Recitals
Exhibit
10.1
Replacement
Capital Covenant,
dated as
of September 27, 2006 (this “Replacement
Capital Covenant”),
by
Nelnet, Inc., a Delaware corporation (together with its successors and assigns,
the “Corporation”),
in
favor of and for the benefit of each Covered Debtholder (as defined
below).
Recitals
A. On
the
date hereof, the Corporation is issuing $200,000,000 aggregate principal amount
of its 7.400% Fixed-to-Floating Capital Efficient Notes (the “CENts”).
B. This
Replacement Capital Covenant is the “Replacement
Capital Covenant”
referred
to in the Prospectus Supplement, dated September 22, 2006, relating to the
CENts
(together with the Prospectus, dated May 12, 2005 attached thereto, the
“Prospectus
Supplement”).
C. The
Corporation is entering into and disclosing the content of this Replacement
Capital Covenant in the manner provided below with the intent that the covenants
provided for in this Replacement Capital Covenant be enforceable by each Covered
Debtholder and that the Corporation be estopped from disregarding the covenants
in this Replacement Capital Covenant, in each case to the fullest extent
permitted by applicable law.
D. The
Corporation acknowledges that reliance by each Covered Debtholder upon the
covenants in this Replacement Capital Covenant is reasonable and foreseeable
by
the Corporation and that, were the Corporation to disregard its covenants in
this Replacement Capital Covenant, each Covered Debtholder would have sustained
an injury as a result of its reliance on such covenants.
NOW,
THEREFORE,
the
Corporation hereby covenants and agrees as follows in favor of and for the
benefit of each Covered Debtholder.
SECTION
1. Definitions.
Capitalized terms used in this Replacement Capital Covenant (including the
Recitals) have the meanings set forth in Schedule I hereto.
SECTION
2. Limitations
on Redemption and Repurchase of CENts.
The
Corporation hereby promises and covenants to and for the benefit of each Covered
Debtholder that the Corporation shall not repay, redeem or repurchase all or
any
part of the CENts on or before September 15, 2051 except to the extent that
the
principal amount repaid or the applicable redemption or repurchase price does
not exceed the sum of the following amounts:
(i) the
Applicable Percentage of the aggregate amount of net cash proceeds received
by
the Corporation and its Subsidiaries since the most recent Measurement Date
from
the sale of Common Stock and rights to acquire Common Stock (including Common
Stock and rights to acquire Common Stock issued pursuant to the Corporation’s
reinvestment plan or employee benefit plans) to Persons other than the
Corporation and its Subsidiaries; plus
(ii) 100%
of
the aggregate amount of net cash proceeds received by the Corporation and its
Subsidiaries since the most recent Measurement Date from the sale of
Mandatorily
Convertible Preferred Stock and Debt Exchangeable for Equity to Persons other
than the Corporation and its Subsidiaries; plus
(iii) 100%
of
the aggregate amount of net cash proceeds received by the Corporation and its
Subsidiaries since the most recent Measurement Date from the sale of Qualifying
Capital Securities to Persons other than the Corporation and its Subsidiaries.
SECTION
3. Covered
Debt.
(a)
The
Corporation represents and warrants that the Initial Covered Debt is Eligible
Debt.
(b) On
or
during the 30-day period immediately preceding any Redesignation Date with
respect to the Covered Debt then in effect, the Corporation shall identify
the
series of Eligible Debt that will become the Covered Debt on and after such
Redesignation Date in accordance with the following procedures:
(i) the
Corporation shall identify each series of its then outstanding long-term
indebtedness for money borrowed that is Eligible Debt;
(ii) if
only
one series of the Corporation’s then outstanding long-term indebtedness for
money borrowed is Eligible Debt, such series shall become the Covered Debt
commencing on the related Redesignation Date;
(iii) if
the
Corporation has more than one outstanding series of long-term indebtedness
for
money borrowed that is Eligible Debt, then the Corporation shall identify the
series that has the latest occurring final maturity date as of the date the
Corporation is applying the procedures in this Section 3(b) and such series
shall become the Covered Debt on the next Redesignation Date;
(iv) the
series
of outstanding long-term indebtedness for money borrowed that is determined
to
be Covered Debt pursuant to clause (ii), (iii), (iv) or (v) above shall be
the
Covered Debt for purposes of this Replacement Capital Covenant for the period
commencing on the related Redesignation Date and continuing to but not including
the Redesignation Date as of which a new series of outstanding long-term
indebtedness is next determined to be the Covered Debt pursuant to the
procedures set forth in this Section 3(b); and
(v) in
connection with such identification of a new series of Covered Debt, the
Corporation shall give the notice provided for in Section 3(c) within the time
frame provided for in such section.
