INDENTURE by and between FLAGSTAR BANCORP, INC., as Company and WILMINGTON TRUST COMPANY, as Trustee Convertible Junior Subordinated Debt Securities Due September 15, 2039 Dated as of June 30, 2009
Exhibit 4.1
by and between
FLAGSTAR BANCORP, INC.,
as Company
as Company
and
WILMINGTON TRUST COMPANY,
as Trustee
as Trustee
Convertible Junior Subordinated Debt Securities
Due September 15, 2039
Due September 15, 2039
Dated as of June 30, 2009
TABLE OF CONTENTS
Page | ||||
ARTICLE I |
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DEFINITIONS |
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Section 1.01. Definitions |
1 | |||
ARTICLE II |
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DEBT SECURITIES |
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Section 2.01. Authentication and Dating |
9 | |||
Section 2.02. Form of Trustee’s Certificate of Authentication |
10 | |||
Section 2.03. Form and Denomination of Debt Securities |
10 | |||
Section 2.04. Execution of Debt Securities |
11 | |||
Section 2.05. Exchange and Registration of Transfer of Debt Securities |
11 | |||
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debt Securities |
14 | |||
Section 2.07. Temporary Debt Securities |
15 | |||
Section 2.08. Payment of Interest and Additional Interest |
15 | |||
Section 2.09. Cancellation of Debt Securities Paid, Etc |
17 | |||
Section 2.10. Computation of Interest |
17 | |||
Section 2.11. Extension of Payment Period |
17 | |||
Section 2.12. CUSIP Numbers |
18 | |||
Section 2.13. Income Tax Certification |
18 | |||
Section 2.14. Conversion of Debt Securities |
19 | |||
Section 2.15. Global Debt Securities |
25 | |||
ARTICLE III |
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PARTICULAR COVENANTS OF THE COMPANY |
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Section 3.01. Payment of Principal, Premium and Interest; Agreed
Treatment of the Debt Securities |
26 | |||
Section 3.02. Offices for Notices and Payments, Etc |
27 | |||
Section 3.03. Appointments to Fill Vacancies in Trustee’s Office |
27 | |||
Section 3.04. Provision as to Paying Agent |
27 | |||
Section 3.05. Certificate to Trustee |
28 | |||
Section 3.06. Additional Interest |
28 | |||
Section 3.07. Compliance With Consolidation Provisions |
29 | |||
Section 3.08. Limitation on Dividends |
29 | |||
Section 3.09. Covenants as to the Trust |
30 | |||
ARTICLE IV |
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SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
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Section 4.01. Securityholders’ Lists |
30 | |||
Section 4.02. Preservation and Disclosure of Lists |
30 | |||
Section 4.03. Financial and Other Information |
32 |
Page | ||||
ARTICLE V |
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REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF DEFAULT |
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Section 5.01. Events of Default |
32 | |||
Section 5.02. Payment of Debt Securities on Default; Suit Therefor |
34 | |||
Section 5.03. Application of Moneys Collected by Trustee |
36 | |||
Section 5.04. Proceedings by Securityholders |
36 | |||
Section 5.05. Proceedings by Trustee |
37 | |||
Section 5.06. Remedies Cumulative and Continuing; Delay or Omission Not a Waiver |
37 | |||
Section 5.07. Direction of Proceedings and Waiver of Defaults by Majority of
Securityholders |
37 | |||
Section 5.08. Notice of Defaults |
38 | |||
Section 5.09. Undertaking To Pay Costs |
39 | |||
ARTICLE VI |
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CONCERNING THE TRUSTEE |
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Section 6.01. Duties and Responsibilities of Trustee |
39 | |||
Section 6.02. Reliance on Documents, Opinions, Etc |
40 | |||
Section 6.03. No Responsibility for Recitals, Etc |
41 | |||
Section 6.04. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debt
Securities |
42 | |||
Section 6.05. Moneys To Be Held in Trust |
42 | |||
Section 6.06. Compensation and Expenses of Trustee |
42 | |||
Section 6.07. Officers’ Certificate as Evidence |
43 | |||
Section 6.08. Eligibility of Trustee |
43 | |||
Section 6.09. Resignation or Removal of Trustee |
44 | |||
Section 6.10. Acceptance by Successor Trustee |
45 | |||
Section 6.11. Succession by Merger, Etc |
46 | |||
Section 6.12. Authenticating Agents |
46 | |||
ARTICLE VII |
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CONCERNING THE SECURITYHOLDERS |
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Section 7.01. Action by Securityholders |
47 | |||
Section 7.02. Proof of Execution by Securityholders |
48 | |||
Section 7.03. Who Are Deemed Absolute Owners |
48 | |||
Section 7.04. Debt Securities Owned by Company Deemed Not Outstanding |
49 | |||
Section 7.05. Revocation of Consents; Future Holders Bound |
49 | |||
ARTICLE VIII |
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SECURITYHOLDERS’ MEETINGS |
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Section 8.01. Purposes of Meetings |
49 | |||
Section 8.02. Call of Meetings by Trustee |
50 | |||
Section 8.03. Call of Meetings by Company or Securityholders |
50 | |||
Section 8.04. Qualifications for Voting |
50 |
ii
Page | ||||
Section 8.05. Regulations |
50 | |||
Section 8.06. Voting |
51 | |||
Section 8.07. Quorum; Actions |
51 | |||
Section 8.08. Written Consent Without a Meeting |
52 | |||
ARTICLE IX |
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SUPPLEMENTAL INDENTURES |
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Section 9.01. Supplemental Indentures Without Consent of Securityholders |
52 | |||
Section 9.02. Supplemental Indentures With Consent of Securityholders |
54 | |||
Section 9.03. Effect of Supplemental Indentures |
55 | |||
Section 9.04. Notation on Debt Securities |
55 | |||
Section 9.05. Evidence of Compliance of Supplemental Indenture To Be Furnished to Trustee |
55 | |||
ARTICLE X |
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REDEMPTION OF SECURITIES |
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Section 10.01. Optional Redemption |
56 | |||
Section 10.02. Special Event Redemption |
56 | |||
Section 10.03. Notice of Redemption; Selection of Debt Securities |
56 | |||
Section 10.04. Payment of Debt Securities Called for Redemption |
57 | |||
ARTICLE XI |
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CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE |
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Section 11.01. Company May Consolidate, etc. On Certain Terms |
57 | |||
Section 11.02. Successor Entity To Be Substituted |
58 | |||
Section 11.03. Opinion of Counsel To Be Given to Trustee |
58 | |||
ARTICLE XII |
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SATISFACTION AND DISCHARGE OF INDENTURE |
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Section 12.01. Discharge of Indenture |
58 | |||
Section 12.02. Deposited Moneys To Be Held in Trust by Trustee |
59 | |||
Section 12.03. Paying Agent To Repay Moneys Held |
59 | |||
Section 12.04. Return of Unclaimed Moneys |
59 | |||
ARTICLE XIII |
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IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
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Section 13.01. Indenture and Debt Securities Solely Corporate Obligations |
60 | |||
ARTICLE XIV |
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MISCELLANEOUS PROVISIONS |
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Section 14.01. Successors |
60 | |||
Section 14.02. Official Acts by Successor Entity |
60 |
iii
Page | ||||
Section 14.03. Surrender of Company Powers |
60 | |||
Section 14.04. Addresses for Notices, Etc |
60 | |||
Section 14.05. Governing Law |
61 | |||
Section 14.06. Evidence of Compliance With Conditions Precedent |
61 | |||
Section 14.07. Non-Business Days |
61 | |||
Section 14.08. Table of Contents, Headings, Etc |
62 | |||
Section 14.09. Execution in Counterparts |
62 | |||
Section 14.10. Separability |
62 | |||
Section 14.11. Assignment |
62 | |||
Section 14.12. Acknowledgment of Rights |
62 | |||
ARTICLE XV |
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SUBORDINATION OF DEBT SECURITIES |
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Section 15.01. Agreement To Subordinate |
63 | |||
Section 15.02. Default on Senior Indebtedness |
63 | |||
Section 15.03. Liquidation, Dissolution, Bankruptcy |
63 | |||
Section 15.04. Subrogation |
65 | |||
Section 15.05. Trustee To Effectuate Subordination |
65 | |||
Section 15.06. Notice by the Company |
66 | |||
Section 15.07. Rights of the Trustee; Holders of Senior Indebtedness |
66 | |||
Section 15.08. Subordination May Not Be Impaired |
67 | |||
EXHIBIT A FORM OF CONVERTIBLE JUNIOR SUBORDINATED DEBT SECURITY DUE SEPTEMBER 15, 2039 |
A-1 | |||
EXHIBIT B FORM OF CERTIFICATE TO TRUSTEE |
1 |
iv
THIS INDENTURE, dated as of June 30, 2009, by and between FLAGSTAR BANCORP, INC., a savings
and loan holding company incorporated in Michigan (the “Company”), and WILMINGTON TRUST COMPANY, a
Delaware banking corporation, as trustee (the “Trustee”).
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of
its Convertible Junior Subordinated Debt Securities due September 15, 2039 (the “Debt Securities”)
under this Indenture to provide, among other things, for the execution and authentication, delivery
and administration thereof, and the Company has duly authorized the execution of this Indenture;
and
WHEREAS, all acts and things necessary to make this Indenture a valid agreement according to
its terms, have been done and performed;
NOW, THEREFORE, This Indenture Witnesseth:
In consideration of the premises, and the purchase of the Debt Securities by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit
of the respective holders from time to time of the Debt Securities as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective meanings specified in
this Section 1.01. All accounting terms used herein and not expressly defined shall have the
meanings assigned to such terms in accordance with generally accepted accounting principles and the
term “generally accepted accounting principles” means such accounting principles as are generally
accepted in the United States at the time of any computation. The words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
“Additional Interest” shall have the meaning set forth in Section 3.06.
“Additional Provisions” shall have the meaning set forth in Section 15.01.
“Authenticating Agent” means any agent or agents of the Trustee which at the time shall be
appointed and acting pursuant to Section 6.12.
“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief
of debtors.
“Board of Directors” means the board of directors or the executive committee or any other duly
authorized designated officers of the Company.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification and delivered to the Trustee.
“Business Day” means any day other than a Saturday, Sunday or any other day on which banking
institutions in Wilmington, Delaware, New York City or the city of the Principal Office of the
Trustee or the Company are permitted or required by any applicable law or executive order to close.
“Capital Securities” means undivided beneficial interests in the assets of the Trust which
rank pari passu with Common Securities issued by the Trust; provided, however, that upon the
occurrence and continuance of an Event of Default (as defined in the Declaration), the rights of
holders of such Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of holders of such Capital
Securities.
“Capital Securities Guarantee” means the guarantee agreement that the Company enters into with
Wilmington Trust Company, as guarantee trustee, or other Persons that operates directly or
indirectly for the benefit of holders of Capital Securities of the Trust.
“Capital Treatment Event” means the receipt by the Company and the Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of (a) the occurrence of any
amendment to, or change (including any announced prospective change) in, the laws, rules or
regulations of the United States or any political subdivision thereof or therein, or any rules,
guidelines or policies of any applicable regulatory authority for the Company or (b) any official
or administrative pronouncement or action or decision interpreting or applying such laws, rules or
regulations, which amendment or change is effective or which pronouncement, action or decision is
announced on or after the date of original issuance of the Debt Securities, that there is more than
an insubstantial risk that the Company is not or within 90 days of the date of such opinion will
not, be entitled to treat an amount equal to the aggregate Liquidation Amount of the Capital
Securities as “Tier 1 Capital” (or its then equivalent) for purposes of the capital adequacy
guidelines of the Federal Reserve or OTS, as applicable (or any successor regulatory authority with
jurisdiction over bank, savings and loan or financial holding companies), as then in effect and
applicable to the Company; provided, however, that the inability of the Company to treat all or any
portion of the Liquidation Amount of the Capital Securities as Tier l Capital shall not constitute
the basis for a Capital Treatment Event, if such inability results from the Company having
cumulative preferred stock, minority interests in consolidated subsidiaries, or any other class of
security or interest which the Federal Reserve or OTS, as applicable, may now or hereafter accord
Tier 1 Capital treatment in excess of the amount which may now or hereafter qualify for treatment
as Tier 1 Capital under applicable capital adequacy guidelines; provided further, however, that the
distribution of the Debt Securities in connection with the liquidation of the Trust by the Company
shall not in and of itself constitute a Capital Treatment Event unless such liquidation shall have
occurred in connection with a Tax Event or an Investment Company Event.
“Certificate” means a certificate signed by any one of the principal executive officer, the
principal financial officer or the principal accounting officer of the Company.
2
“Closing Price” means, with respect to the Common Stock on any date of determination, the
closing sale price or, if no closing sale price is reported, the last reported sale price of the
shares of the Common Stock on the NYSE on such date. If the Common Stock is not traded on the NYSE
on any date of determination, the Closing Price of the Common Stock on such date of determination
means the closing sale price as reported in the composite transactions for the principal U.S.
national or regional securities exchange on which the Common Stock is so listed or quoted, or, if
no closing sale price is reported, the last reported sale price on the principal U.S. national or
regional securities exchange on which the Common Stock is so listed or quoted, or if the Common
Stock is not so listed or quoted on a U.S. national or regional securities exchange, the last
quoted bid price for the Common Stock in the over-the-counter market as reported by Pink Sheets LLC
or similar organization, or, if that bid price is not available, the market price of the Common
Stock on that date as determined by a nationally recognized independent investment banking firm
retained by the Corporation for this purpose. For purposes of this Indenture, all references herein
to the “Closing Price” and “last reported sale price” of the Common Stock on the NYSE shall be such
closing sale price and last reported sale price as reflected on the website of the NYSE
(xxxx://xxx.xxxx.xxx) and as reported by Bloomberg Professional Service; provided that in the event
that there is a discrepancy between the closing sale price or last reported sale price as reflected
on the website of the NYSE and as reported by Bloomberg Professional Service, the closing sale
price and last reported sale price on the website of the NYSE shall govern. If the date of
determination is not a Trading Day, then such determination shall be made as of the last Trading
Day prior to such date.
“Common Securities” means undivided beneficial interests in the assets of the Trust which are
designated as “Common Securities” and rank pari passu with Capital Securities issued by the Trust;
provided, however, that upon the occurrence and continuance of an Event of Default (as defined in
the Declaration), the rights of holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of such Capital Securities.
“Common Stock” means the common stock, $0.01 par value per share, of the Company.
“Company” means Flagstar Bancorp, Inc., a savings and loan holding company incorporated in
Michigan, and, subject to the provisions of Article XI, shall include its successors and assigns.
