuer Trust even if such opportunity is of a character that,
if presented to the Issuer Trust, could be taken by the Issuer Trust, and the
Depositor, any Administrator or any Issuer 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 Issuer
Trustee may engage or be interested in any financial or other transaction with
the Depositor or any Affiliate of the Depositor, or may act as depository for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Depositor or its Affiliates.
SECTION 8.7. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF
TRUSTEES AND ADMINISTRATORS.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such and has a combined capital and surplus of at least
$50,000,000.00 If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VIII. At the time of appointment, the Property Trustee must have
securities rated in one of the three highest rating categories by a nationally
recognized statistical rating organization.
(b) There shall at all times be one or more Administrators
hereunder. Each Administrator 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 persons
authorized to bind that entity. An employee, officer or Affiliate of the
Depositor may serve as an Administrator.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age and
a resident of the State of Delaware or (ii) a legal entity with its principal
place of business in the State of Delaware and that otherwise meets the
requirements of applicable Delaware law that shall act through one or more
persons authorized to bind such entity.
SECTION 8.8. CONFLICTING INTERESTS.
(a) If the Property Trustee has or shall acquire a conflicting
interest within the meaning of the Trust Indenture Act, the Property Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.
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(b) The Guarantee and the Indenture shall be deemed to be
sufficiently described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. CO-TRUSTEES AND SEPARATE TRUSTEE.
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 Property Trustee shall have power to
appoint, and upon the written request of the Property Trustee, the Depositor and
the Administrators shall for such purpose join with the Property Trustee in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law 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 the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. Any co-trustee or
separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed by one or more
Administrators, and the Trust Securities shall be authenticated and delivered by
the Property Trustee and all rights, powers, duties, and obligations hereunder
in respect of the custody of securities, cash and other personal property held
by, or required to be deposited or pledged with, the Property Trustee specified
hereunder, shall be exercised, solely by the Property Trustee and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate trustee,
except to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Property Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
46
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigned or removed may be appointed in the manner provided in this Section 8.9.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee or
any other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Issuer Trustee (the "Relevant
--------
Trustee") and no appointment of a successor trustee pursuant to this Article
- -------
shall become effective until the acceptance of appointment by the successor
trustee in accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, a Relevant Trustee may
resign at any time by giving written notice thereof to the Holders. The Holder
of the Common Securities shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements its expenses and charges to
serve as the successor trustee on a form provided by the Administrators, and
selecting the Person who agrees to the lowest expenses and charges. If the
instrument of acceptance by the successor trustee required by Section 8.11 shall
not have been delivered to the Relevant Trustee within 60 days after the giving
of such notice of resignation, the Relevant Trustee may petition, at the expense
of the Issuer Trust, any court of the State of Delaware for the appointment of a
successor Relevant Trustee.
The Property Trustee or the Delaware Trustee may be removed at any
time (i) for cause (including upon the occurrence of an Event of Default
described in subparagraph (5) of the definition thereof with respect to the
Relevant Trustee) by the Holder of the Common Securities, or (ii) if a Debenture
Event of Default shall have occurred and be continuing at any time, by Act of
the Holders of at least a Majority in Liquidation Amount of the Capital
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Issuer Trust).
If a Relevant Trustee shall be removed or become incapable of acting
as Issuer Trustee, or if any vacancy shall occur in the office of any Issuer
Trustee for any cause, the Holder of the Common Securities shall promptly
47
appoint a successor Relevant Trustee or Trustees, and such successor Issuer
Trustee shall comply with the applicable requirements of Section 8.11, provided,
however, if a Debenture Event of Default shall have occurred and be continuing
at such time, the Holders of the Capital Securities, by Act of the Holders of
record of not less than 25% in aggregate Liquidation Amount of the Capital
Securities than Outstanding delivered to such Relevant Trustee, shall appoint
such successor trustee. If no successor trustee shall have been so appointed by
the Holder of the Common Securities or the Holders of the Capital Securities, as
applicable, or shall not have accepted appointment in the manner required by
Section 8.11 hereof, any Holder, on behalf of himself and all others similarly
situated, or any other Issuer Trustee, may petition any court in the State of
Delaware for the appointment of a successor trustee.
The Property Trustee shall give notice of each resignation and each
removal of a Relevant Trustee and each appointment of a successor trustee to all
Holders in the manner provided in Section 10.8 and shall give notice to the
Depositor and to the Administrators. Each notice shall include the name of the
Relevant Trustee and the address of its Corporate Trust Office if it is the
Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Delaware Trustee who is a natural person dies or
becomes, in the opinion of the Holder of the Common Securities, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by the Property Trustee following the procedures regarding expenses
and charges set forth above (with the successor in each case being a Person who
satisfies the eligibility requirements for the Delaware Trustee, as the case may
be, set forth in Section 8.7).
SECTION 8.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each such successor Relevant Trustee (if
requested by the Depositor) with respect to the Trust Securities shall execute,
acknowledge and deliver an amendment hereto wherein each successor Relevant
Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Issuer Trust, and (b) shall add to or change any of the provisions of this
Trust Agreement as shall be necessary to provide for or facilitate the
administration of the Issuer Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Relevant Trustee a co-trustee, and upon the execution and delivery of such
amendment, the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Issuer Trust or any successor Relevant Trustee such retiring
Relevant Trustee shall duly assign, transfer and deliver to such successor
Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and the
Issuer Trust.
48
Upon request of any such successor Relevant Trustee, the Issuer Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article VIII.
SECTION 8.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.
Any Person into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Relevant
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article VIII, without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
SECTION 8.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
ISSUER TRUST.
If and when the Property Trustee shall be or become a creditor of the
Depositor (or any other obligor upon the Trust Securities), the Property Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Depositor (or any such other obligor) only if
this Trust Agreement is subject to the Trust Indenture Act.
SECTION 8.14. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor, the
Property Trustee (irrespective of whether any Distributions on the Trust
Securities shall then be due and payable and irrespective of whether the
Property Trustee shall have made any demand on the Issuer Trust for the payment
of any past due Distributions) shall be entitled and empowered, to the fullest
extent permitted by law, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
49
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Property Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel, and
any other amounts due the Property Trustee.