(c) Notice.
In order
to give effect to the intent of the Corporation described in Recital C, the
Corporation covenants that (i) simultaneously with the execution of this
Replacement Capital Covenant or as soon as practicable after the date hereof,
it
shall (A) give notice to the Holders of the Initial Covered Debt, in the manner
provided in the indenture relating to the Initial Covered Debt, of this
Replacement Capital Covenant and the rights granted to such Holders hereunder
and (B) file a copy of this Replacement Capital Covenant with the Commission
as
an Exhibit to a Form 8-K under the Securities Exchange Act; (ii) so long as
the
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Corporation
is a reporting company under the Securities Exchange Act, the Corporation will
include in each annual report filed with the Commission on Form 10-K under
the
Securities Exchange Act a description of the covenant set forth in Section
2 and
identify the series of long-term indebtedness for borrowed money that is Covered
Debt as of the date such Form 10-K is filed with the Commission; (iii) if a
series of the Corporation’s long-term indebtedness for money borrowed (1)
becomes Covered Debt or (2) ceases to be Covered Debt, give notice of such
occurrence within 30 days to the holders of such long-term indebtedness for
money borrowed in the manner provided for in the indenture, fiscal agency
agreement or other instrument under which such long-term indebtedness for money
borrowed was issued and report such change in the Corporation’s next quarterly
report on Form 10-Q or annual report on Form 10-K, as applicable; (iv) if,
and
only if, the Corporation ceases to be a reporting company under the Securities
Exchange Act, post on its website the information otherwise required to be
included in Securities Exchange Act filings pursuant to clauses (ii) and (iii)
of this Section 3(c); and (v) promptly upon request by any Holder of Covered
Debt, provide such Holder with an executed copy of this Replacement Capital
Covenant.
SECTION
4. Termination,
Amendment and Waiver.
(a)
The
obligations of the Corporation pursuant to this Replacement Capital Covenant
shall remain in full force and effect until the earliest date (the “Termination
Date”)
to
occur of (i) September 15, 2051, (ii) the date, if any, on which the Holders
of
a majority by principal amount of the then effective series of Covered Debt
consent or agree in writing to the termination of this Replacement Capital
Covenant and the obligations of the Corporation hereunder and (iii) the date
on
which the Corporation ceases to have any series of outstanding Eligible Senior
Debt or Eligible Subordinated Debt (in each case without giving effect to the
rating requirement in clause (ii) of the definition of each such term). From
and
after the Termination Date, the obligations of the Corporation pursuant to
this
Replacement Capital Covenant shall be of no further force and effect.
(b) This
Replacement Capital Covenant may be amended or supplemented from time to time
by
a written instrument signed by the Corporation with the consent of the Holders
of at least a majority by principal amount of the then effective series of
Covered Debt, provided
that this
Replacement Capital Covenant may be amended or supplemented from time to time
by
a written instrument signed only by the Corporation (and without the consent
of
the Holders of the then effective series of Covered Debt) if (i) the effect
of
such amendment or supplement is solely to impose additional restrictions on
the
ability of the Corporation to repay, redeem or repurchase CENts in any
circumstance or (ii) such amendment or supplement is not adverse to the holders
of the then effective series of Covered Debt and an officer of the Corporation
has delivered to the Holders of the then effective series of Covered Debt in
the
manner provided for in the indenture, fiscal agency agreement or other
instrument with respect to such Covered Debt a written certificate stating
that,
in his or her determination, such amendment or supplement is not adverse to
the
Holders of any series of Covered Debt.