“Conversion Agent” means the Person appointed to act on behalf of the Holders and
Securityholders in effecting the conversion of Debt Securities and/or Capital Securities to Common
Stock as and in the manner set forth in the Declaration and this Indenture.
“Conversion Date” has the meaning set forth in Section 2.14.
“Conversion Price” has the meaning set forth in Section 2.14.
“Conversion Request” means the irrevocable request to be given by a Trust Securities Holder to
the Conversion Agent in compliance with the Declaration directing the Conversion Agent to convert
such Capital Securities into Debt Securities and to convert such Debt Securities into Common Stock
on behalf of such Trust Securities Holder.
3
“Current Market Price” means, on any date, the average of the daily Closing Price per share of
the Common Stock on each of the five (5) consecutive Trading Days preceding the earlier of the day
before the date in question and the day before the Ex-Date with respect to the issuance or
distribution giving rise to an adjustment to the Conversion Price pursuant to Section 2.14.
“Debt Security” or “Debt Securities” has the meaning stated in the first recital of this
Indenture.
“Debt Security Register” has the meaning specified in Section 2.05.
“Debt Security Registrar” has the meaning specified in Section 2.05.
“Declaration” means the Amended and Restated Declaration of Trust of the Trust, as amended or
supplemented from time to time.
“Default” means any event, act or condition that with notice or lapse of time, or both, would
constitute an Event of Default.
“Defaulted Interest” has the meaning set forth in Section 2.08.
“Deferred Interest” has the meaning set forth in Section 2.11.
“Depositary” means an organization registered as a clearing agency under the Exchange Act that
is designated as Depositary by the Company or any successor thereto. The initial Depositary if
Global Debt Securities are issued will be DTC.
“Depositary Participant” means a broker, dealer, bank, other financial institution or other
Person for whom from time to time the Depositary effects book-entry transfers and pledges of
securities deposited with the Depositary.
“DTC” means The Depository Trust Company, a New York corporation, or its successor.
“Event of Default” means any event specified in Section 5.01, which has continued for the
period of time, if any, and after the giving of the notice, if any, therein designated.
“Ex-Date” means, with respect to any issuance or distribution, the first date on which the
Common Stock or other securities trade without the right to receive the issuance or distribution
giving rise to an adjustment to the Conversion Price pursuant to Section 2.14.
“Extension Period” has the meaning set forth in Section 2.11.
“Federal Reserve” means the Board of Governors of the Federal Reserve System, or its
designated district bank, as applicable, and any successor federal agency that is primarily
responsible for regulating the activities of bank holding companies.
“Global Debt Security” means a security that evidences all or part of the Debt Securities, the
ownership and transfers of which shall be made through book entries by a Depositary.
4
“Indenture” means this instrument as originally executed or, if amended or supplemented as
herein provided, as so amended or supplemented, or both.
“Institutional Trustee” has the meaning set forth in the Declaration.
“Interest Payment Date” means March 15, June 15, September 15 and December 15 of each year
during the term of this Indenture, or if such day is not a Business Day, then the next succeeding
Business Day (it being understood that interest accrues for any such non-Business Day but such
interest will be paid on the next Interest Payment Date), commencing on September 15, 2009.
“Interest Rate” means 10.00% per annum.
“Investment Company Event” means the receipt by the Company and the Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of a change in law or
regulation or written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Trust is or, within 90 days of the
date of such opinion will be considered an “investment company” that is required to be registered
under the Investment Company Act of 1940, as amended which change or prospective change becomes
effective or would become effective, as the case may be, on or after the date of the original
issuance of the Debt Securities.
“Liquidation Amount” means the liquidation amount of $1,000 per Trust Security.
“Maturity Date” means September 15, 2039.
“Notice” has the meaning set forth in Section 2.11.
“NYSE” means The New York Stock Exchange.
“Officers’ Certificate” means a certificate signed by the Chairman of the Board, the Vice
Chairman, the President or any Vice President, and by the Chief Financial Officer, the Treasurer,
an Assistant Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee. Each such certificate shall include the
statements provided for in Section 14.06 if and to the extent required by the provisions of such
Section.
“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an
employee of or counsel to the Company, or may be other counsel reasonably satisfactory to the
Trustee. Each such opinion shall include the statements provided for in Section 14.06 if and to
the extent required by the provisions of such Section.
“OTS” means the Office of Thrift Supervision and any successor federal agency that is
primarily responsible for regulating the activities of savings and loan holding companies.
5
“Outstanding,” means, when used with reference to Debt Securities, subject to the provisions
of Section 7.04, as of any particular time, all Debt Securities authenticated and delivered by the
Trustee or the Authenticating Agent under this Indenture, except:
(a) Debt Securities theretofore canceled by the Trustee or the Authenticating Agent or
delivered to the Trustee for cancellation;
(b) Debt Securities, or portions thereof, for the payment or redemption of which moneys
in the necessary amount shall have been deposited in trust with the Trustee or with any
Paying Agent (other than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent); provided, however, that,
if such Debt Securities, or portions thereof, are to be redeemed prior to maturity thereof,
notice of such redemption shall have been given as provided in Articles X and XIV or
provision satisfactory to the Trustee shall have been made for giving such notice; and
(c) Debt Securities paid pursuant to Section 2.06 or in lieu of or in substitution for
which other Debt Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.06 unless proof satisfactory to the Company and the Trustee is presented
that any such Debt Securities are held by bona fide holders in due course.
“Paying Agent” has the meaning set forth in Section 3.04(e).
“Payment Period” means (a) with respect to the first Interest Payment Date, the period
beginning on (and including) the date of original issuance and ending on (but excluding) the
Interest Payment Date on September 15, 2009; (b) with respect to each successive Interest Payment
Date, the period beginning on (and including) the preceding Interest Payment Date and ending on
(but excluding) such current Interest Payment Date or, in the case of the last Payment Period, the
Redemption Date, Special Redemption Date or Maturity Date, as the case may be.
“Person” means any individual, corporation, limited liability company, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
“Predecessor Security” means, of any particular Debt Security, every previous Debt Security
evidencing all or a portion of the same debt as that evidenced by such particular Debt Security;
and, for purposes of this definition, any Debt Security authenticated and delivered under
Section 2.06 in lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence the
same debt as the lost, destroyed or stolen Debt Security.
“Principal Office of the Trustee,” or other similar term, means the office of the Trustee, at
which at any particular time its corporate trust business shall be principally administered, which
at all times shall be located within the United States and at the time of the execution of this
Indenture shall be Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
“Redemption Date” has the meaning set forth in Section 10.01.
6
“Redemption Notice” has the meaning set forth in Section 10.03.
“Redemption Price” means 100% of the principal amount of the Debt Securities being redeemed,
plus accrued and unpaid interest (including any Deferred Interest) on such Debt Securities to the
Redemption Date.
“Redemption/Distribution Notice” has the meaning set forth in the Declaration.
“Responsible Officer” means, with respect to the Trustee, any officer with responsibility for
the administration of this Indenture, the Declaration or the Guarantee within the Principal Office
of the Trustee, including any vice president, any assistant vice president, any secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer or other officer of
the Principal Trust Office of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because of that officer’s
knowledge of and familiarity with the particular subject.
“Securities Act” means the Securities Act of 1933, as amended from time to time or any
successor legislation.
“Securityholder,” “holder of Debt Securities,” or other similar terms, means any Person in
whose name at the time a particular Debt Security is registered on the Debt Security Register.
“Senior Indebtedness” means, with respect to the Company, (a) the principal, premium, if any,
and interest in respect of (i) indebtedness of the Company for all borrowed and purchased money;
and (ii) indebtedness evidenced by securities, debentures, notes, bonds or other similar
instruments issued by the Company; (b) all capital lease obligations of the Company; (c) all
obligations of the Company issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations of the Company under any title
retention agreement; (d) all obligations of the Company for the reimbursement of any letter of
credit, any banker’s acceptance, any security purchase facility, any repurchase agreement or
similar arrangement, any interest rate swap, any other hedging arrangement, any obligation under
options or any similar credit or other transaction; (e) all obligations of the Company associated
with derivative products such as interest and foreign exchange rate contracts, commodity contracts,
and similar arrangements; (f) all obligations of the type referred to in clauses (a) – (e) above of
other Persons for the payment of which the Company is responsible or liable as obligor, guarantor
or otherwise, including, without limitation, similar obligations arising from off-balance sheet
guarantees and direct credit substitutes; and (g) all obligations of the type referred to in
clauses (a) – (f) above of other Persons secured by any lien on any property or asset of the
Company (whether or not such obligation is assumed by the Company), whether incurred on or prior to
the date of this Indenture or thereafter incurred. Notwithstanding the foregoing, “Senior
Indebtedness” shall not include (A) Debt Securities issued pursuant to this Indenture and
guarantees in respect of such Debt Securities; (B) trade accounts payable of the Company arising in
the ordinary course of business (such trade accounts payable being pari passu in right of payment
to the Debt Securities); (C) other obligations with respect to which in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is provided that such
obligations are pari passu, junior or otherwise not superior in right of payment to the Debt
7
Securities; or (D) any debt securities issued to any trust other than the Trust (or a trustee
of such trust) that is a financing vehicle of the Company (a “financing entity”), in connection
with the issuance by such financing entity of equity or other securities in transactions
substantially similar in structure to the transactions contemplated hereunder and in the
Declaration, (E) any guarantees of the Company in respect of the equity or other securities of any
financing entity referred to in clause (D) above or (F) any other instruments classified as
subordinated or pari passu to the Debt Securities by the Federal Reserve or OTS from time to time
hereafter. Senior Indebtedness shall continue to be Senior Indebtedness and be entitled to the
subordination provisions irrespective of any amendment, modification or waiver of any term of such
Senior Indebtedness.
“Special Event” means any of a Capital Treatment Event, an Investment Company Event or a Tax
Event.
“Special Redemption Date” has the meaning set forth in Section 10.02.
“Special Redemption Price” means 100% of the principal amount of the Debt Securities being
redeemed, plus accrued and unpaid interest (including any Deferred Interest) on such Debt
Securities to the Special Redemption Date.
“Stock Price” shall mean, as determined by the Company in the manner set forth in Section
2.14, the product of 90% and the volume-weighted average Closing Price of the Common Stock for the
period from February 1, 2009 to April 1, 2010; provided, that the Stock Price shall be no less than
$0.80 and no greater than $2.00.
“Subsidiary” means with respect to any Person, (a) any corporation at least a majority of the
outstanding voting stock of which is owned, directly or indirectly, by such Person or by one or
more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; (b) any general
partnership, joint venture or similar entity, at least a majority of the outstanding partnership or
similar interests of which shall at the time be owned by such Person, or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries; and (c) any limited
partnership of which such Person or any of its Subsidiaries is a general partner. For the purposes
of this definition, “voting stock” means shares, interests, participations or other equivalents in
the equity interest (however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason of the occurrence
of a contingency.
“Tax Event” means the receipt by the Company and the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment to or change
(including any announced prospective change) in the laws or any regulations thereunder of the
United States or any political subdivision or taxing authority thereof or therein, or as a result
of any official administrative pronouncement (including any private letter ruling, technical advice
memorandum, field service advice, regulatory procedure, notice or announcement, including any
notice or announcement of intent to adopt such procedures or regulations) (an “Administrative
Action”) or judicial decision interpreting or applying such laws or regulations, regardless of
whether such Administrative Action or judicial decision is issued to or in connection with a
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proceeding involving the Company or the Trust and whether or not subject to review or appeal,
which amendment, clarification, change, Administrative Action or decision is enacted, promulgated
or announced, in each case on or after the date of original issuance of the Debt Securities, there
is more than an insubstantial risk that: (a) the Trust is, or will be within 90 days of the date of
such opinion, subject to United States federal income tax with respect to income received or
accrued on the Debt Securities; (b) interest payable by the Company on the Debt Securities is not,
or within 90 days of the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States federal income tax purposes; or (c) the Trust is, or will be within
90 days of the date of such opinion, subject to or otherwise required to pay, or required to
withhold from distributions to holders of Trust Securities, more than a de minimis amount of other
taxes (including withholding taxes), duties, assessments or other governmental charges.
“Trading Day” means a day on which the shares of Common Stock: (a) are not suspended from
trading on any national or regional securities exchange or association or over-the-counter market
at the close of business; and (b) have traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market for the trading of
the Common Stock.
“Trust” means Flagstar Statutory Trust XI, a Delaware statutory trust, or any other similar
trust created for the purpose of issuing Capital Securities in connection with the issuance of Debt
Securities under this Indenture, of which the Company is the sponsor.
“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended from time to time, or
any successor legislation.
“Trust Securities” means Common Securities and Capital Securities of the Trust.
“Trust Securities Holder,” “Holder of Trust Securities,” or other similar terms, has the
meaning given the term “Holder” in the Declaration.
“Trustee” means the Person identified as “Trustee” in the first paragraph hereof, and, subject
to the provisions of Article VI hereof, shall also include its successors and assigns as Trustee
hereunder.
“U.S. Person” has the meaning given to United States Person as set forth in Section
7701(a)(30) of the Internal Revenue Code of 1986, as amended.
ARTICLE II
DEBT SECURITIES
Section 2.01. Authentication and Dating. Upon the execution and delivery of this Indenture,
or from time to time thereafter, Debt Securities in an aggregate principal amount not in excess of
$51,547,000 may be executed and delivered by the Company to the Trustee for authentication, and the
Trustee, upon receipt of a written authentication order from the Company, shall thereupon
authenticate and make available for delivery said Debt Securities to or upon the written order of
the Company, signed by its Chairman of the Board of Directors, Chief Executive
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Officer, Vice Chairman, President or Chief Financial Officer or one of its Vice Presidents
without any further action by the Company hereunder. Notwithstanding anything to the contrary
contained herein, the Trustee shall be fully protected in relying upon the aforementioned
authentication order and written order in authenticating and delivering said Debt Securities. In
authenticating such Debt Securities, and accepting the additional responsibilities under this
Indenture in relation to such Debt Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.01) shall be fully protected in relying upon a copy of any Board Resolution
or Board Resolutions relating thereto and, if applicable, an appropriate record of any action taken
pursuant to such resolution, in each case certified by the Secretary or an Assistant Secretary or
other officers with appropriate delegated authority of the Company, as the case may be.
The Trustee shall have the right to decline to authenticate and deliver any Debt Securities
under this Section if the Trustee, being advised in writing by counsel, determines that such action
may not lawfully be taken or if a Responsible Officer of the Trustee in good faith shall determine
that such action would expose the Trustee to personal liability to existing Securityholders. The
Trustee shall also be entitled to receive an opinion of counsel to the effect that (1) all
conditions precedent to the execution, delivery and authentication of the Debt Securities have been
complied with; (2) the Debt Securities are not required to be registered under the Securities Act;
and (3) the Indenture is not required to be qualified under the Trust Indenture Act.