Nothing contained herein shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or compensation affecting
the Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.15. REPORTS BY PROPERTY TRUSTEE.
(a) Not later than January 31 of each year commencing with January
31, 2002, the Property Trustee shall transmit to all Holders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of the immediately
preceding December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect; and
(ii) any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action taken
by the Property Trustee in the performance of its duties hereunder which it
has not previously reported and which in its opinion materially affects the
Trust Securities.
(b) In addition the Property Trustee shall transmit to Holders
such reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with the Depositor.
SECTION 8.16. REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrators on behalf of the Issuer Trust
shall provide to the Property Trustee such documents, reports and information as
required or specified by Section 314 of the Trust Indenture Act (if any and to
the extent applicable) and the compliance certificate required or specified by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at the
times set forth in Section 314 of the Trust Indenture Act. The Depositor and
the Administrators shall annually file with the Property Trustee a certificate
specifying whether such Person is in compliance with all the terms and covenants
applicable to such Person hereunder.
SECTION 8.17. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
50
Each of the Depositor and the Administrators on behalf of the Issuer
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.18. NUMBER OF ISSUER TRUSTEES.
(a) The number of Issuer Trustees shall be two; provided,
however, the Property Trustee and the Delaware Trustee may be the same Person,
in which case, the number of Issuer Trustees may be one.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to dissolve, terminate or annul the Issuer Trust or terminate this Trust
Agreement.
SECTION 8.19. DELEGATION OF POWER.
(a) Any Administrator may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a) or making any governmental filing; and
(b) The Administrators shall have power to delegate from time to
time to such of their number the doing of such things and the execution of such
instruments either in the name of the Issuer Trust or the names of the
Administrators or otherwise as the Administrators may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to the
provisions of this Trust Agreement.
SECTION 8.20. APPOINTMENT OF ADMINISTRATORS.
(a) The Administrators shall be appointed by the Holder of the
Common Securities and may be removed by the Holder of the Common Securities or
may resign at any time. Upon any resignation or removal, the Holder of the
Common Securities shall appoint a successor Administrator. Each Administrator
shall execute this Trust Agreement thereby agreeing to comply with, and be
legally bound by, all of the terms, conditions and provisions of this Trust
Agreement. If at any time there is no Administrator, the Property Trustee or
any Holder who has been a Holder of Trust Securities for at least six months may
petition any court of competent jurisdiction for the appointment of one or more
Administrators.
51
(b) Whenever a vacancy in the number of Administrators shall
occur, until such vacancy is filled by the appointment of an Administrator in
accordance with this Section 8.20, the Administrators in office, regardless of
their number (and notwithstanding any other provision of this Agreement), shall
have all the powers granted to the Administrators and shall discharge all the
duties imposed upon the Administrators by this Trust Agreement.
(c) Notwithstanding the foregoing, or any other provision of this
Trust Agreement, in the event any Administrator who is a natural person dies or
becomes, in the opinion of the Holder of the Common Securities, incompetent, or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by the Holder of the Common Securities (with the successor being a
Person who satisfies the eligibility requirement for Administrators, as the case
may be, set forth in Section 8.7).
Except as otherwise provided in this Trust Agreement, or by applicable
law, any one Administrator may execute any document or otherwise take any action
which the Administrators are authorized to take under this Trust Agreement.
ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 9.1. DISSOLUTION UPON EXPIRATION DATE.
Unless earlier dissolved, the Issuer Trust shall automatically
dissolve on January 1, 2033 (the "Expiration Date"), and thereafter the Trust
---------------
Property shall be distributed in accordance with Section 9.4.
SECTION 9.2. EARLY DISSOLUTION.
The first to occur of any of the following events is an "Early
-----
Termination Event," upon the occurrence of which the Issuer Trust shall
- ------------------
dissolve:
(a) the occurrence of the appointment of a receiver or other
similar official in any liquidation, insolvency or similar proceeding with
respect to the Depositor or all or substantially all of its property, or entry
by a court or other governmental agency of a decree or order and such decree or
order shall remain unstayed and undischarged for a period of 60 days, unless the
Depositor shall transfer the Common Securities as provided by Section 5.11, in
which case this provision shall refer instead to any such successor Holder of
the Common Securities;
(b) the written direction to the Property Trustee from the Holder
of the Common Securities at any time to dissolve the Issuer Trust and, after
paying or making reasonable provision to pay all charges and obligations of the
Issuer Trust in accordance with Section 3808(e) of the Delaware Business Trust
Act, to distribute the Junior Subordinated Debentures to Holders in exchange for
the Trust Securities (which direction, subject to Section 9.4(a), is optional
and wholly within the discretion of the Holder of the Common Securities);
52
(c) the repayment of all of the Capital Securities in connection
with the repayment at maturity or redemption of all the Junior Subordinated
Debentures; and
(d) the entry of an order for dissolution of the Issuer Trust by a
court of competent jurisdiction.
SECTION 9.3. TERMINATION.
As soon as is practicable after the occurrence of an event referred to
in Section 9.1 or 9.2, and upon the completion of the winding-up and liquidation
of the Issuer Trust, the Administrators and the Issuer Trustees (each of whom is
hereby authorized to take such action) shall file a certificate of cancellation
with the Secretary of State of the State of Delaware terminating the Issuer
Trust and, upon such filing, the respective obligations and responsibilities of
the Issuer Trustees, the Administrators and the Issuer Trust created and
continued hereby shall terminate.