(c) For
purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement
is
required to terminate, amend or supplement the obligations of the Corporation
under this Replacement Capital Covenant shall be the Holders of the then
effective Covered Debt as of a record date established by the Corporation that
is not more than 30 days prior to the date
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on
which
the Corporation proposes that such termination, amendment or supplement becomes
effective.
SECTION
5. Miscellaneous.
(a) This
Replacement Capital Covenant shall be governed by and construed in accordance
with the laws of the State of New York.
(b) This
Replacement Capital Covenant shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of the Covered Debtholders
as they exist from time to time (it being understood and agreed by the
Corporation that any Person who is a Covered Debtholder at the time such Person
acquires, holds or sells Covered Debt shall retain its status as a Covered
Debtholder for so long as the series of long-term indebtedness for borrowed
money owned by such Person is Covered Debt and, if such Person initiates a
claim
or proceeding to enforce its rights under this Replacement Capital Covenant
after the Corporation has violated its covenants in Section 2 and before the
series of long-term indebtedness for money borrowed held by such Person is
no
longer Covered Debt, such Person’s rights under this Replacement Capital
Covenant shall not terminate by reason of such series of long-term indebtedness
for money borrowed no longer being Covered Debt).
(c) All
demands, notices, requests and other communications to the Corporation under
this Replacement Capital Covenant shall be deemed to have been duly given and
made if in writing and (i) if served by personal delivery upon the Corporation,
on the day so delivered (or, if such day is not a Business Day, the next
succeeding Business Day), (ii) if delivered by registered post or certified
mail, return receipt requested, or sent to the Corporation by a national or
international courier service, on the date of receipt by the Corporation (or,
if
such date of receipt is not a Business Day, the next succeeding Business Day),
or (iii) if sent by telecopier, on the day telecopied, or if not a Business
Day,
the next succeeding Business Day, provided that the telecopy is promptly
confirmed by telephone confirmation thereof, and in each case to the Corporation
at the address set forth below, or at such other address as the Corporation
may
thereafter notify to Covered Debtholders or post on its website as the address
for notices under this Replacement Capital Covenant:
|
Nelnet,
Inc.
000
Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxx, Chief Financial
Officer
|
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IN
WITNESS WHEREOF,
the
Corporation has caused this Replacement Capital Covenant to be executed by
its
duly authorized officer, as of the day and year first above
written.
|
Nelnet,
Inc.
By:
|
|
Name:
|
|
Title:
|
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Schedule
I
Definitions
“Applicable
Percentage”
means
one divided by (a) 75% with respect to any repayment, redemption or repurchase
on or prior to September 15, 2011, (b) 50% with respect to any repayment,
redemption or repurchase after September 15, 2011 and on or prior to September
15, 2031 and (c) 25% with respect to any repayment, redemption or repurchase
after September 15, 2031 and prior to September 15, 2051.
“Business
Day”
means
each day other than (a) a Saturday or Sunday or (b) a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed or, on or after September 29, 2011, a day
that
is not a London business day. A “London
business day”
is
any
day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
“CENts”
has
the
meaning specified in Recital A.
“Commission”
means
the United States Securities and Exchange Commission.
“Common
Stock”
means
common stock of the Corporation (including treasury shares of common stock
and
shares of common stock sold pursuant to the Corporation’s dividend reinvestment
plan and employee benefit plans).
“Corporation”
has
the
meaning specified in the introduction to this instrument.
“Covered
Debt”
means
(a) at the date of this Replacement Capital Covenant and continuing to but
not
including the first Redesignation Date, the Initial Covered Debt and (b)
thereafter, commencing with each Redesignation Date and continuing to but not
including the next succeeding Redesignation Date, the Eligible Debt identified
pursuant to Section 3(b) as the Covered Debt for such period.