The definitive Debt Securities shall be typed, printed, lithographed or engraved on steel
engraved borders or may be produced in any other manner, all as determined by the officers
executing such Debt Securities, as evidenced by their execution of such Debt Securities.
Section 2.02. Form of Trustee’s Certificate of Authentication. The Trustee’s certificate of
authentication on all Debt Securities shall be in substantially the following form:
This is one of the Debt Securities referred to in the within mentioned Indenture.
WILMINGTON TRUST COMPANY, not in its individual capacity but solely as Trustee |
||||
By | ||||
Authorized Signatory |
Section 2.03. Form and Denomination of Debt Securities. The Debt Securities shall be
substantially in the form of Exhibit A attached hereto. The Debt Securities shall be in
registered, certificated form without coupons and in minimum denominations of $100,000 and any
multiple of $1,000 in excess thereof. Any attempted transfer of the Debt Securities in a block
having an aggregate principal amount of less than $100,000 face amount shall be deemed to be void
and of no legal effect whatsoever. Any such purported transferee shall be deemed not to be a
holder of such Debt Securities for any purpose, including, but not limited to, the receipt of
payments on such Debt Securities, and such purported transferee shall be deemed to have no interest
whatsoever in such Debt Securities. The Debt Securities shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plans as the officers
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executing the same may determine with the approval of the Trustee as evidenced by the
execution and authentication thereof.
Section 2.04. Execution of Debt Securities. The Debt Securities shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of any of its Chairman of the
Board of Directors, Chief Executive Officer, Vice Chairman, President or Chief Financial Officer or
one of its Executive Vice Presidents, Senior Vice Presidents or Vice Presidents, under its
corporate seal (if legally required), which may be affixed thereto or printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise, and which need not be attested. Only such
Debt Securities as shall bear thereon a certificate of authentication substantially in the form
herein before recited, executed by the Trustee or the Authenticating Agent by the manual signature
of an authorized officer, shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee or the Authenticating Agent upon any
Debt Security executed by the Company shall be conclusive evidence that the Debt Security so
authenticated has been duly authenticated and delivered hereunder and that the Securityholder is
entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the Debt Securities shall
cease to be such officer before the Debt Securities so signed shall have been authenticated and
delivered by the Trustee or the Authenticating Agent, or disposed of by the Company, such Debt
Securities nevertheless may be authenticated and delivered or disposed of as though the Person who
signed such Debt Securities had not ceased to be such officer of the Company; and any Debt Security
may be signed on behalf of the Company by such Persons as, at the actual date of the execution of
such Debt Security, shall be the proper officers of the Company, although at the date of the
execution of this Indenture any such person was not such an officer.
Every Debt Security shall be dated the date of its authentication.
Section 2.05. Exchange and Registration of Transfer of Debt Securities. The Trustee is
initially appointed by the Company to serve as “Debt Security Registrar.” The Trustee shall cause
to be kept, at the office or agency maintained for the purpose of registration of transfer and for
exchange as provided in Section 3.02, a register (the “Debt Security Register”) for the Debt
Securities issued hereunder in which, subject to such reasonable regulations as it may prescribe,
the Debt Security Registrar shall provide for the registration and transfer of all Debt Securities
as provided in this Article II. Such register shall be in written form or in any other form
capable of being converted into written form within a reasonable time.
Debt Securities to be exchanged may be surrendered at the Principal Office of the Trustee or
at any office or agency to be maintained by the Company for such purpose as provided in
Section 3.02, and the Company shall execute, the Company or the Trustee shall register and the
Trustee or the Authenticating Agent shall authenticate and make available for delivery in exchange
therefor the Debt Security or Debt Securities which the Securityholder making the exchange shall be
entitled to receive. Upon due presentment for registration of transfer of any Debt Security at the
Principal Office of the Trustee or at any office or agency of the Company maintained for such
purpose as provided in Section 3.02, the Company shall execute, the Company or the Trustee shall
register and the Trustee or the Authenticating Agent shall authenticate and make available for
delivery in the name of the transferee or transferees a new
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Debt Security for a like aggregate principal amount. Registration or registration of transfer
of any Debt Security by the Trustee or by any agent of the Company appointed pursuant to
Section 3.02, and delivery of such Debt Security, shall be deemed to complete the registration or
registration of transfer of such Debt Security.
All Debt Securities presented for registration of transfer or for exchange or payment shall
(if so required by the Company or the Trustee or the Authenticating Agent) be duly endorsed by, or
be accompanied by a written instrument or instruments of transfer in form satisfactory to the
Company and the Trustee or the Authenticating Agent duly executed by, the Securityholder or such
Securityholder’s attorney duly authorized in writing.
Neither the Trustee nor the Debt Security Registrar shall be responsible for ascertaining
whether any transfer hereunder complies with the registration provisions of or any exemptions from
the Securities Act (under and as defined in the Declaration), applicable state securities laws or
the applicable laws of any other jurisdiction, ERISA, the United States Internal Revenue Code of
1986, as amended, or the Investment Company Act (under and as defined in the Declaration).
No service charge shall be made for any exchange or registration of transfer of Debt
Securities, but the Company or the Trustee may require payment of a sum sufficient to cover any
tax, fee or other governmental charge that may be imposed in connection therewith.
The Company or the Trustee shall not be required to exchange or register a transfer of any
Debt Security for a period of 15 days immediately preceding the date of selection of Debt
Securities for redemption.
Notwithstanding anything herein to the contrary, Debt Securities may not be transferred except
in compliance with the restricted securities legend set forth below, unless otherwise determined by
the Company, upon the advice of counsel, in accordance with applicable law, which legend shall be
placed on each Debt Security:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) TO A “NON U.S. PERSON” IN AN “OFFSHORE TRANSACTION” PURSUANT TO
REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM THE
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REGISTRATION REQUIREMENTS OF THE SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING
OF SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN “ACCREDITED INVESTOR,” FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT
IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT
TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), (EACH A “PLAN”), OR AN ENTITY
WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND
NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST
THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S.
DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR
ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY
PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY
ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A
TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON
OR ENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii)
SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE COMPANY AND
TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
13
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A PRINCIPAL AMOUNT
OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF
THIS SECURITY IN A BLOCK HAVING A PRINCIPAL AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF THIS SECURITY FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN THIS SECURITY.
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND
OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION. THIS OBLIGATION IS
SUBORDINATED TO THE CLAIMS OF DEPOSITORS AND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE
COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS
NOT SECURED.
THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debt Securities. In case any Debt
Security shall become mutilated or be destroyed, lost or stolen, the Company shall execute, and
upon its written request the Trustee shall authenticate and deliver, a new Debt Security bearing a
number not contemporaneously outstanding, in exchange and substitution for the mutilated Debt
Security, or in lieu of and in substitution for the Debt Security so destroyed, lost or stolen. In
every case the applicant for a substituted Debt Security shall furnish to the Company and the
Trustee such security or indemnity as may be required by them to save each of them harmless, and,
in every case of destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of such Debt Security
and of the ownership thereof.
The Trustee may authenticate any such substituted Debt Security and deliver the same upon the
written request or authorization of any officer of the Company. Upon the issuance of any
substituted Debt Security, the Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any other expenses
connected therewith. In case any Debt Security which has matured or is about to mature or has been
called for redemption in full shall become mutilated or be destroyed, lost or stolen, the Company
may, instead of issuing a substitute Debt Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debt Security) if the applicant for
such payment shall furnish to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless and, in case of destruction, loss or theft, evidence
satisfactory to the Company and to the Trustee of the destruction, loss or theft of such Security
and of the ownership thereof.
14
Every substituted Debt Security issued pursuant to the provisions of this Section 2.06 by
virtue of the fact that any such Debt Security is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Debt
Security shall be found at any time, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debt Securities duly issued hereunder. All Debt
Securities shall be held and owned upon the express condition that, to the extent permitted by
applicable law, the foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Debt Securities and shall preclude any and all other rights
or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with
respect to the replacement or payment of negotiable instruments or other securities without their
surrender.
Section 2.07. Temporary Debt Securities. Pending the preparation of definitive Debt
Securities, the Company may execute and the Trustee shall authenticate and make available for
delivery temporary Debt Securities that are typed, printed or lithographed. Temporary Debt
Securities shall be issuable in any authorized denomination, and substantially in the form of the
definitive Debt Securities in lieu of which they are issued but with such omissions, insertions and
variations as may be appropriate for temporary Debt Securities, all as may be determined by the
Company. Every such temporary Debt Security shall be executed by the Company and be authenticated
by the Trustee upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities. Without unreasonable delay the Company will execute and
deliver to the Trustee or the Authenticating Agent definitive Debt Securities and thereupon any or
all temporary Debt Securities may be surrendered in exchange therefor, at the Principal Office of
the Trustee or at any office or agency maintained by the Company for such purpose as provided in
Section 3.02, and the Trustee or the Authenticating Agent shall authenticate and make available for
delivery in exchange for such temporary Debt Securities a like aggregate principal amount of such
definitive Debt Securities. Such exchange shall be made by the Company at its own expense and
without any charge therefor except that in case of any such exchange involving a registration of
transfer the Company may require payment of a sum sufficient to cover any tax, fee, or other
governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary
Debt Securities shall in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities authenticated and delivered hereunder.
Section 2.08. Payment of Interest and Additional Interest. Interest at the Interest Rate and
any Deferred Interest on any Debt Security that is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the Person in whose name said Debt Security (or
one or more Predecessor Securities) is registered at the close of business on the regular record
date for such interest installment except that interest and any Deferred Interest payable on the
Maturity Date, the Redemption Date (to the extent redeemed) or the Special Redemption Date shall be
paid to the Person to whom principal is paid. In the event that any Debt Security or portion
thereof is called for redemption and the redemption date is subsequent to a regular record date
with respect to any Interest Payment Date and either on or prior to such Interest Payment Date,
interest on such Debt Security will be paid upon presentation and surrender of such Debt Security.
15
Each Debt Security shall bear interest from the date of original issuance at the Interest
Rate, applied to the principal amount thereof, until the principal thereof becomes due and payable,
and on any overdue principal and to the extent that payment of such interest is enforceable under
applicable law (without duplication) on any overdue installment of interest (including Deferred
Interest) at the Interest Rate, compounded quarterly. Interest shall be payable (subject to any
relevant Extension Period) quarterly in arrears on each Interest Payment Date with the first
installment of interest to be paid on the Interest Payment Date on September 15, 2009.
Any interest on any Debt Security, other than Deferred Interest, that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted
Interest”) shall forthwith cease to be payable to the registered Securityholder on the relevant
regular record date by virtue of having been such Securityholder; and such Defaulted Interest shall
be paid by the Company to the Persons in whose names such Debt Securities (or their respective
Predecessor Securities) are registered at the close of business on a special record date for the
payment of such Defaulted Interest, which shall be fixed in the following manner: the Company shall
notify the Trustee in writing at least 25 days prior to the date of the proposed payment of the
amount of Defaulted Interest proposed to be paid on each such Debt Security and the date of the
proposed payment, and at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements reasonably satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest which shall not be more
than fifteen nor less than the Business Day prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such special record date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the
special record date therefor to be mailed, first-class postage prepaid, to each Securityholder at
its address as it appears in the Debt Security Register, not less than 10 days prior to such
special record date. Notice of the proposed payment of such Defaulted Interest and the special
record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names such Debt Securities (or their respective Predecessor Securities) are
registered on such special record date and shall be no longer payable.
The Company may make payment of any Deferred Interest on any Debt Securities in any other
lawful manner after notice given by the Company to the Trustee of the proposed payment method;
provided, however, the Trustee in its sole discretion deems such payment method to be practical.
Any interest (including Deferred Interest) scheduled to become payable on an Interest Payment
Date occurring during an Extension Period shall not be Defaulted Interest and shall be payable on
such other date as may be specified in the terms of such Debt Securities.
The term “regular record date” as used in this Indenture shall mean the close of business on
the Business Day preceding the applicable Interest Payment Date.
16
Subject to the foregoing provisions of this Section, each Debt Security delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any other Debt Security
shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such
other Debt Security.
Section 2.09. Cancellation of Debt Securities Paid, Etc. All Debt Securities surrendered for
the purpose of payment, redemption, exchange or registration of transfer, shall, if surrendered to
the Company or any Paying Agent, be surrendered to the Trustee and promptly canceled by it, or, if
surrendered to the Trustee or any Authenticating Agent, shall be promptly canceled by it, and no
Debt Securities shall be issued in lieu thereof except as expressly permitted by any of the
provisions of this Indenture. The Trustee shall dispose of or destroy all canceled Debt Securities
in accordance with its customary practices unless the Company otherwise directs the Trustee in
writing, in which case the Trustee shall dispose of such Debt Securities as directed by the
Company. If the Company shall acquire any of the Debt Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by such Debt Securities
unless and until the same are surrendered to the Trustee for cancellation.
Section 2.10. Computation of Interest. The amount of interest payable for each Payment
Period will be calculated by applying the Interest Rate to the principal amount outstanding at the
commencement of the Payment Period on the basis of a 360-day year consisting of twelve 30-day
months; provided, however, that upon the occurrence of a Special Event Redemption
pursuant to Section 10.02 the amounts payable pursuant to this Indenture shall be calculated as set
forth in the definition of Special Redemption Price. All percentages resulting from any
calculations on the Debt Securities will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a percentage point rounded
upward (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all dollar
amounts used in or resulting from such calculation will be rounded to the nearest cent (with
one-half cent being rounded upward).
The Interest Rate for any Payment Period will at no time be higher than the maximum rate then
permitted by New York law as the same may be modified by United States law.
Subject to the corrective rights set forth above, all certificates, communications, opinions,
determinations, calculations, quotations and decisions given, expressed, made or obtained for the
purposes of the provisions relating to the payment and calculation of interest on the Debt
Securities and distributions on the Capital Securities by the Trustee or the Institutional Trustee
will (in the absence of willful default, bad faith and manifest error) be final, conclusive and
binding on the Trust, the Company and all of the Securityholders and the Capital Securities, and no
liability shall (in the absence of willful default, bad faith or manifest error) attach to the
Trustee or the Institutional Trustee in connection with the exercise or non-exercise by either of
them or their respective powers, duties and discretion.