SECTION 9.4. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or
(d) of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be
wound-up and liquidated by the Property Trustee as expeditiously as the Property
Trustee determines to be possible by distributing, after paying or making
reasonable provision to pay all claims and obligations of the Issuer Trust in
accordance with Section 3808(e) of the Delaware Business Trust Act, to each
Holder a Like Amount of Junior Subordinated Debentures, subject to Section
9.4(d). Notice of liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 15 nor more than 45
days prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that, from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Junior Subordinated Debentures; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for Junior
Subordinated Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as the Administrators or the Property Trustee shall deem
appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Issuer Trust and distribution of the Junior
Subordinated Debentures to Holders, the Property Trustee shall establish a
record date for such distribution (which shall be not more than 30 days prior to
the Liquidation Date) and, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish such procedures as it
53
shall deem appropriate to effect the distribution of Junior Subordinated
Debentures in exchange for the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) the Clearing Agency for the Capital Securities or its nominee,
as the registered Holder of the Global Capital Securities Certificates, shall
receive a registered global certificate or certificates representing the Junior
Subordinated Debentures to be delivered upon such distribution with respect to
Capital Securities held by the Clearing Agency or its nominee, and (iii) any
Trust Securities Certificates not held by the Clearing Agency for the Capital
Securities or its nominee as specified in clause (ii) above will be deemed to
represent Junior Subordinated Debentures having a principal amount equal to the
stated Liquidation Amount of the Trust Securities represented thereby and
bearing accrued and unpaid interest in an amount equal to the accumulated and
unpaid Distributions on such Trust Securities until such certificates are
presented to the Securities Registrar for transfer or reissuance.
(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Junior Subordinated Debentures is
not practical, or if any Early Termination Event specified in clause (c) of
Section 9.2 occurs, the Issuer Trust shall be dissolved, and the Trust Property
shall be liquidated, by the Property Trustee in such manner as the Property
Trustee determines. In such event, on the date of the dissolution of the Issuer
Trust, Holders will be entitled to receive out of the assets of the Issuer Trust
available for distribution to Holders, after paying or making reasonable
provision to pay all claims and obligations of the Issuer Trust in accordance
with Section 3808(e) of the Delaware Business Trust Act, an amount equal to the
aggregate of Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
-----------
Distribution"). If, upon any such dissolution, the Liquidation Distribution can
- ------------
be paid only in part because the Issuer Trust has insufficient assets available
to pay in full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Issuer Trust on the Trust
Securities shall be paid on a pro rata basis (based upon Liquidation Amounts).
The Holder of the Common Securities will be entitled to receive Liquidation
Distributions upon any such dissolution, pro rata (determined as aforesaid) with
Holders of Capital Securities, except that, if a Debenture Event of Default in
Sections 5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the
Capital Securities shall have a priority over the Common Securities as provided
in Section 4.3.
SECTION 9.5. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS
OF THE ISSUER TRUST.
The Issuer Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any entity, except pursuant to this Section 9.5
or Section 9.4. At the request of the Holder of the Common Securities, and with
the consent of the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, but without the consent of the Issuer Trustees, the Issuer
Trust may merge with or into, consolidate, amalgamate, or be replaced by or
54
convey, transfer or lease its properties and assets substantially as an entirety
to a trust organized as such under the laws of any state; provided that (i) such
successor entity either (a) expressly assumes all of the obligations of the
Issuer Trust with respect to the Capital Securities or (b) substitutes for the
Capital Securities other securities having substantially the same terms as the
Capital Securities (the "Successor Capital Securities") so long as the Successor
----------------------------
Capital Securities have the same priority as the Capital Securities with respect
to distributions and payments upon liquidation, redemption and otherwise, (ii) a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee is appointed to hold the Junior Subordinated Debentures, (iii)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Capital Securities (including any Successor Capital
Securities) to be downgraded by any nationally recognized statistical rating
organization, if such Capital Securities have been rated by such nationally
recognized statistical rating organization, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Capital
Securities (including any Successor Capital Securities) in any material respect,
(v) such successor entity has a purpose substantially identical to that of the
Issuer Trust, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Issuer Trust has received an
Opinion of Counsel from a firm experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights preferences and privileges of the
holders of the Capital Securities (including any Successor Capital Securities)
in any material respect, and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Issuer
Trust nor such successor entity will be required to register as an "investment
company" under the Investment Company Act and (vii) the Depositor or any
permitted transferee to whom it has transferred the Common Securities hereunder
owns all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Capital Securities or Successor
Capital Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Issuer Trust shall not, except with the
consent of Holders of 100% in Liquidation Amount of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to, any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer Trust or the successor
entity to be taxable other than as a grantor trust for United States Federal
income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. LIMITATION OF RIGHTS OF HOLDERS.
Except as set forth in Section 9.2, the bankruptcy, dissolution,
termination, death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal or personal representatives or heirs of such
Person or any Holder for such Person, to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding-up of the
55
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them. Any merger or similar
agreement shall be executed by the Administrators on behalf of the Issuer Trust.
SECTION 10.2. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Holder of the Common Securities, without the consent of any Holder of the
Capital Securities (i) to cure any ambiguity, correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Trust Agreement, provided, however, such amendment shall not adversely
affect in any material respect the interests of any Holder or (ii) to modify,
eliminate or add to any provisions of this Trust Agreement to such extent as
shall be necessary to ensure that the Issuer Trust will not be taxable other
than as a grantor trust for United States Federal income tax purposes at any
time that any Trust Securities are Outstanding or to ensure that the Issuer
Trust will not be required to register as an investment company under the
Investment Company Act.
(b) Except as provided in Section 10.2(c) hereof, any provision of
this Trust Agreement may be amended by the Holder of the Common Securities with
(i) the consent of Holders of at least a Majority in Liquidation Amount of the
Capital Securities and (ii) receipt by the Issuer Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Issuer Trust's being taxable as a grantor trust for United States Federal income
tax purposes or the Issuer Trust's exemption from status of an "investment
company" under the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder, this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a Holder to institute suit for the
enforcement of any such payment on or after such date.
(d) Notwithstanding any other provisions of this Trust Agreement,
no Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement which would cause the Issuer Trust to fail or cease to qualify for the
exemption from status as an "investment company" under the Investment Company
Act or be taxable other than as a grantor trust for United States Federal
income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor and the Administrators, this
Trust Agreement may not be amended in a manner which imposes any additional
obligation on the Depositor or the Administrators.
(f) In the event that any amendment to this Trust Agreement is
made, the Administrators or the Property Trustee shall promptly provide to the
Depositor a copy of such amendment.
56
(g) No amendment to this Trust Agreement may be adopted that
adversely affects the Property Trustee's or the Delaware Trustee's rights,
duties or immunities under this Trust Agreement, except with the consent of such
Property Trustee or Delaware Trustee. The Property Trustee shall be entitled to
receive an Opinion of Counsel and an Officers' Certificate stating that any
amendment to this Trust Agreement is in compliance with this Trust Agreement.