“Covered
Debtholder”
means
each Person (whether a Holder or a beneficial owner holding through a
participant in a clearing agency) that buys, holds or sells long-term
indebtedness for money borrowed of the Corporation during the period that such
long-term indebtedness for money borrowed is Covered Debt.
“Debt
Exchangeable for Equity”
means
a
security (or combination of securities) that:
(i) gives
the
holder a beneficial interest in (a) debt securities of the Corporation that
are
Non-Cumulative and that are the most junior subordinated debt of the Corporation
(or rank pari
passu
with the
most junior subordinated debt of the Corporation) and (b) a fractional interest
in a stock purchase contract;
(ii) includes
a
remarketing feature pursuant to which the subordinated debt of the Corporation
is remarketed to new investors commencing within five years from the date of
issuance of the security or earlier in the event of an early
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settlement
event based on one or more financial tests set forth in the terms of such
securities or related transaction agreements;
(iii) provides
for the proceeds raised in the remarketing to be used to purchase Qualifying
Non-Cumulative Preferred Stock;
(iv) includes
a
replacement capital covenant substantially similar to this Replacement Capital
Covenant, provided
that such
replacement capital covenant will apply to such security (or combination of
securities) and to the Qualifying Non-Cumulative Preferred Stock and will not
include Debt Exchangeable for Equity in the definition of Qualifying Capital
Securities”; and
(v) after
the
issuance of such Qualifying Non-Cumulative Preferred Stock, provides the holder
of the security with a beneficial interest in such Qualifying Non-Cumulative
Preferred Stock.
“Distribution
Date”
means,
as to any securities or combination of securities, the dates on which periodic
Distributions on such securities are scheduled to be made.
“Distribution
Period”
means,
as to any securities or combination of securities, each period from and
including a Distribution Date for such securities to but not including the
next
succeeding Distribution Date for such securities.
“Distributions”
means,
as to a security or combination of securities, dividends, interest payments
or
other income distributions to the holders thereof that are not Subsidiaries
of
the Corporation.
“Eligible
Debt”
means,
at any time, Eligible Subordinated Debt or, if no Eligible Subordinated Debt
is
then outstanding, Eligible Senior Debt.
“Eligible
Senior Debt”
means,
at any time in respect of any issuer, each series of outstanding long-term
indebtedness for money borrowed of such issuer that (a) upon a bankruptcy,
liquidation, dissolution or winding up of the issuer, ranks most senior among
the issuer’s then outstanding classes of indebtedness for money borrowed, (b) is
then assigned a rating by at least one NRSRO (provided that this clause (b)
shall apply on a Redesignation Date only if on such date the issuer has
outstanding senior long-term indebtedness for money borrowed that satisfies
the
requirements of clauses (a), (c) and (d) that is then assigned a rating by
at
least one NRSRO), (c) has an outstanding principal amount of not less than
$100,000,000, and (d) was issued through or with the assistance of a commercial
or investment banking firm or firms acting as underwriters, initial purchasers
or placement or distribution agents. For purposes of this definition as applied
to securities with a CUSIP number, each issuance of long-term indebtedness
for
money borrowed that has (or, if such indebtedness is held by a trust or other
intermediate entity established directly or indirectly by the issuer, the
securities of such intermediate entity that have) a separate CUSIP number shall
be deemed to be a series of the issuer’s long-term indebtedness for money
borrowed that is separate from each other series of such
indebtedness.