Section 2.11. Extension of Payment Period. So long as no Event of Default pursuant to
paragraphs (c), (e), (f) or (g) of Section 5.01 of the Indenture has occurred and is continuing,
the Company shall have the right under the Indenture, from time to time and without causing an
Event of Default, to defer payments of interest on the Debt Securities by extending the Payment
17
Period on the Debt Securities at any time and from time to time during the term of the Debt
Securities, for up to twenty consecutive quarterly periods (each such extended Payment Period, an
“Extension Period”), during which Extension Period no interest shall be due and payable (except any
Additional Interest that may be due and payable). No Extension Period may end on a date other than
an Interest Payment Date. During any Extension Period, interest will continue to accrue on the
Debt Securities, and interest on such accrued interest (such accrued interest and interest thereon
referred to herein as “Deferred Interest”) will accrue at an annual rate equal to the Interest Rate
applicable during such Extension Period, compounded quarterly from the date such Deferred Interest
would have been payable were it not for the Extension Period, to the extent permitted by law. No
interest or Deferred Interest shall be due and payable during an Extension Period, except at the
end thereof. At the end of any such Extension Period the Company shall pay all Deferred Interest
then accrued and unpaid on the Debt Securities; provided, however, that no Extension Period may
extend beyond the Maturity Date, Redemption Date (to the extent redeemed) or Special Redemption
Date; and provided further, however, that during any such Extension Period, the Company shall be
subject to the restrictions set forth in Section 3.08 of this Indenture. Prior to the termination
of any Extension Period, the Company may further extend such period; provided that such period
together with all such previous and further consecutive extensions thereof shall not exceed 20
consecutive quarterly periods, or extend beyond the Maturity Date, Redemption Date (to the extent
redeemed) or Special Redemption Date. Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Company may commence a new Extension Period, subject to the
foregoing requirements. No interest or Deferred Interest shall be due and payable during an
Extension Period, except at the end thereof, but Deferred Interest shall accrue upon each
installment of interest that would otherwise have been due and payable during such Extension Period
until such installment is paid. The Company must give the Trustee notice of its election to begin
any Extension Period or extend an Extension Period (“Notice”) not later than the related regular
record date for the relevant Interest Payment Date. The Notice shall describe, in reasonable
detail, why the Company has elected to begin an Extension Period. The Notice shall acknowledge and
affirm the Company’s understanding that it is prohibited from issuing dividends and other
distributions during the Extension Period. Upon receipt of the Notice, the Placement Agent shall
have the right, at its sole discretion, to disclose the name of the Company, the fact that the
Company has elected to begin an Extension Period and other information that such Placement Agent,
at its sole discretion, deems relevant to the Company’s election to begin an Extension Period. The
Trustee shall give notice of the Company’s election to begin a new Extension Period to the
Securityholders.
Section 2.12. CUSIP Numbers. The Company in issuing the Debt Securities may use “CUSIP”
numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Securityholders; provided, however, that any such notice may state
that no representation is made as to the correctness of such numbers either as printed on the Debt
Securities or as contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debt Securities, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will promptly notify the
Trustee in writing of any change in the CUSIP numbers.
Section 2.13. Income Tax Certification. As a condition to the payment of any principal of or
interest on the Debt Securities without the imposition of withholding tax, the
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Trustee shall
require the previous delivery of properly completed and signed applicable U.S. federal income
tax certifications (generally, an Internal Revenue Service Form W-9 (or applicable successor form)
in the case of a person that is a “United States person” within the meaning of Section 7701 (a)(30)
of the Code (under and as defined in the Declaration) or an Internal Revenue Service Form W-8 (or
applicable successor form) in the case of a person that is not a “United States person” within the
meaning of Section 7701(a)(30) of the Code, and any other certification acceptable to it to enable
the Trustee or any Paying Agent to determine their respective duties and liabilities with respect
to any taxes or other charges that they may be required to pay, deduct or withhold in respect of
such Debt Securities.
Section 2.14. Conversion of Debt Securities. Subject to and upon compliance with the
provisions of this Section, the Debt Securities are convertible into Common Stock of the Company.
In the event that holders of Capital Securities exercise the right to convert all or any portion of
the Capital Securities for Debt Securities, the Conversion Agent shall convert such Debt Securities
into shares of Common Stock in the manner described herein and subject to the following terms and
conditions:
(a) The Debt Securities are convertible solely on April 1, 2010 into fully paid,
validly issued and nonassessable shares of Common Stock pursuant to a Capital Securities
Holder’s direction to the Conversion Agent, subject to the terms of the Declaration, to
exchange all or a portion of the principal of Capital Securities held by such Capital
Securities Holder in accordance with the provisions of Section 2.14(b), for a portion of the
Debt Securities theretofore held by the Trust on the basis of one Trust Security per $1,000
principal amount of Debt Securities, and convert such amount of Debt Securities as promptly
as practicable thereafter (and in any event within two Business Days of the filing with the
Conversion Agent of the certificate required by Section 2.14(f) hereof) into fully paid and
nonassessable shares of Common Stock, equal to the aggregate face amount of Capital
Securities being exchanged divided by the Stock Price, as adjusted pursuant to this Section
2.14 (the “Conversion Price”). The Conversion Agent may conclusively rely upon the
determination of the Conversion Price by the Company.
(b) To convert all or a portion of the Debt Securities, a Capital Securities Holder
shall deliver to the Conversion Agent and to the Company a Conversion Request which shall
specify the requested date of conversion (which date must be April 1, 2010) (the “Conversion
Date”) which shall be delivered no later than the Business Day prior to the Conversion Date.
The conversion of Capital Securities to Debt Securities shall occur in accordance with the
terms of the Declaration and as promptly as practicable thereafter (and in any event within
two Business Days of the filing with the Conversion Agent of the certificate required by
Section 2.14(f) hereof), the Conversion Agent shall convert such Debt Securities, on behalf
of such Capital Securities Holder, into Common Stock based on Conversion Price. The
Conversion Agent shall notify the Institutional Trustee, on behalf of the Trust, of the
Capital Securities Holder’s election to exchange Capital Securities for a portion of the
Debt Securities held by the Trust, and the Institutional Trustee, on behalf of the Trust,
shall, as promptly as practicable upon the receipt of such notice (and in any event within
two Business Days of the filing with the Conversion Agent of the certificate required by
Section 2.14(f) hereof), deliver to the Conversion
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Agent the appropriate principal amount of Debt Securities for exchange in accordance
with this Section 2.14. So long as any Capital Securities are outstanding, the Trust shall
not convert any Debt Securities into shares of Common Stock except pursuant to a Conversion
Request delivered to the Conversion Agent by a holder of Capital Securities.
(i) Except as provided in Section 2.14(b)(ii) or (iii) below, a Capital
Securities Holder who converts Debt Securities on or prior to a record date shall be
entitled to receive, on the next Interest Payment Date, a payment equal to the
amount of all accrued and unpaid interest on such converted Debt Securities,
accruing through, but excluding, the date of such conversion.
(ii) Except as provided in Section 2.14(b)(iii) below with respect to
conversion of Debt Securities after a Redemption/Distribution Notice has been given,
if any Debt Securities are converted during an Extension Period, subject to and as
provided in the Declaration, a Capital Securities Holder may elect to (A) convert
all or any part of the accrued and unpaid interest on the converted Debt Securities
into shares of Common Stock on the Conversion Date in an amount equal to such
accrued and unpaid interest divided by the Conversion Price; provided, that such
election would not cause the Company to be in violation of applicable rules of the
NYSE; or (B) receive such accrued and unpaid interest on the converted Debt
Securities up to, but excluding the Conversion Date (including Deferred Interest
thereon, if any, to the extent permitted by applicable laws, rules or regulations)
on the Interest Payment Date upon which such Extension Period ends. In the event
that the Holder does not elect either clause (A) or (B) above in the Conversion
Request, the Holder shall be deemed to have elected clause (B).
(iii) If a Redemption/Distribution Notice is mailed or otherwise given to
Holders, then, if any Holder converts any Debt Securities on any date on or after
the date on which such Redemption/Distribution Notice is mailed or otherwise given,
such converting Holder shall be entitled to receive on the Conversion Date or as
promptly as practicable thereafter (and in any event within three Business Days of
the Conversion Date), all accrued and unpaid interest on such converted Debt
Securities (including Deferred Interest thereon, if any, to the extent permitted by
applicable laws, rules or regulations) through, but excluding, the date of such
conversion.
(iv) If any Debt Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Debt Security shall (subject to any right of the
Capital Securities Holder) be paid to the Company upon Company Request or, if then
held by the Company, shall be discharged from such trust.
(c) Subject to any right of the holder of such Debt Security or any Predecessor
Security to receive interest as provided in Section 2.14(b), the Company’s delivery upon
conversion of the fixed number of shares of Common Stock into which the Debt Securities and
accrued and unpaid interest, if applicable, are convertible (together with
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the cash payment, if any, in lieu of fractional shares) shall be deemed to satisfy the
Company’s obligation to pay the principal amount at maturity of the portion of Debt
Securities so converted and any unpaid interest (including Additional Interest, if any)
accrued on such Debt Securities from the time of such conversion, and such Debt Securities
shall be extinguished.
No fractional shares of Common Stock shall be issued as a result of conversion, but in
lieu thereof, the Company shall pay to the Conversion Agent a cash adjustment in an amount
equal to the same fraction of the Conversion Price, and the Conversion Agent in turn shall
make such payment, if any, to the Capital Securities Holder so converted.
In the event of the conversion of any Debt Security in part only, a new Debt Security
or Debt Securities for the unconverted portion thereof shall be issued in the name of the
Securityholder thereof upon the cancellation thereof in accordance with Section 2.05.
In effecting the conversion transactions described in this Section, the Conversion
Agent is acting as agent of the Capital Securities Holders (in the exchange of Capital
Securities for Debt Securities) and as agent of the Securityholders (in the conversion of
Debt Securities into Common Stock), as the case may be, directing it to effect such
conversion transactions. The Conversion Agent is hereby authorized (a) to exchange Capital
Securities for Debt Securities held by the Trust from time to time in connection with the
conversion of such Capital Securities in accordance with this Section 2.14, and (b) to
automatically convert all or a portion of the Debt Securities into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the provisions of this
Section 2.14 and the Declaration and to deliver to the Trust a new Debt Security or Debt
Securities for any resulting unconverted principal amount.
(d) The Conversion Price shall be subject to adjustment (without duplication) from time
to time as follows:
(i) While any of the Debt Securities are outstanding, in case the (A) the
Company shall pay a dividend or make a distribution with respect to its Common Stock
in shares of Common Stock; (B) the Company or any of its subsidiaries subdivides,
splits or combines its outstanding shares of Common Stock; (C) the Company or any of
its subsidiaries issues to all holders of the shares of Common Stock (and does not
make the equivalent issuance to the Holders of the Debt Securities) rights or
warrants (other than rights or warrants issued pursuant to a dividend reinvestment
plan or share purchase plan or other similar plans) entitling them, for a period of
up to 180 days (or any shorter period) from the date of issuance of such rights or
warrants, to subscribe for or purchase shares of Common Stock at less than the
Current Market Price on the date fixed for the determination of stockholders
entitled to receive such rights or warrants; or (D) the Company or any of its
subsidiaries successfully completes a tender or exchange offer for the Common Stock
(and does not make the equivalent offer to the Holders of the Debt Securities) where
the cash and the value of any other consideration included in the payment per share
of the Common Stock exceeds
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the Closing Price per share of the Common Stock on the Trading Day immediately
succeeding the expiration of the tender or exchange offer, then the Conversion Price
shall be equitably adjusted giving appropriate cumulative effect to the action or
actions set forth in (A) through (D) above as reasonably agreed by the Company and
the Holders of the Capital Securities on the Conversion Date in the manner described
in Section 2.14(f). An adjustment made pursuant to this Section 2.14(d)(i) shall
become effective on the Conversion Date; provided, however, that in the event that
such action described in (A) through (D) above is not effected, the Conversion Price
shall again be adjusted to be the Conversion Price which would then be in effect but
for such proposed transaction. If, as a result of an adjustment made pursuant to
this Section 2.14(d)(i), the holder of any Debt Security thereafter surrendered for
conversion shall become entitled to receive shares of two or more classes or series
of capital stock of the Company, the Board of Directors (whose determination shall
be conclusive and shall be described in a Board Resolution filed with the Trustee)
shall determine the allocation of the adjusted Conversion Price between or among
shares of such classes or series of capital stock.
(ii) To the extent that the Company has a rights plan in effect with respect to
the Common Stock on the Conversion Date, upon conversion of any of the Debt
Securities, Holders will receive, in addition to the shares of Common Stock, the
rights under the rights plan, unless, prior to the Conversion Date, the rights have
separated from the shares of Common Stock, in which case the Conversion Price will
be adjusted at the time of separation as if the Company had made a distribution to
all holders of the Common Stock as described in clause (i) above, subject to
readjustment in the event of the expiration, termination or redemption of such
rights.
(iii) The Company may make such decrease in the Conversion Price, in addition
to that required by Section 2.14(d)(i) and (ii), as it considers to be advisable to
avoid or diminish any income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.
(e) In the event that the Company shall be a party to any transaction, including,
without limitation, (i) recapitalization or reclassification of the Common Stock (other than
a change in par value), or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination of the Common Stock); or (ii) any
compulsory share exchange, in each case pursuant to which the Common Stock is converted into
the right to receive other securities, cash or other property, then lawful provision shall
be made as part of the terms of such transaction whereby the holder of each Debt Security
then outstanding shall have the right thereafter to convert each Debt Security only into the
kind and amount of securities, cash or other property, receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock of the Company into which
such Debt Security could have been converted immediately prior to such transaction.
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The Company or the Person formed by such consolidation or resulting from such merger or
which acquired such assets or which acquires the shares of the Company, as the case may be,
shall make provision in its certificate or articles of incorporation or other constituent
document to establish such right. Such certificate or articles of incorporation or other
constituent document shall provide for adjustments which, for events subsequent to the
effective date of such certificate or articles of incorporation or other constituent
document, shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 2.14. The above provisions shall similarly apply to successive
transactions of the foregoing type.
(f) On the Conversion Date, the Company shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Chairman of the Board, President, Chief Executive
Officer, Chief Financial Officer or Vice President of the Company and by its Chief Financial
Officer, Treasurer or an Assistant Treasurer of the Company setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such adjustment is
based (including, without limitation, describing the adjustments, if any, that were made
with respect to the Stock Price and all the components of that definition, and the facts
upon which such adjustments were based). Upon approval of such certificate by the Holders
of at least a majority in liquidation amount of the Capital Securities being converted, the
certificate shall forthwith be filed with the Trustee, the Conversion Agent and the transfer
agent for the Trust Securities and the Debt Securities and notice stating that the
Conversion Price has been adjusted and setting forth the adjusted Conversion Price shall as
soon as practicable be mailed by the Company to all record Trust Securities Holders and
Securityholders at their last addresses as they appear upon the stock transfer books of the
Company and the Trust.