(h) Any amendments to this Trust Agreement made pursuant to
Section 10.2(a) shall become effective when notice of such amendment is given to
the Holders of the Trust Securities.
SECTION 10.3. SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.4. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE ISSUER TRUSTEES AND THE
ADMINISTRATORS SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH
LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE
LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER,
THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS, THE ISSUER TRUST, THE
DEPOSITOR, THE ISSUER TRUSTEES, THE ADMINISTRATORS OR THIS TRUST AGREEMENT ANY
PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING
TO TRUSTS OTHER THAN THE DELAWARE BUSINESS TRUST ACT THAT RELATE TO OR
REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY
COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE
FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES,
OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT
OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR
DISPOSITION OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO
TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF
RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR
LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST
INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF
HOLDING OR INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER
STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES
57
THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND
POWERS OF THE ISSUER TRUSTEES OR THE ADMINISTRATOR AS SET FORTH OR REFERENCED IN
THIS TRUST AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT
APPLY TO THE ISSUER TRUST.
SECTION 10.5. PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case, with the same
force and effect as though made on the date fixed for such payment, and no
Distributions or interest shall accumulate on such unpaid amount for the period
after such date.
SECTION 10.6. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust, the Administrators
and any Issuer Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article VIII of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
SECTION 10.7. HEADINGS.
The Article and Section headings are for convenience only and shall
not affect the construction of this Trust Agreement.
SECTION 10.8. REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing by
deposit thereof, first class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Holder of Capital Securities, to such Holder as such Holder's name and address
may appear on the Securities Register; and (b) in the case of the Holder of
Common Securities or the Depositor, to Peoples Bancorp of North Carolina, Inc.,
518 West C Street, Newton, North Carolina 28658, Attention: Tony W. Wolfe,
facsimile no.: (828) 465-6780 or to such other address as may be specified in a
written notice by the Depositor to the Property Trustee. Such notice, demand or
other communication to or upon a Holder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission. Such notice, demand or other communication to or upon the
Depositor shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Depositor.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
58
the Issuer Trust, the Property Trustee, the Delaware Trustee, the
Administrators, or the Issuer Trust shall be given in writing addressed (until
another address is published by the Issuer Trust) as follows: (a) with respect
to the Property Trustee to Wilmington Trust Company, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration; (b)
with respect to the Delaware Trustee to 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration; and (c) with
respect to the Administrators, to them at the address above for notices to the
Depositor, marked "Attention: PEBK Capital Trust I Administrators." Such
notice, demand or other communication to or upon the Issuer Trust or the
Property Trustee shall be deemed to have been sufficiently given or made only
upon actual receipt of the writing by the Issuer Trust, the Property Trustee, or
such Administrator.
SECTION 10.9. AGREEMENT NOT TO PETITION.
Each of the Issuer Trustees, the Administrators and the Depositor
agree for the benefit of the Holders that, until at least one year and one day
after the Issuer Trust has been terminated in accordance with Article IX, they
shall not file, or join in the filing of, a petition against the Issuer Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
----------------
proceeding against the Issuer Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this Section 10.9, the Property Trustee
agrees, for the benefit of Holders, that at the expense of the Depositor, it
shall file an answer with the bankruptcy court or other court or otherwise
properly contest the filing of such petition by the Depositor against the Issuer
Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Issuer Trustee or the Issuer Trust may assert. If any Issuer Trustee or
Administrator takes action in violation of this Section 10.9, the Depositor
agrees, for the benefit of the Holders, that at the expense of the Depositor, it
shall file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by such Person against the Depositor or the commencement
of such action and raise the defense that such Person has agreed in writing not
to take such action and should be estopped and precluded therefrom and such
other defenses, if any, as counsel for the Issuer Trustee or the Issuer Trust
may assert. The provisions of this Section 10.9 shall survive the termination
of this Trust Agreement.
SECTION 10.10. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE
ACT.
(a) Trust Indenture Act; Application. (i) This Trust Agreement is
subject to the provisions of the Trust Indenture Act that are required to be a
part of this Trust Agreement and shall, to the extent applicable, be governed by
such provisions; (ii) if and to the extent that any provision of this Trust
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control; (iii) for purposes of this Trust Agreement, the Property Trustee, to
the extent permitted by applicable law and/or the rules and regulations of the
Commission, shall be the only Issuer Trustee which is a trustee for the purposes
of the Trust Indenture Act; and (iv) the application of the Trust Indenture Act
to this Trust Agreement shall not affect the nature of the Capital Securities
59
and the Common Securities as equity securities representing undivided beneficial
interests in the assets of the Issuer Trust.
(b) Lists of Holders of Capital Securities. (i) Each of the
Depositor and the Administrators on behalf of the Trust shall provide the
Property Trustee with such information as is required under Section 312(a) of
the Trust Indenture Act at the times and in the manner provided in Section
312(a) and (ii) the Property Trustee shall comply with its obligations under
Sections 310(b), 311 and 312(b) of the Trust Indenture Act.
(c) Reports by the Property Trustee. Within 60 days after January
31 of each year commencing January 31, 2002, the Property Trustee shall provide
to the Holders of the Trust Securities such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form, in the manner and at the
times provided by Section 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
(d) Periodic Reports to Property Trustee. Each of the Depositor
and the Administrators on behalf of the Issuer Trust shall provide to the
Property Trustee, the Commission and the Holders of the Trust Securities, as
applicable, such documents, reports and information as may be required by
Section 315(a)(1) - (3) (if any) of the Trust Indenture Act and the compliance
certificates required by Section 314(a)(4) and (c) of the Trust Indenture Act
(provided that any certificate to be provided pursuant to Section 314(a)(4) of
the Trust Indenture Act shall be provided within 120 days of the end of each
fiscal year of the Issuer Trust).
(e) Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrators on behalf of the Issuer Trust shall provide to
the Property Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Trust Agreement which relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given pursuant to Section 314(c) shall comply with
Section 314(e) of the Trust Indenture Act.