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“Eligible
Subordinated Debt”
means,
at any time in respect of any issuer, each series of the issuer’s
then-outstanding long-term indebtedness for money borrowed that (a) upon a
bankruptcy, liquidation, dissolution or winding up of the issuer, ranks
subordinate to the issuer’s then outstanding series of indebtedness for money
borrowed that ranks most senior, (b) is then assigned a rating by at least
one
NRSRO (provided that this clause (b) shall apply on a Redesignation Date only
if
on such date the issuer has outstanding subordinated long-term indebtedness
for
money borrowed that satisfies the requirements in clauses (a), (c) and (d)
that
is then assigned a rating by at least one NRSRO), (c) has an outstanding
principal amount of not less than $100,000,000, and (d) was issued through
or
with the assistance of a commercial or investment banking firm or firms acting
as underwriters, initial purchasers or placement or distribution agents. For
purposes of this definition as applied to securities with a CUSIP number, each
issuance of long-term indebtedness for money borrowed that has (or, if such
indebtedness is held by a trust or other intermediate entity established
directly or indirectly by the issuer, the securities of such intermediate entity
that have) a separate CUSIP number shall be deemed to be a series of the
issuer’s long-term indebtedness for money borrowed that is separate from each
other series of such indebtedness.
“Holder”
means,
as to the Covered Debt then in effect, each holder of such Covered Debt as
reflected on the securities register maintained by or on behalf of the
Corporation with respect to such Covered Debt.
“Indenture”
means the
Indenture, dated as of September 27, 2006, between the Corporation and Deutsche
Bank Trust Company Americas, as Trustee, as supplemented by the supplemental
indenture dated as of September 27, 2006.
“Initial
Covered Debt”
means
the Corporation’s 5.125% Senior Notes due 2010.
“Intent-Based
Replacement Disclosure” means,
as
to any security or combination of securities, that the Corporation has publicly
stated its intention, either in the prospectus or other offering document under
which such securities were initially offered for sale or in filings with the
Commission made by the Corporation under the Securities Exchange Act prior
to or
contemporaneously with the issuance of such securities, that the
Corporation will redeem or repurchase such securities only with the
proceeds of specified replacement capital securities that have terms and
provisions at the time of redemption or repurchase that are as or more
equity-like than the securities then being redeemed or repurchased, raised
within 180 days prior to the applicable redemption or repurchase
date.
“Mandatorily
Convertible Preferred Stock”
means
cumulative preferred stock with (a) no prepayment obligation on the part of
the
issuer thereof, whether at the election of the holders or otherwise, and (b)
a
requirement that the preferred stock convert into Common Stock of the
Corporation within three years from the date of its issuance at a conversion
ratio within a range established at the time of issuance of the preferred
stock.
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“Mandatory
Trigger Provision”
means
as
to any security or combination of securities (together in this definition,
“securities”), provisions in the terms thereof or of the related transaction
agreements that (A) require, or at its option in the case of Non-Cumulative
perpetual preferred stock permit, the issuer of such securities to make payment
of Distributions on such securities only pursuant to the issuance and sale
of
Common Stock or rights to purchase Common Stock up to a maximum of 2% of the
Corporation’s market capitalization or Qualifying Non-Cumulative Preferred Stock
of the Corporation, within two years of a failure by the Corporation to satisfy
one or more financial tests set forth in the terms of such securities or related
transaction agreements, in an amount such that the net proceeds of such sale
are
at least equal to the amount of unpaid Distributions on such securities
(including without limitation all deferred and accumulated amounts) and in
either case require the application of the net proceeds of such sale to pay
such
unpaid Distributions, provided that (i) the amount of Qualifying Non-Cumulative
Preferred Stock the net proceeds of which the issuer may apply to pay such
Distributions pursuant to such provision may not exceed 25% of the liquidation
or principal amount of such securities, and (ii) if the Mandatory Trigger
Provision requires such issuance and sale within one year of such failure and
the securities include an Optional Deferral Provision, such Mandatory Trigger
Provision need not limit the issuance of Common Stock or rights to purchase
Common Stock to a maximum of 2% of the Corporation’s market capitalization, (B)
prohibit the Corporation from repurchasing any of its Common Stock prior to
the
date six months after the issuer applies the net proceeds of the sales described
in clause (A) to pay such unpaid Distributions in full and (C) upon any
liquidation, dissolution, winding up, reorganization or in connection with
any
insolvency, receivership or proceeding under any bankruptcy law with respect
to
the Corporation, limit the claim of the holders of such securities (other than
Non-Cumulative perpetual preferred stock) for Distributions that accumulate
during a period in which the Corporation fails to satisfy one or more financial
tests set forth in the terms of such securities or related transaction
agreements to (x) 25% of the principal amount of such securities then
outstanding in the case of securities not permitting the issuance and sale
pursuant to the provisions described in clause (A) above of securities other
than Common Stock or rights to acquire Common Stock or (y) two years of
accumulated and unpaid Distributions (including compounded amounts thereon)
in
all other cases. No remedy other than Permitted Remedies will arise by the
terms
of such securities or related transaction agreements in favor of the holders
of
such securities as a result of the issuer’s failure to pay Distributions because
of the Mandatory Trigger Provision or as a result of the issuer’s exercise of
its right under an Optional Deferral Provision until Distributions have been
deferred for one or more Distribution Periods that total together at least
ten
years.