(g) In case:
(i) the Company shall authorize a tender or exchange offer that would require
an adjustment pursuant to Section 2.14(d)(i);
(ii) of any reclassification of Common Stock (other than a subdivision or
combination of the outstanding Common Stock, or a change in par value, or from par
value to no par value, or from no par value to par value) or any compulsory share
exchange whereby the Common Stock is converted into other securities, cash or other
property; or
(iii) of the voluntary or involuntary dissolution, liquidation or winding up of
the Company;
then the Company shall (1) if any Trust Securities are outstanding, cause to be filed with
the transfer agent for the Trust Securities, and shall cause to be mailed to the Trust
Securities Holders, at their last addresses as they shall appear upon the Security Register
of the Trust; or (2) shall cause to be mailed to all Securityholders at their last addresses
as they shall appear in the Security Register, at least 15 days prior to the applicable
record or effective date hereinafter specified, a notice stating the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange, dissolution,
23
liquidation or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange their shares
of Common Stock for securities, cash or other property deliverable upon such
reclassification, transfer, share exchange, dissolution, liquidation or winding up (but no
failure to mail such notice or any defect therein or in the mailing thereof shall affect the
validity of the corporate action required to be specified in such notice).
(h) Notwithstanding anything to the contrary contained herein, the Conversion Price
shall not be adjusted:
(A) if Holders may participate in the transaction that would otherwise
give rise to an adjustment, as a result of holding the Debt Securities,
without having to convert the Debt Securities, as if they held the full
number of shares of Common Stock into which a Debt Security may then be
converted;
(B) upon the issuance of any shares of Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on the Company’s securities and the investment of
additional optional amounts in shares of Common Stock under any plan;
(C) upon the issuance of any shares of Common Stock or rights or
warrants to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed by
the Company or any of its subsidiaries;
(D) upon the issuance of any shares of Common Stock pursuant to any
employee benefit plan or program of the Company or any option, warrant,
right or exercisable, exchangeable or convertible security outstanding as of
the date the Debt Securities were first issued and not substantially amended
thereafter;
(E) for a change in the par value or no par value of Common Stock; or
(F) in the case of the issuance of any stock (or debentures convertible
into or exchangeable for stock) of the Company except as specifically
described in this Section 2.14.
(i) Neither the Trustee nor any Conversion Agent shall at any time be under any duty or
responsibility to any Securityholder to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor any
Conversion Agent shall be accountable with respect to the validity or value (or the kind of
account) of any shares of Common Stock or of any securities or property, which may at any
time be issued or delivered upon the conversion of any Debt Security; and neither the
Trustee nor any Conversion Agent makes any
24
representation with respect thereto. Neither the Trustee nor any Conversion Agent
shall be responsible for any failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of Common Stock or stock certificates or other securities or
property upon the surrender of any Debt Security for the purpose of conversion, or, except
as expressly herein provided, to comply with any of the covenants of the Company contained
in Article III or this Section 2.14.
(j) The Company shall at all times reserve and keep available out of its authorized and
unissued Common Stock, solely for issuance upon the conversion of the Debt Securities, free
from any preemptive or other similar rights, such number of such shares of Common Stock as
shall from time to time be issuable upon the conversion of all of the Debt Securities then
outstanding. Notwithstanding the foregoing, the Company shall be entitled to deliver, upon
conversion of Debt Securities, shares of Common Stock reacquired and held in the treasury of
the Company (in lieu of the issuance of authorized and unissued shares of Common Stock), so
long as any such treasury shares are free and clear of all liens, charges, security
interests or encumbrances. Any shares of Common Stock issued upon conversion of the Debt
Securities shall be duly authorized, validly issued, fully paid and nonassessable. Each of
the Company and the Trust shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as may be required by
law, and shall comply with all applicable requirements as to registration or qualification
of the Common Stock issuable upon conversion of Debt Securities (and all requirements to
list such Common Stock on any national securities exchange or quotation system that are at
the time applicable), to enable the Company lawfully to issue Common Stock to the
Securityholders upon such conversion.
(k) The Company shall pay any and all taxes that may be payable in respect of the
issuance or delivery of shares of Common Stock on conversion of Debt Securities. The
Company shall not, however, be required to pay any tax that may be payable in respect of any
transfer involved in the issuance and delivery of shares of Common Stock in a name other
than that in which the Capital Securities so converted were registered, and no such issue or
delivery shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax or has established to the satisfaction of the Company
that such tax has been paid.
(l) Nothing in the preceding Section 2.14(k) shall limit the requirement of the Company
to withhold taxes pursuant to the terms of the Debt Securities or as otherwise set forth in
this Indenture or otherwise require the Trustee or the Company to pay any amounts on account
of such withholding.
Section 2.15. Global Debt Securities. The Debt Securities will initially be issued in the
form of one or more definitive Debt Securities. Solely upon the election of the holder of
Outstanding Debt Securities, which election need not be in writing, the definitive Debt Securities
owned by such holder shall be exchanged for Debt Securities issued in the form of one or more
Global Debt Securities registered in the name of the Depositary or its nominee. Each Global
Debenture issued under this Indenture shall be registered in the name of the Depositary designated
by the Company for such Global Debt Security or a nominee thereof and delivered to
25
such Depositary or a nominee thereof or custodian therefor, and each such Global Debt Security
shall constitute a single Debt Security for all purposes of this Indenture. The Company agrees to
cause this Indenture to be amended to include the terms applicable to such Global Debt Securities
at the time of such election by the Securityholder.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
Section 3.01. Payment of Principal, Premium and Interest; Agreed Treatment of the Debt
Securities.
(a) The Company covenants and agrees that it will duly and punctually pay or cause to
be paid the principal of and premium, if any, and interest and any Additional Interest and
other payments on the Debt Securities at the place, at the respective times and in the
manner provided in this Indenture and the Debt Securities. At the option of the Company,
each installment of interest on the Debt Securities may be paid (i) by mailing checks for
such interest payable to the order of the Securityholders entitled thereto as they appear on
the Debt Security Register if a request for a wire transfer has not been received by the
Company; or (ii) by wire transfer to any account with a banking institution located in the
United States designated in writing by such Securityholders to the Paying Agent no later
than the related record date. Notwithstanding the foregoing, so long as the holder of any
Debt Security is the Institutional Trustee, the payment of the principal of and interest on
such Debt Security will be made in immediately available funds at such place and to such
account as may be designated by the Institutional Trustee.
(b) The Company and each of the Securityholders will treat the Debt Securities as
indebtedness, and the amounts, other than payments of principal, payable in respect of the
principal amount of such Debt Securities as interest, for all United States federal income
tax purposes. All payments in respect of such Debt Securities will be made free and clear
of United States withholding tax to any beneficial owner thereof that has provided (i) an
Internal Revenue Service Form W-9 or W-8BEN (or any substitute or successor form)
establishing its non-United States status for United States federal income tax purposes, and
establishing a complete exemption from U.S. withholding tax, or (ii) any other applicable
form establishing a complete exemption from U.S. withholding tax.
(c) As of the date of this Indenture, the Company represents that it has no present
intention to exercise its right under Section 2.11 to defer payments of interest on the Debt
Securities by commencing an Extension Period.
(d) As of the date of this Indenture, the Company represents that the likelihood that
it would exercise its right under Section 2.11 to defer payments of interest on the Debt
Securities by commencing an Extension Period at any time during which the Debt Securities
are outstanding is remote because of the restrictions that would be imposed on the Company’s
ability to declare or pay dividends or distributions on, or to redeem, purchase or make a
liquidation payment with respect to, any of its outstanding equity and on the Company’s
ability to make any payments of principal of or premium, if
26
any, or interest on, or repurchase or redeem, any of its debt securities that rank pari
passu in all respects with (or junior in interest to) the Debt Securities.
Section 3.02. Offices for Notices and Payments, Etc. So long as any of the Debt Securities
remain outstanding, the Company will maintain an office or agency where the Debt Securities may be
presented for payment, an office or agency where the Debt Securities may be presented for
registration of transfer and for exchange as provided in this Indenture and an office or agency
where notices and demands to or upon the Company in respect of the Debt Securities or of this
Indenture may be served. The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until otherwise designated from
time to time by the Company in a notice to the Trustee, or specified as contemplated by
Section 2.05, such office or agency for all of the above purposes shall be the office or agency of
the Trustee at the address set forth in Section 14.04. In case the Company shall fail to maintain
any such office or agency, or shall fail to give such notice of the location or of any change in
the location thereof, presentations and demands may be made and notices may be served at the
Principal Office of the Trustee.
In addition to any such office or agency, the Company may from time to time designate one or
more other offices or agencies where the Debt Securities may be presented for registration of
transfer and for exchange in the manner provided in this Indenture, and the Company may from time
to time rescind such designation, as the Company may deem desirable or expedient; provided,
however, that no such designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency for the purposes above mentioned. The Company
will give to the Trustee prompt written notice of any such designation or rescission thereof.
Section 3.03. Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever
necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided
in Section 6.09, a Trustee, so that there shall at all times be a Trustee hereunder.
Section 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a Paying Agent other than the Trustee, it will cause
such Paying Agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provision of this Section 3.04:
(i) that it will hold all sums held by it as such agent for the payment of the
principal of and premium, if any, or interest, if any, on the Debt Securities
(whether such sums have been paid to it by the Company or by any other obligor on
the Debt Securities) in trust for the benefit of the Securityholders;
(ii) that it will give the Trustee prompt written notice of any failure by the
Company (or by any other obligor on the Debt Securities) to make any payment of the
principal of and premium, if any, or interest, if any, on the Debt Securities when
the same shall be due and payable; and
27
(iii) that it will, at any time during the continuance of any Event of Default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
(b) If the Company shall act as its own Paying Agent, it will, on or before each due
date of the principal of and premium, if any, or interest, or other payments due, if any, on
the Debt Securities, set aside, segregate and hold in trust for the benefit of the
Securityholders a sum sufficient to pay such principal, premium, interest or other payments
so becoming due and will notify the Trustee in writing of any failure to take such action
and of any failure by the Company (or by any other obligor under the Debt Securities) to
make any payment of the principal of and premium, if any, or interest or other payments, if
any, on the Debt Securities when the same shall become due and payable.
Whenever the Company shall have one or more Paying Agents for the Debt Securities, it
will, on or prior to each due date of the principal of and premium, if any, or interest, if
any, on the Debt Securities, deposit with a Paying Agent a sum sufficient to pay the
principal, premium, interest, or other payments so becoming due, such sum to be held in
trust for the benefit of the Persons entitled thereto and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee in writing of its action or failure
to act.
(c) Anything in this Section 3.04 to the contrary notwithstanding, the Company may, at
any time, for the purpose of obtaining a satisfaction and discharge with respect to the Debt
Securities, or for any other reason, pay, or direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or any such Paying Agent, such sums to be held by the
Trustee upon the same terms and conditions herein contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding, the agreement to
hold sums in trust as provided in this Section 3.04 is subject to Sections 12.03 and 12.04.
(e) The Company hereby initially appoints the Trustee to act as Paying Agent (the
“Paying Agent”).
Section 3.05. Certificate to Trustee. The Company will deliver to the Trustee on or before
120 days after the end of each fiscal year, so long as Debt Securities are outstanding hereunder, a
Certificate stating that in the course of the performance by the signers of their duties as
officers of the Company they would normally have knowledge of any default by the Company in the
performance of any covenants of the Company contained herein, stating whether or not they have
knowledge of any such default and, if so, specifying each such default of which the signers have
knowledge and the nature and status thereof. A form of such Certificate is attached hereto as
Exhibit B.
Section 3.06. Additional Interest. If and for so long as the Trust is the holder of all Debt
Securities and the Trust is subject to or otherwise required to pay, or is required to withhold
from distributions to holders of Trust Securities, any additional taxes (including withholding
28
taxes), duties, assessments, or other governmental charges as a result of a Tax Event, the
Company will pay such additional amounts (“Additional Interest”) on the Debt Securities as shall be
required so that the net amounts received and retained by the Trust for distribution to holders of
Trust Securities after paying all taxes (including withholding taxes), duties, assessments, or
other governmental charges will be equal to the amounts the Trust would have received and retained
for distribution to holders of Trust Securities after paying all taxes (including withholding taxes
on distributions to holders of Trust Securities), duties, assessments or other governmental charges
if no such additional taxes, duties, assessments, or other governmental charges had been imposed.
Whenever in this Indenture or the Debt Securities there is a reference in any context to the
payment of principal of, or premium, if any, or interest on the Debt Securities, such mention shall
be deemed to include mention of payments of the Additional Interest provided for in this Section to
the extent that, in such context, Additional Interest is, was or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the payment of Additional
Interest (if applicable) in any provisions hereof shall not be construed as excluding Additional
Interest in those provisions hereof where such express mention is not made; provided, however, that
notwithstanding anything to the contrary contained in this Indenture or any Debt Security, the
deferral of the payment of interest during an Extension Period pursuant to Section 2.11 shall not
defer the payment of any Additional Interest that may be due and payable.
Section 3.07. Compliance With Consolidation Provisions. The Company will not, while any of
the Debt Securities remain outstanding, consolidate with, or merge into any other Person, or merge
into itself, or sell, convey, transfer or otherwise dispose of all or substantially all of its
property or capital stock to any other Person unless the provisions of Article XI hereof are
complied with.
Section 3.08. Limitation on Dividends. If Debt Securities are initially issued to the Trust
or a trustee of such Trust in connection with the issuance of Trust Securities by the Trust
(regardless of whether Debt Securities continue to be held by such Trust) and (a) there shall have
occurred and be continuing an Event of Default; (b) the Company shall be in default with respect to
its payment of any obligations under the Capital Securities Guarantee; or (c) the Company shall
have given notice of its election to defer payments of interest on the Debt Securities by extending
the Payment Period as provided herein and such period, or any extension thereof, shall be
continuing, then the Company shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company’s
capital stock; or (ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects
with or junior in interest to the Debt Securities or (iii) make any payment under any guarantees of
the Company that rank pari passu in all respects with or junior in interest to the Capital
Securities Guarantee (other than (A) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company (I) in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers, directors or
consultants, (II) in connection with a dividend reinvestment or stockholder stock purchase plan or
(III) in connection with the issuance of capital stock of the Company (or securities convertible
into or exercisable for such capital stock), as consideration in an acquisition transaction entered
into prior to the occurrence of (i), (ii) or (iii) above, (B) as a result of any exchange,
reclassification, combination or conversion of any class or series of the Company’s capital stock
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(or any capital stock of a subsidiary of the Company) for any class or series of the Company’s
capital stock or of any class or series of the Company’s indebtedness for any class or series of
the Company’s capital stock, (C) the purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (D) any declaration of a dividend in connection with any
stockholder’s rights plan, or the issuance of rights, stock or other property under any
stockholder’s rights plan, or the redemption or repurchase of rights pursuant thereto, or (E) any
dividend in the form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such stock and any cash
payments in lieu of fractional shares issued in connection therewith; or (F) payments under the
Capital Securities Guarantee).