(f) Disclosure Information. The disclosure of information as to
the names and addresses of the Holders of Trust Securities in accordance with
Section 312 of the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any existing
law or any law hereafter enacted which does not specifically refer to Section
312 of the Trust Indenture Act, nor shall the Property Trustee be held
accountable by reason of mailing any material pursuant to a request made under
Section 312(b) of the Trust Indenture Act.
SECTION 10.11. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
60
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE THE
INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE
GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE ISSUER
TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER TRUST
AND SUCH HOLDER AND SUCH OTHERS.
* * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed, all as of the day and year first above written.
PEOPLES BANCORP OF NORTH CAROLINA, INC.,
as Depositor
By: /s/ Tony W. Wolfe
-------------------------------------------
Name: Tony W. Wolfe
Title: President and Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Property Trustee, and not in its individual capacity
By: /s/ Anita Dallago
-------------------------------------------
Name: Anita Dallago
Title: Financial Services Officer
WILMINGTON TRUST COMPANY,
as Delaware Trustee, and not in its individual capacity
By: /s/ Anita Dallago
-------------------------------------------
Name: Anita Dallago
Title: Financial Services Officer
By: /s/ Tony W. Wolfe
-------------------------------------------
Name: Tony W. Wolfe
Title: Administrator
By: /s/ Joseph F. Beaman, Jr.
-------------------------------------------
Name: Joseph F. Beaman
Title: Administrator
By: /s/ A. Joseph Lampron
-------------------------------------------
Name: A. Joseph Lampron
Title: Administrator
62
EXHIBIT A
CERTIFICATE OF TRUST
OF
PEBK CAPITAL TRUST I
EXHIBIT B
RESTRICTED SECURITIES CERTIFICATE
(FOR TRANSFERS PURSUANT TO SEC. 5.5(B)
OF THE TRUST AGREEMENT)
Wilmington Trust Company,
as Security Registrar
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Re: Floating Rate Capital Securities ("Capital Securities")
-------
of PEBK Capital Trust I (the "Trust")
-----
Reference is made to the Amended and Restated Trust Agreement, dated
as of December ___, 2001 (the "Trust Agreement"), among Peoples Bancorp of North
---------------
Carolina, Inc., as Depositor, Wilmington Trust Company, as Property Trustee and
as Delaware Trustee, the Administrators named therein, and the Holders (as
defined therein) from time to time. Terms used herein and defined in the Trust
Agreement or in Regulation D, Rule 144A or Rule 144 under the U.S. Securities
Act of 1933 (the "Securities Act") are used herein as so defined.
---------------
This certificate relates to $__________ aggregate Liquidation Amount
of Capital Securities, which are evidenced by the following certificate(s) (the
"Specified Securities"):
---------------------
CUSIP No(s). _________________________
CERTIFICATE No(s). ___________________
CURRENTLY IN BOOK-ENTRY FORM: ___Yes ____No (check one)
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
-----------
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so.
Such beneficial owner or owners are referred to herein collectively as the
"Owner." If the Specified Securities are represented by a Global Capital
Securities Certificate, they are held through the Clearing Agency or a Clearing
Agency Participant in the name of the Undersigned, as or on behalf of the Owner.
If the Specified Securities are not represented by a Global Capital Securities
Certificate, they are registered in the name of the Undersigned, as or on behalf
of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
----------
Restricted Capital Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 144A, Rule 904 or Rule 144 under the Securities Act or
other exemption from registration under the Securities Act, and all applicable
securities laws of the states of the United States and other jurisdictions.
Accordingly, the Owner hereby further certifies as follows:
1. RULE 144A TRANSFERS. If the transfer is being effected in accordance
with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring for
its own account or for the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the transfer.
2. RULE 904 TRANSFERS. If the transfer is being effected in accordance
with Rule 904:
(A) the Owner is not a distributor of the Capital Securities, an
affiliate of the Depositor or the Trust or any such distributor or a person
acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a person
in the United States;
(C) either:
(i) at the time the buy order was originated, the Transferee was
outside the United States or the Owner and any person acting
on its behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another
designated offshore securities market and neither the Owner
nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts within the meaning of Rule 902 of
Regulation S have been made in the United States by or on behalf of the Owner or
any affiliate thereof; and
2
(E) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
3. RULE 144 TRANSFERS. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144 or such shorter
time as may be provided therein) has elapsed since the date the Specified
Securities were acquired from the Depositor or the Trust or from an affiliate
(as such term is defined in Rule 144) of the Depositor or the Trust, with the
full amount of the purchase price paid at the date of purchase, whichever is
later, and is being effected in accordance with the applicable amount, manner of
sale and notice requirements of paragraphs (c), (e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a holding period of at least
two years (or such shorter time as may be provided in Rule 144(k) has elapsed
since the date the Specified Securities were acquired from the Depositor or the
Trust or from an affiliate (as such term is defined in Rule 144) of the
Depositor or the Trust, with the full amount of the purchase price paid at the
date of purchase, whichever is later, and the Owner is not, and during the
preceding three months has not been, an affiliate of the Depositor or the Trust.
4. OTHER TRANSFERS. If the Owner seeks to make a transfer in reliance
on any other exemption under the Securities Act, it shall attach hereto a letter
stating the exemption relied upon and the facts under which such exemption is
available for the requested transfer, and shall attach an opinion of counsel
satisfactory to the Depositor stating that such exemption is available and is
being properly used.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Depositor, the Trust and the Holders.
Dated:________________ __________________________________________________
(Print the name of the Undersigned, as such term
is defined in the second paragraph of this
certificate.)
By: ______________________________________________
Name: ____________________________________________
Title: ___________________________________________
(If the Undersigned is a corporation, partnership,
fiduciary or entity, the correct name of the
entity, and the name and title of the person
signing on behalf of the Undersigned must be
stated.)
3
EXHIBIT C
FORM OF COMMON SECURITIES CERTIFICATE
EXHIBIT D
FORM OF CAPITAL SECURITIES CERTIFICATE
EXHIBIT E
FORM OF PLACEMENT AGREEMENT
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GUARANTEE AGREEMENT
BETWEEN
PEOPLES BANCORP OF NORTH CAROLINA, INC.