“Market
Disruption Events”
means
one or more events or circumstances substantially similar to those listed as
“Market Disruption Events” in the Supplemental Indenture.
“Measurement
Date”
means,
with respect to any repayment, redemption or repurchase of CENts, the later
of
(a) the date 180 days prior to delivery of notice of such repayment or
redemption or the date of such repurchase and (b) to the extent the CENts
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remain
outstanding after September 15, 2036, the most recent date, if any, on which
a
notice of repayment or redemption was delivered in respect of, or on which
the
Corporation repurchased, any CENts.
“Non-Cumulative” means,
with respect to any securities, that the issuer may elect not to make any number
of periodic Distributions or interest payments without any remedy arising under
the terms of the securities or related agreements in favor of the
holders,
other
than one or more Permitted Remedies. Securities that include either
(i) provisions requiring the Corporation to issue Non-Cumulative perpetual
preferred stock and Common Stock or rights to purchase Common Stock and apply
the proceeds to pay unpaid Distributions on terms substantially similar to
the
terms of the alternative payment mechanism described in Section 2.1(j) of the
Supplemental Indenture or (ii) a Mandatory Trigger Provision shall also be
deemed to be “Non-Cumulative” for all purposes of this Replacement Capital
Covenant other than the definition of “Qualifying Non-Cumulative Preferred
Stock”.
“NRSRO”
means
a
nationally recognized statistical rating organization within the meaning of
Rule
15c3-1(c)(2)(vi)(F) under the Securities Exchange Act.
“Optional
Deferral Provision”
means,
as to any securities, a provision in the terms thereof or of the related
transaction agreements to the following effect:
(a) the
issuer
of such securities may, in its sole discretion, defer in whole or in part
payment of Distributions on such securities for one or more consecutive
Distribution Periods of up to 5 years or, if an event substantially similar
to a
Market Disruption Event is continuing, ten years, without any remedy other
than
Permitted Remedies and the obligation described in clause (b) below;
and
(b) if
the
issuer of such securities has exhausted its right to defer Distributions and
no
event substantially similar to a Market Disruption Event is continuing, the
issuer will be obligated to issue rights to purchase common stock and/or
Non-Cumulative perpetual preferred stock in an amount such that the net proceeds
of such sale equal or exceed the amount of unpaid Distributions on such
securities (including without limitation all deferred and accumulated amounts)
and to apply the net proceeds of such sale to pay such unpaid Distributions
in
full.
“Permitted
Remedies”
means,
with respect to any securities, one or more of the following remedies:
(a) rights
in
favor of the holders of such securities permitting such holders to elect one
or
more directors of the issuer (including any such rights required by the listing
requirements of any stock or securities exchange on which such securities may
be
listed or traded), and
(b) complete
or partial prohibitions on the issuer paying Distributions on or repurchasing
common stock or other securities that rank pari
passu
with or
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junior
as
to Distributions to such securities for so long as Distributions on such
securities, including unpaid Distributions, remain unpaid.
“Person”
means
any individual, corporation, partnership, joint venture, trust, limited
liability company or corporation, unincorporated organization or government
or
any agency or political subdivision thereof.
“Prospectus
Supplement”
has
the
meaning specified in Recital C.