Section 3.09. Covenants as to the Trust. For so long as the Trust Securities remain
outstanding, the Company shall maintain 100% ownership of the Common Securities; provided, however,
that any permitted successor of the Company under this Indenture that is a U.S. Person may succeed
to the Company’s ownership of such Common Securities. The Company, as owner of the Common
Securities, shall use commercially reasonable efforts to except in connection with a distribution
of Debt Securities to the holders of Trust Securities in liquidation of the Trust, the redemption
of all of the Trust Securities or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration, cause the Trust (a) to remain a statutory trust, (b) to otherwise
continue to be classified as a grantor trust for United States federal income tax purposes, and (c)
to cause each holder of Trust Securities to be treated as owning an undivided beneficial interest
in the Debt Securities.
ARTICLE IV
SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE
TRUSTEE
Section 4.01. Securityholders’ Lists. The Company covenants and agrees that it will furnish
or cause to be furnished to the Trustee:
(a) on each regular record date for the Debt Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Securityholders as of such
record date; and
(b) at such other times as the Trustee may request in writing, within 30 days after the
receipt by the Company 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;
except that no such lists need be furnished under this Section 4.01 so long as the Trustee is in
possession thereof by reason of its acting as Debt Security Registrar.
Section 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the Securityholders (1)
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contained in the most recent list furnished to it as provided in Section 4.01, or (2)
received by it in the capacity of Debt Security Registrar (if so acting) hereunder. The
Trustee may destroy any list furnished to it as provided in Section 4.01 upon receipt of a
new list so furnished.
(b) In case three or more Securityholders (hereinafter referred to as “applicants”)
apply in writing to the Trustee and furnish to the Trustee reasonable proof that each such
applicant has owned a Debt Security for a period of at least six months preceding the date
of such application, and such application states that the applicants desire to communicate
with other Securityholders with respect to their rights under this Indenture or under such
Debt Securities and is accompanied by a copy of the form of proxy or other communication
which such applicants propose to transmit, then the Trustee shall within five Business Days
after the receipt of such application, at the election of the Company, either:
(i) afford such applicants access to the information preserved at the time by
the Trustee in accordance with the provisions of Section 4.02(a) above; or
(ii) inform such applicants as to the approximate number of Securityholders
whose names and addresses appear in the information preserved at the time by the
Trustee in accordance with the provisions of Section 4.02(a) above, and as to the
approximate cost of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Company shall elect not to afford such applicants access to such information,
the Trustee shall, upon the written request of such applicants, mail to each Securityholder
whose name and address appear in the information preserved at the time by the Trustee in
accordance with the provisions of Section 4.02(a) above, a copy of the form of proxy or
other communication which is specified in such request with reasonable promptness after a
tender to the Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless within five days after such tender,
the Trustee shall mail to such applicants and file with the Securities and Exchange
Commission, if permitted or required by applicable law, together with a copy of the material
to be mailed, a written statement of the Company to the effect that such mailing would be
contrary to the best interests of the holders of all Debt Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall specify the basis of
such opinion. If said Commission, as permitted or required by applicable law, after
opportunity for a hearing upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, said Commission shall find, after notice
and opportunity for hearing, that all the objections so sustained have been met and shall
enter an order so declaring, the Trustee shall mail copies of such material to all such
Securityholders with reasonable promptness after the entry of such order and the renewal of
such tender; otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
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(c) Each and every Securityholder, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any Paying Agent shall
be held accountable by reason of the disclosure of any such information as to the names and
addresses of the Securityholders in accordance with the provisions of Section 4.02(b) above,
regardless of the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request made under
said Section 4.02(b) above.
Section 4.03. Financial and Other Information. The Company shall deliver to each
Securityholder (1) each Report on Form 10-K and Form 10-Q prepared by the Company and filed with
the Securities and Exchange Commission in accordance with the Exchange Act within 7 days after the
filing thereof, (2) if the Company is not then (y) subject to Section 13 or 15(d) of the Exchange
Act or (z) exempt from reporting pursuant to Rule 12g3-2(b) thereunder, the Company shall be
required to provide within 45 days of the end of each calendar quarterly period and 90 days after
the end of each calendar year, the information required to be provided by Rule 144A(d)(4) under the
Securities Act and (3) within 30 days after the end of the fiscal year of the Company, Form 1099 or
such other annual U.S. federal income tax information statement required by the Code containing
such information with regard to the Debt Securities held by such Securityholder as is required by
the Code and the income tax regulations of the U.S. Treasury thereunder.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF
DEFAULT
DEFAULT
Section 5.01. Events of Default. “Event of Default,” wherever used herein, 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):
(a) the Company defaults in the payment of any interest upon any Debt Security when it
becomes due and payable (unless the Company has elected and may defer interest payments
pursuant to Section 2.11), and continuance of such default for a period of 30 days; for the
avoidance of doubt, an extension of any Payment Period by the Company in accordance with
Section 2.11 of this Indenture shall not constitute a default under this clause 5.01(a); or
(b) the Company defaults in the payment of all or any part of the principal of (or
premium, if any, on) any Debt Securities as and when the same shall become due and payable
either at maturity, upon redemption, by declaration of acceleration or otherwise; or
(c) the Company defaults in the payment of any interest upon any Debt Security when it
becomes due and payable following the nonpayment of any such interest for 20 or more
consecutive quarterly periods; or
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(d) the Company defaults in the performance of, or breaches, any of its covenants or
agreements in Sections 3.06, 3.07, 3.08 or 3.09 of this Indenture (other than a covenant or
agreement a default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the holders of at least 25% in aggregate principal
amount of the outstanding Debt 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
(e) a court of competent jurisdiction shall enter a decree or order for relief in
respect of the Company in an involuntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Company
or for any substantial part of its property, or ordering the winding-up or liquidation of
its affairs and such decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(f) the Company shall commence a voluntary case under any applicable bankruptcy,
insolvency, reorganization, or other similar law now or hereafter in effect, shall consent
to the entry of an order for relief in an involuntary case under any such law, or shall
consent to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Company or of any
substantial part of its property, or shall make any general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due; or
(g) the Trust shall have voluntarily or involuntarily liquidated, dissolved, wound-up
its business or otherwise terminated its existence except in connection with (i) the
distribution of the Debt Securities to holders of the Trust Securities in liquidation of
their interests in the Trust; (ii) the redemption of all of the outstanding Trust
Securities; or (iii) certain mergers, consolidations or amalgamations, each as permitted by
the Declaration.
If an Event of Default specified under clause (c) of this Section 5.01 occurs and is
continuing with respect to the Debt Securities, then, and in each and every such case, unless the
principal of the Debt Securities shall have already become due and payable, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the Debt Securities then
outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal of the Debt Securities and any premium and
interest accrued, but unpaid, thereon, if any, to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable. If an Event of Default specified
under clause (e), (f) or (g) of this Section 5.01 occurs and is continuing with respect to the Debt
Securities, then, and in each and every such case, the entire principal amount of the Debt
Securities and any premium and interest accrued, but unpaid, thereon shall ipso facto become
immediately due and payable without further action. Notwithstanding anything to the contrary in
this Section 5.01, if at any time during the period in which this Indenture remains in force and
effect, the Company ceases or elects to cease to be subject to the supervision and
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regulations of the Federal Reserve, OTS, OCC or similar regulatory authority overseeing bank,
thrift, savings and loan or financial holding companies or similar institutions requiring
specifications for the treatment of capital similar in nature to the capital adequacy guidelines
under the Federal Reserve rules and regulations, then the first sentence of this paragraph shall be
deemed to include clauses (a), (b) and (d) under this Section 5.01 as an Event of Default resulting
in an acceleration of payment of the Debt Securities to the same extent as provided herein for
clause (c).
With respect to clause (d) of this Section 5.01, the Company agrees that in the event of a
breach by the Company of its covenants or agreements mentioned therein, any remedy at law or in
damages may prove inadequate and therefore the Company agrees that the Trustee shall be entitled to
injunctive relief against the Company in the event of any breach or threatened breach by the
Company, in addition to any other relief (including damages) available to the Trustee under this
Indenture or under law.
The foregoing provisions, however, are subject to the condition that if, at any time after the
principal of the Debt Securities shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, (a) the Company shall pay or shall deposit with the Trustee a sum sufficient
to pay all matured installments of interest upon all the Debt Securities and the principal of and
premium, if any, on the Debt Securities which shall have become due otherwise than by acceleration
(with interest upon all such payments and Deferred Interest, to the extent permitted by law) and
such amount as shall be sufficient to cover reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and counsel, and all other amounts due to
the Trustee pursuant to Section 6.06, if any; and (b) all Events of Default under this Indenture,
other than the non-payment of the principal of or premium, if any and interest on Debt Securities
which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as
provided herein; then and in each and every such case the holders of a majority in aggregate
principal amount of the Debt Securities then outstanding, by written notice to the Company and to
the Trustee, may waive all defaults and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect any subsequent
default or shall impair any right consequent thereon; provided, however, that if the Debt
Securities are held by the Trust or a trustee of the Trust, such waiver or rescission and annulment
shall not be effective until the holders of a majority in aggregate liquidation amount of the
outstanding Capital Securities of the Trust shall have consented to such waiver or rescission and
annulment.
In case the Trustee shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission or annulment or
for any other reason or shall have been determined adversely to the Trustee, then and in every such
case the Company, the Trustee and the Securityholders shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of the Company, the
Trustee and the Securityholders shall continue as though no such proceeding had been taken.
Section 5.02. Payment of Debt Securities on Default; Suit Therefor. The Company covenants
that upon the occurrence of an Event of Default pursuant to paragraphs (c), (e), (f) or
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(g) of Section 5.01, and upon demand of the Trustee, the Company will pay to the Trustee, for
the benefit of the Securityholders, the whole amount that then shall have become due and payable on
all Debt Securities including Deferred Interest accrued on the Debt Securities (to the extent that
payment of such interest is enforceable under applicable law and, if the Debt Securities are held
by the Trust or a trustee of such Trust, without duplication of any other amounts paid by the Trust
or a trustee in respect thereof); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a reasonable compensation to
the Trustee, its agents, attorneys and counsel, and any other amounts due to the Trustee under
Section 6.06. In case the Company shall fail forthwith to pay such amounts upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to
institute any actions or proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or any other obligor on such Debt
Securities and collect in the manner provided by law out of the property of the Company or any
other obligor on such Debt Securities wherever situated the moneys adjudged or decreed to be
payable.
In case there shall be pending proceedings for the bankruptcy or for the reorganization of the
Company or any other obligor on the Debt Securities under Bankruptcy Law, or in case a receiver or
trustee shall have been appointed for the property of the Company or such other obligor, or in the
case of any other similar judicial proceedings relative to the Company or other obligor upon the
Debt Securities, or to the creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Debt Securities shall then be due and payable as
therein expressed or by declaration of acceleration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section 5.02, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of principal and interest
owing and unpaid in respect of the Debt Securities;
(b) in case of any judicial proceedings, to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all
other amounts due to the Trustee under Section 6.06), and of the Securityholders allowed in
such judicial proceedings relative to the Company or any other obligor on the Debt
Securities, or to the creditors or property of the Company or such other obligor, unless
prohibited by applicable law and regulations, to vote on behalf of the Securityholders in
any election of a trustee or a standby trustee in arrangement, reorganization, liquidation
or other bankruptcy or insolvency proceedings or Person performing similar functions in
comparable proceedings;
(c) to collect and receive any moneys or other property payable or deliverable on any
such claims; and
(d) to distribute the same after the deduction of its charges and expenses.
35
Any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each
of the Securityholders to make such payments to the Trustee, and, in the event that the Trustee
shall consent to the making of such payments directly to the Securityholders, to pay to the Trustee
such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and all other amounts due
to the Trustee under Section 6.06 hereof.
Nothing herein contained shall be construed to authorize the Trustee to authorize or consent
to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Debt Securities or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under any of the Debt
Securities, may be enforced by the Trustee without the possession of any of the Debt Securities, or
the production thereof at any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment shall be for the ratable benefit of the Securityholders.
In any proceedings brought by the Trustee (and also any proceedings involving the
interpretation of any provision of this Indenture to which the Trustee shall be a party), the
Trustee shall be held to represent all the Securityholders, and it shall not be necessary to make
any Securityholders parties to any such proceedings.
Section 5.03. Application of Moneys Collected by Trustee. Any moneys collected by the
Trustee or otherwise distributed pursuant to this Article V shall be applied in the following
order, at the date or dates specified pursuant hereto for the payment of such moneys, upon
presentation of the several Debt Securities in respect of which moneys have been collected, and
stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST, to the payment of costs and expenses incurred by, and reasonable fees of, the
Trustee, its agents, attorneys and counsel, and of all other amounts due to the Trustee
under Section 6.06;
SECOND, to the payment of all Senior Indebtedness of the Company if and to the extent
required by Article XV;
THIRD, to the payment of the amounts then due and unpaid upon Debt Securities for
principal (and premium, if any), and interest on the Debt Securities, in respect of which or
for the benefit of which money has been collected, ratably, without preference or priority
of any kind, according to the amounts due on such Debt Securities; and
FOURTH, the balance, if any, to the Company.
Section 5.04. Proceedings by Securityholders. No Securityholder shall have any right to
institute any suit, action or proceeding for any remedy hereunder, unless such Securityholder
previously shall have given to the Trustee written notice of an Event of Default with respect to
the Debt Securities and unless the holders of not less than 25% in aggregate principal amount of
36
the Debt Securities then outstanding shall have given the Trustee a written request to
institute such action, suit or proceeding and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be incurred thereby, and
the Trustee for 60 days after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding; provided, that no Securityholder shall
have any right to prejudice the rights of any other Securityholder, obtain priority or preference
over any other such Securityholder or enforce any right under this Indenture except in the manner
herein provided and for the equal, ratable and common benefit of all Securityholders.
Notwithstanding any other provisions in this Indenture, however, the right of any
Securityholder to receive payment of the principal of, premium, if any, and interest, on such Debt
Security when due, or to institute suit for the enforcement of any such payment, shall not be
impaired or affected without the consent of such Securityholder. For the protection and
enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 5.05. Proceedings by Trustee. In case of an Event of Default hereunder the Trustee
may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to
enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.