AS GUARANTOR,
AND
WILMINGTON TRUST COMPANY
AS GUARANTEE TRUSTEE,
DATED AS OF DECEMBER 19, 2001
PEBK CAPITAL TRUST I
CERTAIN SECTIONS OF THIS GUARANTEE AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE
TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE GUARANTEE AGREEMENT
ACT SECTION SECTION
- --------------- ---------------------
Section 310 (a) (1) . . . . . . . . . . . . . . . . . . . . . . 4.1 (a)
(a) (2) . . . . . . . . . . . . . . . . . . . . . . 4.1 (a)
(a) (3) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a) (4) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.8, 4.1 (c)
Section 311 (a) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 312 (a) . . . . . . . . . . . . . . . . . . . . . . . . 2.2 (a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.2 (b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 313 (a) . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(a) (4) . . . . . . . . . . . . . . . . . . . . . . 2.3
(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . 2.3
(d) . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Section 314 (a) . . . . . . . . . . . . . . . . . . . . . . . . 2.4
(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.4
(c) (1) . . . . . . . . . . . . . . . . . . . . . . 2.5
(c) (2) . . . . . . . . . . . . . . . . . . . . . . 2.5
(c) (3) . . . . . . . . . . . . . . . . . . . . . . 2.5
(e) . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.5, 3.2
Section 315 (a) . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (d)
(b) . . . . . . . . . . . . . . . . . . . . . . . . 2.7
(c) . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (c)
(d) . . . . . . . . . . . . . . . . . . . . . . . . 3.1 (d)
(e) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 316 (a) . . . . . . . . . . . . . . . . . . . . . . . . 1.1, 2.6, 5.4
(a) (1) (A) . . . . . . . . . . . . . . . . . . . . 5.4
(a) (1) (B) . . . . . . . . . . . . . . . . . . . . 5.4
(a) (2) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 5.3
(c) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 317 (a) (1) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a) (2) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
Section 318 (a) . . . . . . . . . . . . . . . . . . . . . . . . 2.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Guarantee Agreement.
(i)
TABLE OF CONTENTS
-----------------
ARTICLE I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. TRUST INDENTURE ACT. . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1. Trust Indenture Act; Application . . . . . . . . . . . . . . 4
SECTION 2.2. List of Holders. . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3. Reports by the Guarantee Trustee . . . . . . . . . . . . . . 5
SECTION 2.4. Periodic Reports to the Guarantee Trustee. . . . . . . . . . 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent . . . . . . 5
SECTION 2.6. Events of Default; Waiver. . . . . . . . . . . . . . . . . . 6
SECTION 2.7. Event of Default; Notice . . . . . . . . . . . . . . . . . . 6
SECTION 2.8. Conflicting Interests. . . . . . . . . . . . . . . . . . . . 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.1. Powers and Duties of the Guarantee Trustee . . . . . . . . . 6
SECTION 3.2. Certain Rights of Guarantee Trustee. . . . . . . . . . . . . 8
SECTION 3.3. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV. GUARANTEE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1. Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . 10
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE V. GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.2. Waiver of Notice and Demand. . . . . . . . . . . . . . . . . 11
SECTION 5.3. Obligations Not Affected . . . . . . . . . . . . . . . . . . 11
SECTION 5.4. Rights of Holders. . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.6. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.7. Independent Obligations. . . . . . . . . . . . . . . . . . . 13
ARTICLE VI. COVENANTS AND SUBORDINATION. . . . . . . . . . . . . . . . . 13
SECTION 6.1. Subordination. . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 6.2. Pari Passu Guarantees. . . . . . . . . . . . . . . . . . . . 13
ARTICLE VII. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 7.1. Termination. . . . . . . . . . . . . . . . . . . . . . . . . 14
(ii)
ARTICLE VIII. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 8.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . 14
SECTION 8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 8.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 8.4. Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.5. Interpretation . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.6. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 17
(iii)
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT, dated as of December 19, 2001, is executed
and delivered by PEOPLES BANCORP OF NORTH CAROLINA, INC., a North Carolina
corporation (the "Guarantor"), having its principal office at 518 West C Street,
---------
Newton, North Carolina 28658, and WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
------------------
Holders (as defined herein) from time to time of the Capital Securities (as
defined herein) of PEBK CAPITAL TRUST I, a Delaware statutory business trust
(the "Issuer Trust").
-------------
Pursuant to an Amended and Restated Trust Agreement (the "Trust
-----
Agreement"), dated of even date herewith, among Peoples Bancorp of North
- ---------
Carolina, Inc., as Depositor, Wilmington Trust Company, as Property Trustee (the
"Property Trustee"), Wilmington Trust Company, as Delaware Trustee (the
-----------------
"Delaware Trustee", and together with the Property Trustee, collectively, the
-----------------
"Issuer Trustees"), the Administrators named therein and the Holders from time
----------------
to time of undivided beneficial interests in the assets of the Issuer Trust, the
Issuer Trust is issuing up to $14,000,000 aggregate Liquidation Amount (as
defined herein) of its Floating Rate Capital Securities (the "Capital
-------
Securities"), representing preferred undivided beneficial interests in the
- ----------
assets of the Issuer Trust and having the terms set forth in the Trust
Agreement;
The Capital Securities will be issued by the Issuer Trust and the
proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (the "Common Securities"), representing common
------------------
undivided beneficial interests in the assets of the Issuer Trust of the
Guarantor, will be used to purchase the Junior Subordinated Debentures due
December 31, 2031 (the "Junior Subordinated Debentures") of the Guarantor which
------------------------------
will be deposited with Wilmington Trust Company, as Property Trustee under the
Trust Agreement, as trust assets; and
As an inducement to the Holders to purchase the Capital Securities,
the Guarantor is willing to irrevocably and unconditionally agree, to the extent
set forth herein, to pay to the Holders of the Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase of the Capital
Securities by each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor, intending to be legally bound
hereby, executes and delivers this Guarantee Agreement for the benefit of the
Holders from time to time of the Capital Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall
have the following meanings. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Trust Agreement.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement, or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.
"Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time, (ii) the Redemption Price, with respect to the
Capital Securities called for redemption by the Issuer Trust to the extent that
the Issuer Trust shall have funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary dissolution, termination, winding-up or
liquidation of the Issuer Trust, unless the Junior Subordinated Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the Liquidation
Amount of all outstanding Trust Securities and all accumulated and unpaid
Distributions to the date of payment to the extent the Issuer Trust shall have
funds on hand available to make such payment at such time and (b) the amount of
assets of the Issuer Trust remaining available for distribution to Holders on
liquidation of the Issuer Trust (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first paragraph of
this Guarantee Agreement.
"Holder" means any holder, as registered on the books and records of
the Issuer Trust, of any Capital Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Capital
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
-2-
"Indenture" means the Junior Subordinated Indenture, dated of even
date herewith, between Peoples Bancorp of North Carolina, Inc. and Wilmington
Trust Company, as trustee, as it may be modified, amended or supplemented from
time to time.
"Issuer Trust" shall have the meaning specified in the first paragraph
of this Guarantee Agreement.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Capital Securities based upon the relative
Liquidation Amounts of such classes and (b) with respect to a distribution of
Junior Subordinated Debentures to Holders of Trust Securities in connection with
a dissolution or liquidation of the Issuer Trust, Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Trust
Securities of the Holder to whom such Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $50,000.00 per Capital
Security and $1,000.00 per Common Security.
"Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount of all then outstanding
Capital Securities issued by the Issuer Trust.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, Vice Chairman of the Board, Chief Executive Officer, President,
Executive Vice President or a Senior Vice President or Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Guarantor, and delivered to the Guarantee Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement by each officer signing the Officers' Certificate
that such officer has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by such officer in rendering the Officers'
Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
-3-
"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.
"Redemption Date" means, with respect to any Capital Security to be
redeemed, the date fixed for such redemption by or pursuant to the Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Junior Subordinated Debentures shall be a Redemption Date for a Like
Amount of Capital Securities, including, but not limited to any date of
redemption pursuant to the occurrence of any Special Event.
"Redemption Price" shall have the meaning specified in the Trust
Agreement.
"Responsible Officer" means, when used with respect to the Guarantee
Trustee, any officer assigned to the Corporate Trust Office, including any
managing director, vice president, principal, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of this Guarantee Agreement, and also, with respect to a
particular matter, any other officer of the Guarantee Trustee to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Senior Indebtedness" shall have the meaning specified in the
Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Article IV
hereof.
"Trust Agreement" has the meaning specified in the recitals hereto.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sec.Sec. 77aaa-77bbbb), as amended.
"Trust Securities" means the Common Securities and the Capital
Securities.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Guarantee Agreement, the provision of the Trust
Indenture Act shall control. If any provision of this Guarantee Agreement
modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Guarantee Agreement as so modified or excluded, as the case may be.
-4-
SECTION 2.2. List of Holders.
(a) The Guarantor will furnish or cause to be furnished to the
Guarantee Trustee a list of Holders at the following times:
(i) quarterly, not more than 15 days after the last day of
February, May, August and November, in each year, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders as of the last day of February, May, August and November, as applicable;
and
(ii) at such other times as the Guarantee Trustee may request in
writing, within 30 days after the receipt by the Guarantor of any such request,
a list of similar form and content as of a date not more than 15 days prior to
the time such list is furnished.
(b) The Guarantee Trustee shall comply with the requirements of
Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than January 31 of each year, commencing January 31, 2002, the
Guarantee Trustee shall provide to the Holders such reports, if any, as are
required by Section 313 of the Trust Indenture Act in the form and in the manner
provided by Section 313 of the Trust Indenture Act. If this Guarantee Agreement
shall have been qualified under the Trust Indenture Act, the Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee and the Holders such
documents, reports and information, if any, as required by Section 314 of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act, in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act, provided that such documents, reports
and information shall be required to be provided to the Securities and Exchange
Commission only if this Guarantee Agreement shall have been qualified under the
Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
-5-
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Capital Securities
may, by vote, on behalf of the Holders, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notice of all Events of Default known to the Guarantee Trustee, unless
such Events of Default have been cured or waived before the giving of such
notice; provided that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee Trustee shall be protected in withholding such
notice if and so long as the Board of Directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer charged with the administration of
this Guarantee Agreement shall have received written notice of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
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(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the cure or waiver of all Events of Default that may have
occurred, shall be obligated to perform only such duties as are specifically set
forth in this Guarantee Agreement (including pursuant to Section 2.1), and no
implied covenants shall be read into this Guarantee Agreement against the
Guarantee Trustee. If an Event of Default has occurred (that has not been cured
or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee 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 any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee Agreement
(including pursuant to Section 2.1), and the Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement (including pursuant to
Section 2.1); and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee 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 Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) The Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) The Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in Liquidation Amount
of the Capital Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and
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(iv) No provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers if the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds or liability is not
assured to it under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee 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 reasonably believed by it to be genuine and to have been signed, sent
or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers' Certificate
unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action hereunder,
the Guarantee 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 from the Guarantee
Trustee, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
advice or written opinion of such legal counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by it hereunder in good faith and in
accordance with such advice or opinion. Such legal counsel may be legal counsel
to the Guarantor or any of its Affiliates and may be one of its employees. The
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any court of
competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided to
the Guarantee Trustee such security and indemnity as would satisfy a reasonable
person in the position of the Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses) and liabilities that might be incurred
by it in complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee.
(vi) The Guarantee 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
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document, but the Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, and the Guarantee Trustee shall not be responsible for any
negligence or willful misconduct on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with respect
to enforcing any remedy or right or taking any other action hereunder, the
Guarantee Trustee (A) may request instructions from the Holders, (B) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received and (C) shall be fully protected in acting in
accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee 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 Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee (which for purposes
of this Section 3.3 shall include its officers, directors, employees and agents)
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or administration
of this Guarantee Agreement, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a result
of any amount due to it under this Guarantee Agreement. The provisions of this
Section 3.3 shall survive the termination of this Guarantee Agreement or the
resignation or removal of the Guarantee Trustee.
SECTION 3.4. Expenses.
The Guarantor shall from time to time reimburse the Guarantee Trustee for
its expenses and costs (including reasonable attorneys' or agents' fees)
incurred in connection with the performance of its duties hereunder.