“Qualifying
Capital Securities”
means
securities (other than Common Stock, rights to acquire Common Stock and
securities convertible into Common Stock, such as Mandatorily Convertible
Preferred Stock and Debt Exchangeable for Equity) that, in the determination
of
the Corporation’s Board of Directors, reasonably construing the definitions and
other terms of this Replacement Capital Covenant, meet one of the following
criteria:
(i) in
connection with any redemption or repurchase of CENts on or prior to September
15, 2011:
(A)
securities issued by the Corporation or its Subsidiaries that (a) rank
pari
passu
with or
junior to the CENts upon the liquidation, dissolution or winding-up of the
Corporation, (b) have terms that are substantially similar to the terms of
the
CENts and guarantees described in this Prospectus Supplement and the attached
prospectus and (c) are subject to a replacement capital covenant substantially
similar to this Replacement Capital Covenant or have a Mandatory Trigger
Provision and are subject to Intent-Based Replacement Disclosure;
(B)
securities issued by the Corporation or its Subsidiaries that (1) rank
pari
passu
with or
junior to the CENts upon the liquidation, dissolution or winding up of the
Corporation, (2) are Non-Cumulative, (3) have no maturity or a maturity of
at least 55 years and (4) are subject to a replacement capital covenant
substantially similar to this Replacement Capital Covenant or have a Mandatory
Trigger Provision and are subject to Intent-Based Replacement Disclosure;
or
(C)
securities issued by the Corporation or its Subsidiaries that (1) rank
pari
passu
or junior
to other preferred stock of the issuer, (2) have no maturity or a maturity
of at
least 40 years, (3) are subject to a replacement capital covenant substantially
similar to this Replacement Capital Covenant and (4) have a Mandatory Trigger
Provision; or
(ii) in
connection with any repayment, redemption or repurchase of CENts after September
15, 2011 and on or prior to September 15, 2031:
(A)
all
securities described under clause (i) of this definition;
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(C)
securities issued by the Corporation or its Subsidiaries that (1) rank
pari
passu
with or
junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) are Non-Cumulative and (3) have no maturity or a maturity
of at
least 55 years and are subject to Intent-Based Replacement
Disclosure;
(D)
securities issued by the Corporation or its Subsidiaries that (1) rank
pari
passu
with or
junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) are Non-Cumulative, (3) have no maturity or a maturity of
at
least 40 years and (4) are subject to a replacement capital covenant
substantially similar to this Replacement Capital Covenant or have a Mandatory
Trigger Provision and are subject to Intent-Based Replacement
Disclosure;
(E)
securities issued by the Corporation or its Subsidiaries that (1) would rank
junior to all of the senior and subordinated debt of the Corporation other
than
the CENts, (2) have a Mandatory Trigger Provision and (3) have no maturity
or a
maturity of at least 55 years and are subject to Intent-Based Replacement
Disclosure;
(F)
cumulative preferred stock issued by the Corporation or its Subsidiaries that
(A) has no prepayment obligation on the part of the issuer thereof, whether
at
the election of the holders or otherwise, and (B) (1) has no maturity or a
maturity of at least 55 years and (2) is subject to a replacement capital
covenant substantially similar to this Replacement Capital Covenant;
or
(G)
other
securities issued by the Corporation or its Subsidiaries that (A) rank upon
a
liquidation, dissolution or winding-up of the Corporation either (1)
pari
passu
with or
junior to the CENts or (2) pari
passu
with the
claims of the Corporation’s trade creditors and junior to all of the
Corporation’s long-term indebtedness for money borrowed (other than the
Corporation’s long-term indebtedness for money borrowed from time to time
outstanding that by its terms ranks pari
passu with
such
securities on a liquidation, dissolution or winding-up of the Corporation);
and
(B) either (x) have no maturity or a maturity of at least 40 years, are subject
to Intent-Based Replacement Disclosure and have a Mandatory Trigger Provision
and or (y) have no maturity or a maturity of at least 25
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years