Section 5.06. Remedies Cumulative and Continuing; Delay or Omission Not a Waiver. Except as
otherwise provided in Section 2.06, all powers and remedies given by this Article V to the Trustee
or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any other powers and remedies available to the Trustee or the Securityholders, by
judicial proceedings or otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture or otherwise established with respect to the Debt
Securities, and no delay or omission of the Trustee or of any Securityholder to exercise any right,
remedy or power accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right, remedy or power, or shall be construed to be a waiver of any such default or
an acquiescence therein; and, subject to the provisions of Section 5.04, every power and remedy
given by this Article V or by law to the Trustee or to the Securityholders may be exercised from
time to time, and as often as shall be deemed expedient, by the Trustee (in accordance with its
duties under Section 6.01) or by the Securityholders.
Section 5.07. Direction of Proceedings and Waiver of Defaults by Majority of Securityholders.
The holders of a majority in aggregate principal amount of the Debt Securities affected (voting as
one class) at the time outstanding and, if the Debt Securities are held by the Trust or a trustee
of the Trust, the holders of a majority in aggregate liquidation amount of the outstanding Capital
Securities of the Trust shall have the right to direct the time, method, and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee with respect to such Debt Securities; provided, however,
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that if the Debt Securities are held by the Trust or a trustee of the Trust, such time, method
and place or such exercise, as the case may be, may not be so directed until the holders of a
majority in aggregate liquidation amount of the outstanding Capital Securities of the Trust shall
have directed such time, method and place or such exercise, as the case may be; provided, further,
however, that (subject to the provisions of Section 6.01) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine that the action so directed
would be unjustly prejudicial to the holders not taking part in such direction or if the Trustee
being advised by counsel determines that the action or proceeding so directed may not lawfully be
taken or if a Responsible Officer of the Trustee shall determine that the action or proceedings so
directed would involve the Trustee in personal liability.
Prior to any declaration of acceleration, or ipso facto acceleration, of the maturity of the
Debt Securities, the holders of a majority in aggregate principal amount of the Debt Securities at
the time outstanding may on behalf of the holders of all of the Debt Securities waive (or modify
any previously granted waiver of) any past default or Event of Default, and its consequences,
except a default (a) in the payment of principal of, premium, if any, or interest on any of the
Debt Securities; (b) in respect of covenants or provisions hereof which cannot be modified or
amended without the consent of the Securityholder affected; or (c) in respect of the covenants
contained in Section 3.09; provided, however, that if the Debt Securities are held by the Trust or
a trustee of the Trust, such waiver or modification to such waiver shall not be effective until the
holders of a majority in Liquidation Amount of the Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver; provided, further, that if the consent of
the holder of each outstanding Debt Security is required, such waiver or modification to such
waiver shall not be effective until each holder of the outstanding Capital Securities of the Trust
shall have consented to such waiver or modification to such waiver. Upon any such waiver or
modification to such waiver, the Default or Event of Default covered thereby shall be deemed to be
cured for all purposes of this Indenture and the Company, the Trustee and the Securityholders shall
be restored to their former positions and rights hereunder, respectively; but no such waiver or
modification to such waiver shall extend to any subsequent or other Default or Event of Default or
impair any right consequent thereon. Whenever any Default or Event of Default hereunder shall have
been waived as permitted by this Section, said Default or Event of Default shall for all purposes
of the Debt Securities and this Indenture be deemed to have been cured and to be not continuing.
Section 5.08. Notice of Defaults. The Trustee shall, within 30 days after the actual
knowledge (through written notice or otherwise) by a Responsible Officer of the Trustee of the
occurrence of a Default with respect to the Debt Securities, mail to all Securityholders, as the
names and addresses of such Securityholders appear upon the Debt Security Register, notice of all
Defaults with respect to the Debt Securities known to the Trustee, unless such defaults shall have
been cured before the giving of such notice (the term “defaults” for the purpose of this Section
5.08 being hereby defined to be the events specified in Sections 5.01(a), (b), (c), (d), (e), (f)
and (g) including periods of grace, if any, provided for therein); provided, however, that, except
in the case of default in the payment of the principal of, premium, if any, or interest on any of
the Debt Securities, the Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Trustee in good faith determines that the withholding of such notice is
in the interests of the Securityholders.
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Section 5.09. Undertaking To Pay Costs. All parties to this Indenture agree, and each
Securityholder by such Securityholder’s acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or omitted by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; provided, however,
that the provisions of this Section 5.09 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Securityholder, or group of Securityholders, holding in the aggregate
more than 10% in principal amount of the Debt Securities (or, if such Debt Securities are held by
the Trust or a trustee of the Trust, more than 10% in liquidation amount of the outstanding Capital
Securities), to any suit instituted by any Securityholder for the enforcement of the payment of the
principal of, or premium, if any, or interest on any Debt Security against the Company on or after
the same shall have become due and payable, or to any suit instituted in accordance with Section
14.12.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.01. Duties and Responsibilities of Trustee. With respect to the Securityholders
issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the
Debt Securities and after the curing or waiving of all Events of Default which may have occurred,
with respect to the Debt Securities, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee. In case an Event of Default with respect to the Debt Securities has
occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the conduct of such person’s
own affairs.
No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own willful misconduct, except
that:
(a) prior to the occurrence of an Event of Default with respect to the Debt Securities
and after the curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee with respect to the Debt
Securities shall be determined solely by the express provisions of this Indenture,
and the Trustee shall not be liable except for the performance of such duties and
obligations with respect to the Debt Securities as are specifically set forth in
this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
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(ii) in the absence of bad faith on the part of the Trustee, the 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
Trustee and conforming to the requirements of this Indenture; but, in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(c) the 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 Securityholders pursuant
to Section 5.07, relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture;
(d) the Trustee shall not be charged with knowledge of any Default or Event of Default
with respect to the Debt Securities unless either (1) a Responsible Officer shall have
actual knowledge of such Default or Event of Default or (2) written notice of such Default
or Event of Default shall have been given to the Trustee by the Company or any other obligor
on the Debt Securities or by any Securityholder, except with respect to an Event of Default
pursuant to Sections 5.01(a), 5.01(b) or 5.01(c) hereof (other than an Event of Default
resulting from the default in the payment of Additional Interest or premium, if any, if the
Trustee does not have actual knowledge or written notice that such payment is due and
payable), of which the Trustee shall be deemed to have knowledge; and
(e) in the absence of bad faith on the part of the Trustee, the Trustee may seek and
rely on reasonable instructions from the Company.
None of the provisions contained in this Indenture shall require the 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 there is ground for believing that the
repayment of such funds or liability is not assured to it under the terms of this Indenture or
indemnity satisfactory to the Trustee against such risk is not reasonably assured to it.
Any of the rights, protections and indemnities that the Trustee is entitled to under this
Indenture shall extend to the Trustee in each other role as the Trustee may serve hereunder.
Section 6.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section
6.01:
(a) the 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, consent, order, bond, note, debenture, or other paper or document
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believed by it in good faith to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an Officers’ Certificate (unless other evidence in respect thereof
be herein specifically prescribed); and any Board Resolution may be evidenced to the Trustee
by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any advice or Opinion of
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 accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders
shall have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it in good faith
and reasonably believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default with respect to the
Debt Securities (that has not been cured or waived) to exercise with respect to the Debt
Securities such of the rights and powers vested in it by this Indenture, and to use the same
degree of care and skill in their exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs;
(f) the 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, coupon, or other paper or document,
unless requested in writing to do so by the holders of not less than a majority in aggregate
principal amount of the outstanding Debt Securities affected thereby; provided, however,
that if the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it
by the terms of this Indenture, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding; and
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents (including any Authenticating Agent) or
attorneys, and the Trustee shall not be responsible for any misconduct or negligence on the
part of any such agent or attorney appointed by it with due care.
Section 6.03. No Responsibility for Recitals, Etc. The recitals contained herein and in the
Debt Securities (except in the certificate of authentication of the Trustee or the
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Authenticating Agent) shall be taken as the statements of the Company, and the Trustee and the
Authenticating Agent assume no responsibility for the correctness of the same. The Trustee and the
Authenticating Agent make no representations as to the validity or sufficiency of this Indenture or
of the Debt Securities. The Trustee and the Authenticating Agent shall not be accountable for the
use or application by the Company of any Debt Securities or the proceeds of any Debt Securities
authenticated and delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.
Section 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents or Registrar May
Own Debt Securities. The Trustee or any Authenticating Agent or any Paying Agent or any transfer
agent or any Debt Security Registrar, in its individual or any other capacity, may become the owner
or pledgee of Debt Securities and may otherwise deal with the Company or an affiliate of the
Company with the same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, transfer agent or Debt Security Registrar.
Section 6.05. Moneys To Be Held in Trust. Subject to the provisions of Section 12.04, all
moneys received by the Trustee or any Paying Agent shall, until used or applied as herein provided,
be held in trust for the purpose for which they were received, but need not be segregated from
other funds except to the extent required by law. The Trustee and any Paying Agent shall be under
no liability for interest on any money received by it hereunder except as otherwise agreed in
writing with the Company. So long as no Event of Default shall have occurred and be continuing,
all interest allowed on any such moneys, if any, shall be paid from time to time to the Company
upon the written order of the Company, signed by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, the Chief Financial Officer, the Chief Operating Officer, a Vice
President, the Treasurer or an Assistant Treasurer of the Company.
Section 6.06. Compensation and Expenses of Trustee. The Company covenants and agrees to pay
from time to time, and the Trustee shall be entitled to, such compensation as shall be agreed to in
writing between the Company (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) and the Company further covenants and
agrees to pay or reimburse the Trustee upon its written request for all documented reasonable
expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its counsel and of all Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence, willful misconduct or bad faith.
For purposes of clarification, this Section 6.06 does not contemplate the payment by the Company
of acceptance or annual administration fees owing to the Trustee pursuant to the services to be
provided by the Trustee under this Indenture or the fees and expenses of the Trustee’s counsel in
connection with the closing of the transactions contemplated by this Indenture. The Company also
covenants to indemnify each of the Trustee or any predecessor Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any and all loss, damage, claim,
liability or expense including taxes (other than taxes based on the income of the Trustee) incurred
without negligence, willful misconduct or bad faith on the part of the Trustee and arising out of
or in connection with the acceptance or administration of this Trust, including the costs and
expenses of defending itself against any claim of liability. The obligations of the Company under
this Section 6.06 to
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compensate and indemnify the Trustee and to pay or reimburse the Trustee for documented
expenses, disbursements and advances shall constitute additional indebtedness hereunder. Such
additional indebtedness shall be secured by a lien prior to that of the Debt Securities upon all
property and funds held or collected by the Trustee as such, except funds held in trust for the
benefit of the holders of particular Debt Securities.
Without prejudice to any other rights available to the Trustee under applicable law, when the
Trustee incurs expenses or renders services in connection with an Event of Default specified in
Section 5.01(e), (f) or (g), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the resignation or removal of the Trustee and the
defeasance or other termination of this Indenture.
Notwithstanding anything in this Indenture or any Debt Security to the contrary, the Trustee
shall have no obligation whatsoever to advance funds to pay any principal of or interest on or
other amounts with respect to the Debt Securities or otherwise advance funds to or on behalf of the
Company.
Section 6.07. Officers’ Certificate as Evidence. Except as otherwise provided in
Sections 6.01 and 6.02, whenever in the administration of the provisions of this Indenture the
Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking
or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence, willful misconduct or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an Officers’
Certificate delivered to the Trustee, and such certificate, in the absence of negligence, willful
misconduct or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any
action taken or omitted by it under the provisions of this Indenture upon the faith thereof.
Section 6.08. Eligibility of Trustee. The Trustee hereunder shall at all times be a U.S.
Person that is a corporation, trust company or national banking association organized and doing
business under the laws of the United States of America or any state or territory thereof or of the
District of Columbia or a corporation or other Person authorized under such laws to exercise
corporate trust powers, having (or whose obligations under this Indenture are guaranteed by an
affiliate having) a combined capital and surplus of at least $50,000,000 U.S. and subject to
supervision or examination by federal, state, territorial or District of Columbia authority. If
such corporation, trust company or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.08 the combined capital and surplus of such
corporation, trust company or national banking association shall be deemed to be its combined
capital and surplus as set forth in its most recent records of condition so published.
The Company may not, nor may any Person directly or indirectly controlling, controlled by, or
under common control with the Company, serve as Trustee, notwithstanding that such corporation,
trust company or national banking association shall be otherwise eligible and qualified under this
Article.
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In case at any time the Trustee shall cease to be eligible in accordance with the provisions
of this Section 6.08, the Trustee shall resign immediately in the manner and with the effect
specified in Section 6.09.
If the Trustee has or shall acquire any “conflicting interest” within the meaning of § 310(b)
of the Trust Indenture Act of 1939, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to this Indenture.
Section 6.09. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign
by giving written notice of such resignation to the Company and by mailing notice thereof,
at the Company’s expense, to the Securityholders at their addresses as they shall appear on
the Debt Security Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument, in duplicate, executed by order
of its Board of Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor Trustee. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the mailing of such notice of
resignation to the affected Securityholders, the resigning Trustee, at the expense of the
Company, may petition any court of competent jurisdiction for the appointment of a successor
Trustee, or any Securityholder who has been a bona fide holder of a Debt Security or Debt
Securities for at least six months may, subject to the provisions of Section 5.09, on behalf
of himself or herself and all others similarly situated, petition any such court for the
appointment of a successor Trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, appoint a successor Trustee. Any resignation of the
Trustee shall be deemed to be a resignation as the Paying Agent and as Debt Security
Registrar if the Trustee was servicing in such capacities prior to such resignation.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section 6.08 after
written request therefor by the Company or by any Securityholder who has been a bona
fide holder of a Debt Security or Debt Securities for at least six months;
(ii) the Trustee shall cease to be eligible in accordance with the provisions
of Section 6.08 and shall fail to resign after written request therefor by the
Company or by any such Securityholder; or
(iii) the Trustee shall become incapable of acting, or shall be adjudged as
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, the Company may remove the Trustee and appoint a successor
Trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the Trustee
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so removed and one copy to the successor Trustee, or, subject to the provisions of
Section 5.09, if no successor Trustee shall have been so appointed and have accepted
appointment within 30 days of the occurrence of any of clauses (i), (ii) or (iii)
above, any Securityholder who has been a bona fide holder of a Debt Security or Debt
Securities for at least six months may, on behalf of himself or herself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe, remove
the Trustee and appoint a successor Trustee.