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ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least $50,000,000,
and shall be a corporation meeting the requirements of Section 310(a) of the
Trust Indenture Act. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority, then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, 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 Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee.
(a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the Successor Guarantee
Trustee by written instrument executed by the Successor Guarantee Trustee and
delivered to the Holders and the Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a Guarantee
Trustee may resign at any time by giving written notice thereof to the Holders.
The Guarantee Trustee shall appoint a successor by requesting from at least
three Persons meeting the eligibility requirements such Persons' expenses and
charges to serve as the Guarantee Trustee, and selecting the Person who agrees
to the lowest expenses and charges. If the instrument of acceptance by the
Successor Guarantee Trustee shall not have been delivered to the Guarantee
Trustee within 30 days after the giving of such notice of resignation, the
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.
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(c) The Guarantee Trustee may be removed for cause at any time by
Act (within the meaning of Section 6.8 of the Trust Agreement) of the Holders of
at least a Majority in Liquidation Amount of the Capital Securities, delivered
to the Guarantee Trustee.
(d) If a resigning Guarantee Trustee shall fail to appoint a
successor, or if a Guarantee Trustee shall be removed or become incapable of
acting as Guarantee Trustee, or if any vacancy shall occur in the office of any
Guarantee Trustee for any cause, the Holders of the Capital Securities, by Act
of the Holders of record of not less than 25% in aggregate Liquidation Amount of
the Capital Securities then outstanding delivered to such Guarantee Trustee,
shall promptly appoint a successor Guarantee Trustee. If no Successor Guarantee
Trustee shall have been so appointed by the Holders of the Capital Securities
and such appointment accepted by the Successor Guarantee Trustee, any Holder, on
behalf of himself and all others similarly situated, may petition any court of
competent jurisdiction for the appointment of a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer Trust), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer Trust may have or
assert, except the defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders. The Guarantor shall give prompt written notice to the Guarantee
Trustee in the event it makes any direct payment hereunder.
SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
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(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Securities to be
performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust of
all or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from an election by the Depositor to defer
any interest payment on the Junior Subordinated Debentures as so provided in the
Indenture), Redemption Price, Liquidation Distribution or any other sums payable
under the terms of the Capital Securities or the extension of time for the
performance of any other obligation under, arising out of, or in connection
with, the Capital Securities;
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Capital Securities,
or any action on the part of the Issuer Trust granting indulgence or extension
of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, conservatorship, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings affecting,
the Issuer Trust or any of the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the Capital
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor (other than
payment of the underlying obligation), it being the intent of this Section 5.3
that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
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instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer Trust) or upon the distribution of Junior Subordinated
Debentures to Holders as provided in the Trust Agreement.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all rights (if any) of the
Holders against the Issuer Trust in respect of any amounts paid to the Holders
by the Guarantor under this Guarantee Agreement; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, if at the time of any
such payment, any amounts are due and unpaid under this Guarantee Agreement. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank subordinate and junior in right of payment to all
Senior Indebtedness (as defined in the Indenture) of the Guarantor to the same
extent and in the same manner set forth in the Indenture with respect to the
Junior Subordinated Debentures, and the provisions of Article XIII of the
Indenture will apply, mutatis mutandis, to the obligations of the Guarantor
hereunder. The obligations of the Guarantor hereunder do not constitute Senior
Indebtedness of the Guarantor.
SECTION 6.2. Pari Passu Guarantees.
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The obligations of the Guarantor under this Guarantee Agreement shall
rank pari passu with any similar guarantee agreements issued by the Guarantor on
behalf of the holders of Trust Securities issued by the Issuer Trust and with
any other security, guarantee or other obligation that is expressly stated to
rank pari passu with the obligations of the Guarantor under this Guarantee
Agreement.
ARTICLE VII. TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force
and effect upon (i) full payment of the Redemption Price of all Outstanding
Capital Securities, (ii) the distribution of Junior Subordinated Debentures to
the Holders in exchange for all of the Outstanding Capital Securities or (iii)
full payment of the amounts payable in accordance with Article IX of the Trust
Agreement upon liquidation of the Issuer Trust. Notwithstanding the foregoing,
this Guarantee Agreement will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder is required to restore payment of any
sums paid under the Capital Securities or this Guarantee Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, conservators, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder, and any purported assignment that is not
in accordance with these provisions shall be void.
SECTION 8.2. Amendments.
Except with respect to any changes that do not materially adversely
affect the rights of the Holders (in which case no consent of the Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
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notice, and delivered, telecopied (confirmed by delivery of the original) or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number
set forth below or such other address or telecopy number or to the attention of
such other Person as the Guarantor may give notice to the Holders:
Peoples Bancorp of North Carolina, Inc.
518 West C Street
Newton, North Carolina 28658
Facsimile No.: (828) 465-6780
Attention: Tony W. Wolfe
(b) if given to the Issuer Trust, in care of the Guarantee
Trustee, at the Issuer Trust's (and the Guarantee Trustee's) address set forth
below or such other address or telecopy number or to the attention of such other
Person as the Guarantee Trustee on behalf of the Issuer Trust may give notice to
the Holders:
PEBK Capital Trust I
518 West C Street
Newton, North Carolina 28658
Facsimile No.: (828) 465-6780
Attention: Tony W. Wolfe
with a copy to:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Facsimile No.: (302) 636-4140
Attention: Corporate Trust Administration
(c) if given to the Guarantee Trustee:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890-0001
Facsimile No.: (302) 636-4140
Attention: Corporate Trust Administration
(d) if given to any Holder of record, at the address set forth on
the books and records of the Issuer Trust.
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All notices hereunder 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 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
SECTION 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the
same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
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SECTION 8.7. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
[SIGNATURES ON NEXT PAGE]
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THIS GUARANTEE AGREEMENT is executed as of the day and year first above written.
PEOPLES BANCORP OF NORTH CAROLINA, INC., as Guarantor
By: /s/ Tony W. Wolfe
-----------------------------------------
Name: Tony W. Wolfe
Title: President and Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Guarantee Trustee, and not in its individual capacity
By: /s/ Anita Dallago
-----------------------------------------
Name: Anita Dallago
-----------------------------------------
Title: Financial Services Officer
-----------------------------------------
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