and
are subject to a replacement capital covenant substantially similar to this
Replacement Capital Covenant and have a Mandatory Trigger Provision; or
(iii) in
connection with any repayment, redemption or repurchase of CENts at any time
after September 15, 2031:
(A)
all
securities described under clauses (i) or (ii) of this definition;
(B)
preferred stock issued by the Corporation that (1) has no maturity or a maturity
of at least 55 years and is subject to Intent-Based Replacement Disclosure
and
(2) has an Optional Deferral Provision or a Ten-Year Optional Deferral
Provision;
(C)
securities issued by the Corporation or its Subsidiaries that (1) rank
pari
passu
with or
junior to the CENts upon a liquidation, dissolution or winding up of the
Corporation, (2) either (A) have no maturity or a maturity of at least 55 years
and are subject to Intent-Based Replacement Disclosure or (B) have no maturity
or a maturity of at least 30 years and are subject to a replacement capital
covenant substantially similar to this Replacement Capital Covenant and (3)
have
an Optional Deferral Provision or a Ten-Year Optional Deferral Provision;
(D)
securities issued by the Corporation or its Subsidiaries that (1) would rank
junior to all of the senior and subordinated debt of the Corporation other
than
the CENts, (2) have a Mandatory Trigger Provision and (3) have no maturity
or a
maturity of at least 30 years and are subject to Intent-Based Replacement
Disclosure; or
(E)
cumulative preferred stock issued by the Corporation or its Subsidiaries that
either (1) has no maturity or a maturity of at least 55 years and is subject
to
Intent-Based Replacement Disclosure or (2) has a maturity of at least 40 years
and is subject to a replacement capital covenant substantially similar to this
Replacement Capital Covenant.
“Qualifying
Non-Cumulative Preferred Stock”
means
Non-Cumulative perpetual preferred stock of the Corporation or its Subsidiaries
that ranks pari
passu
with or
junior to other preferred stock of the issuer, and, for purposes of clause
(a)
of the definition of Mandatory Trigger Provision, contains no remedies other
than Permitted Remedies and is either subject to a replacement capital covenant
substantially similar to this Replacement Capital Covenant or has a Mandatory
Trigger Provision and is subject to Intent-Based Replacement
Disclosure.
“Redesignation
Date”
means,
as to the Covered Debt in effect at any time, the earliest of (a) the date
that
is two years prior to the final maturity date of such Covered Debt, (b) if
the
Corporation elects to redeem, or the Corporation or a Subsidiary of the
I-8
Corporation
elects to repurchase, such Covered Debt either in whole or in part with the
consequence that after giving effect to such redemption or repurchase the
outstanding principal amount of such Covered Debt is less than $100,000,000,
the
applicable redemption or repurchase date and (c) if such Covered Debt is not
Eligible Subordinated Debt, the date on which the Corporation issues long-term
indebtedness for money borrowed that is Eligible Subordinated Debt.
“Replacement
Capital Covenant”
has
the
meaning specified in the introduction to this instrument.
“Supplemental
Indenture”
means
the Supplemental Indenture, dated as of September 27, 2006, between the
Corporation and Deutsche Bank Trust Company Americas, as Trustee.
“Securities
Exchange Act”
means
the Securities Exchange Act of 1934, as amended.
“Subsidiary”
means,
at any time, any Person the shares of stock or other ownership interests of
which having ordinary voting power to elect a majority of the board of directors
or other managers of such Person are at the time owned, or the management or
policies of which are otherwise at the time controlled, directly or indirectly
through one or more intermediaries (including other Subsidiaries) or both,
by
another Person.
“Ten-Year
Optional Deferral Provision”
means,
as to any securities, a provision in the terms thereof or of the related
transaction agreements to the effect that the issuer of such securities thereof
may, in its sole discretion, defer in whole or in part payment of Distributions
on such securities for one or more consecutive Distribution Periods of up to
ten
years without any remedy other than Permitted Remedies.
“Termination
Date”
has
the
meaning specified in Section 4(a).
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