(c) Upon prior written notice to the Company and the Trustee, the holders of a majority
in aggregate principal amount of the Debt Securities at the time outstanding may at any time
remove the Trustee and nominate a successor Trustee, which shall be deemed appointed as
successor Trustee unless within 10 Business Days after such nomination the Company objects
thereto, in which case, or in the case of a failure by such Securityholders to nominate a
successor Trustee, the Trustee so removed or any Securityholder, upon the terms and
conditions and otherwise as in Section 6.09(a) above, provided, may petition any court of
competent jurisdiction for an appointment of a successor.
(d) Any resignation or removal of the Trustee and appointment of a successor Trustee
pursuant to any of the provisions of this Section shall become effective upon acceptance of
appointment by the successor Trustee as provided in Section 6.10.
Section 6.10. Acceptance by Successor Trustee. Any successor Trustee appointed as provided
in Section 6.09 shall execute, acknowledge and deliver to the Company and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to the Debt Securities of its predecessor hereunder, with like effect as
if originally named as Trustee herein; but, nevertheless, on the written request of the Company or
of the successor Trustee, the Trustee ceasing to act shall, upon payment of any amounts then due it
pursuant to the provisions of Section 6.06, execute and deliver an instrument transferring to such
successor Trustee all the rights and powers of the Trustee so ceasing to act and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by such retiring Trustee
thereunder. Upon reasonable request of any such successor Trustee, the Company shall execute any
and all instruments in writing for more fully and certainly vesting in and confirming to such
successor Trustee all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a lien upon all property or funds held or collected by such Trustee to secure any amounts
then due it pursuant to the provisions of Section 6.06.
If a successor Trustee is appointed, the Company, the retiring Trustee and the successor
Trustee shall execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debt Securities as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor Trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide for or facilitate
the
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administration of the Trust hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be Trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such Trustee.
No successor Trustee shall accept appointment as provided in this Section unless at the time
of such acceptance such successor Trustee shall be eligible under the provisions of Section 6.08.
In no event shall a retiring Trustee be liable for the acts or omissions of any successor
Trustee hereunder.
Upon acceptance of appointment by a successor Trustee as provided in this Section 6.10, the
Company shall mail notice of the succession of such Trustee hereunder to the Securityholders at
their addresses as they shall appear on the Debt Security Register. If the Company fails to mail
such notice within 10 Business Days after the acceptance of appointment by the successor Trustee,
the successor Trustee shall cause such notice to be mailed at the expense of the Company.
Section 6.11. Succession by Merger, Etc. Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any Person succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, that such Person shall be otherwise eligible and qualified
under this Article.
In case at the time such successor to the Trustee shall succeed to the trusts created by this
Indenture any of the Debt Securities shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee,
and deliver such Debt Securities so authenticated; and in case at that time any of the Debt
Securities shall not have been authenticated, any successor to the Trustee may authenticate such
Debt Securities either in the name of any predecessor hereunder or in the name of the successor
Trustee; and in all such cases such certificates shall have the full force which it is anywhere in
the Debt Securities or in this Indenture; provided that the certificate of the Trustee shall have;
provided, however, that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Debt Securities in the name of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
Section 6.12. Authenticating Agents. There may be one or more Authenticating Agents
appointed by the Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Debt Securities issued upon exchange
or registration of transfer thereof as fully to all intents and purposes as though any such
Authenticating Agent had been expressly authorized to authenticate and deliver Debt Securities;
provided, however, that the Trustee shall have no liability to the Company for any acts or
omissions of the Authenticating Agent with respect to the authentication and delivery of Debt
Securities. Any such Authenticating Agent shall at all times be a Person organized and doing
46
business under the laws of the United States or of any state or territory thereof or of the
District of Columbia authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of at least $50,000,000 and being subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such Person publishes reports of
condition at least annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.12 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 an Authenticating Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect herein specified in
this Section.
Any Person into which any Authenticating Agent may be merged or converted or with which it may
be consolidated, or any Person resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of any Authenticating Agent, shall be the successor of such Authenticating
Agent hereunder, if such successor Person is otherwise eligible under this Section 6.12 without the
execution or filing of any paper or any further act on the part of the parties hereto or such
Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time terminate the agency of any Authenticating
Agent with respect to the Debt Securities by giving written notice of termination to such
Authenticating Agent and to the Company. Upon receiving such a notice of resignation or upon such
a termination, or in case at any time any Authenticating Agent shall cease to be eligible under
this Section 6.12, the Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.12, shall give written notice of such
appointment to the Company and shall mail notice of such appointment to all Securityholders as the
names and addresses of such Securityholders appear on the Debt Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all
rights, powers, duties and responsibilities with respect to the Debt Securities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent herein.
The Company agrees to pay to any Authenticating Agent from time to time reasonable
compensation for its services. Any Authenticating Agent shall have no responsibility or liability
for any action taken by it as such in accordance with the directions of the Trustee and shall
receive such reasonable indemnity from the Company as it may require against the costs, expenses
and liabilities incurred in furtherance of its duties under this Section 6.12.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
Section 7.01. Action by Securityholders. Whenever in this Indenture it is provided that the
holders of a specified percentage in aggregate principal amount of the Debt Securities or aggregate
Liquidation Amount of the Capital Securities may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the taking of
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any other action) the fact that at the time of taking any such action the holders of such
specified percentage have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders or holders of Capital Securities, as
the case may be, in person or by agent or proxy appointed in writing, (b) by the record of such
Securityholders voting in favor thereof at any meeting of such Securityholders duly called and held
in accordance with the provisions of Article VIII or of such holders of Capital Securities duly
called and held in accordance with the provisions of the Declaration, (c) by a combination of such
instrument or instruments and any such record of such a meeting of such Securityholders or holders
of Capital Securities, as the case may be, or (d) by any other method the Trustee deems
satisfactory.
If the Company shall solicit from the Securityholders any request, demand, authorization,
direction, notice, consent, waiver or other action or revocation of the same, the Company may, at
its option, as evidenced by an Officers’ Certificate, fix in advance a record date for such Debt
Securities for the determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action or revocation of the same, but
the Company shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other action or revocation of the same
may be given before or after the record date, but only the Securityholders of record at the close
of business on the record date shall be deemed to be Securityholders for the purposes of
determining whether Securityholders of the requisite proportion of outstanding Debt Securities have
authorized or agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other action or revocation of the same, and for that purpose the outstanding
Debt Securities shall be computed as of the record date; provided, however, that no such
authorization, agreement or consent by such Securityholders on the record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
Section 7.02. Proof of Execution by Securityholders. Subject to the provisions of
Sections 6.01, 6.02 and 8.05, proof of the execution of any instrument by a Securityholder or such
Securityholder’s agent or proxy shall be sufficient if made in accordance with such reasonable
rules and regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Debt Securities shall be proved by the Debt Security
Register or by a certificate of the Debt Security Registrar. The Trustee may require such
additional proof of any matter referred to in this Section as it shall deem necessary.
The record of any Securityholders’ meeting shall be proved in the manner provided in
Section 8.06.
Section 7.03. Who Are Deemed Absolute Owners. Prior to due presentment for registration of
transfer of any Debt Security, the Company, the Trustee, any Authenticating Agent, any Paying
Agent, any transfer agent and any Debt Security Registrar may deem the Person in whose name such
Debt Security shall be registered upon the Debt Security Register to be, and may treat such Person
as, the absolute owner of such Debt Security (whether or not such Debt Security shall be overdue)
for the purpose of receiving payment of or on account of the principal of, premium, if any, and
interest on such Debt Security and for all other purposes; and neither the Company nor the Trustee
nor any Authenticating Agent nor any Paying Agent nor
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any transfer agent nor any Debt Security Registrar shall be affected by any notice to the
contrary. All such payments so made to any Securityholder for the time being or upon such
Securityholder’s order shall be valid, and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon any such Debt Security.
Section 7.04. Debt Securities Owned by Company Deemed Not Outstanding. In determining
whether the holders of the requisite aggregate principal amount of Debt Securities have concurred
in any direction, consent or waiver under this Indenture, Debt Securities which are owned by the
Company or any other obligor on the Debt Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the Company (other
than the Trust) or any other obligor on the Debt Securities shall be disregarded and deemed not to
be outstanding for the purpose of any such determination; provided, however, that for the purposes
of determining whether the Trustee shall be protected in relying on any such direction, consent or
waiver, only Debt Securities which a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded. Debt Securities so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 7.04 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee’s right to vote such Debt Securities and that the pledgee
is not the Company or any such other obligor or Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
Section 7.05. Revocation of Consents; Future Holders Bound. At any time prior to (but not
after) the evidencing to the Trustee, as provided in Section 7.01, of the taking of any action by
the holders of the percentage in aggregate principal amount of the Debt Securities specified in
this Indenture in connection with such action, any Securityholder (in cases where no record date
has been set pursuant to Section 7.01) or any holder as of an applicable record date (in cases
where a record date has been set pursuant to Section 7.01) of a Debt Security (or any Debt Security
issued in whole or in part in exchange or substitution therefor) the serial number of which is
shown by the evidence to be included in the Debt Securities the holders of which have consented to
such action may, by filing written notice with the Trustee at the Principal Office of the Trustee
and upon proof of holding as provided in Section 7.02, revoke such action so far as concerns such
Debt Security (or so far as concerns the principal amount represented by any exchanged or
substituted Debt Security). Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such Securityholder and upon all future holders and
owners of such Debt Security, and of any Debt Security issued in exchange or substitution therefor
or on registration of transfer thereof, irrespective of whether or not any notation in regard
thereto is made upon such Debt Security or any Debt Security issued in exchange or substitution
therefor.
ARTICLE VIII
SECURITYHOLDERS’ MEETINGS
Section 8.01. Purposes of Meetings. A meeting of Securityholders may be called at any time
and from time to time pursuant to the provisions of this Article VIII for any of the following
purposes:
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(a) to give any notice to the Company or to the Trustee, or to give any directions to
the Trustee, or to consent to the waiving of any default hereunder and its consequences, or
to take any other action authorized to be taken by Securityholders pursuant to any of the
provisions of Article V;
(b) to remove the Trustee and nominate a successor trustee pursuant to the provisions
of Article VI;
(c) to consent to the execution of an indenture or indentures supplemental hereto
pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf of the holders of
any specified aggregate principal amount of such Debt Securities under any other provision
of this Indenture or under applicable law.
Section 8.02. Call of Meetings by Trustee. The Trustee may at any time call a meeting of
Securityholders to take any action specified in Section 8.01, to be held at such time and at such
place as the Trustee shall determine. Notice of every meeting of the Securityholders, setting
forth the time and the place of such meeting and in general terms the action proposed to be taken
at such meeting, shall be mailed to Securityholders affected at their addresses as they shall
appear on the Debt Securities Register and, if the Company is not a Securityholder, to the Company.
Such notice shall be mailed not less than 20 nor more than 180 days prior to the date fixed for
the meeting.
Section 8.03. Call of Meetings by Company or Securityholders. In case at any time the
Company pursuant to a Board Resolution, or the holders of at least 10% in aggregate principal
amount of the Debt Securities, as the case may be, then outstanding, shall have requested the
Trustee to call a meeting of Securityholders, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of
such meeting within 20 days after receipt of such request, then the Company or such Securityholders
may determine the time and the place for such meeting and may call such meeting to take any action
authorized in Section 8.01, by mailing notice thereof as provided in Section 8.02.
Section 8.04. Qualifications for Voting. To be entitled to vote at any meeting of
Securityholders a Person shall (a) be a holder of one or more Debt Securities with respect to which
the meeting is being held; or (b) a Person appointed by an instrument in writing as proxy by a
holder of one or more such Debt Securities. The only Persons who shall be entitled to be present
or to speak at any meeting of Securityholders shall be the Persons entitled to vote at such meeting
and their counsel and any representatives of the Trustee and its counsel and any representatives of
the Company and its counsel.
Section 8.05. Regulations. Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Debt Securities and of the appointment of
proxies, and in regard to the appointment and duties of inspectors of votes, the submission and
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examination of proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the Company or by Securityholders as provided in
Section 8.03, in which case the Company or the Securityholders calling the meeting, as the case may
be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote at the meeting.
Subject to the provisions of Section 7.04, at any meeting each Securityholder with respect to
which such meeting is being held or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Debt Securities held or represented by such Securityholder; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Debt Security challenged as
not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Debt Securities held by such
chairman or instruments in writing as aforesaid duly designating such chairman as the Person to
vote on behalf of other Securityholders. Any meeting of Securityholders duly called pursuant to
the provisions of Section 8.02 or 8.03 may be adjourned from time to time by a majority of those
present, whether or not constituting a quorum, and the meeting may be held as so adjourned without
further notice.
Section 8.06. Voting. The vote upon any resolution submitted to any meeting of
Securityholders with respect to which such meeting is being held shall be by written ballots on
which shall be subscribed the signatures of such Securityholders or of their representatives by
proxy and the serial number or numbers of the Debt Securities held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes
cast at the meeting for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in triplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting and showing that
said notice was mailed as provided in Section 8.02. The record shall show the serial numbers of
the Debt Securities voting in favor of or against any resolution. The record shall be signed and
verified by the affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so
signed and verified shall be conclusive evidence of the matters therein stated.
Section 8.07. Quorum; Actions. The Persons entitled to vote a majority in principal amount
of the Debt Securities then outstanding shall constitute a quorum for a meeting of Securityholders;
provided, however, that if any action is to be taken at such meeting with respect to a consent,
waiver, request, demand, notice, authorization, direction or other action that may be given by the
holders of not less than a specified percentage in principal amount of the Debt Securities then
outstanding, the Persons holding or representing such specified percentage in principal amount of
the Debt Securities then outstanding will constitute a quorum. In the absence of a quorum within
30 minutes of the time appointed for any such meeting, the meeting
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shall, if convened at the request of Securityholders, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by the permanent
chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at
any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the permanent chairman of the meeting prior to the adjournment
of such adjourned meeting. Notice of the reconvening of any adjourned meeting shall be given as
provided in Section 8.02, except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of
an adjourned meeting shall state expressly the percentage, as provided above, of the principal
amount of the Debt Securities then outstanding which shall constitute a quorum.
Except as limited by the provisos in the first paragraph of Section 9.02, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted by the affirmative vote of the holders of a majority in principal amount
of the Debt Securities then outstanding; provided, however, that, except as limited by the provisos
in the first paragraph of Section 9.02, any resolution with respect to any consent, waiver,
request, demand, notice, authorization, direction or other action that this Indenture expressly
provides may be given by the holders of not less than a specified percentage in principal amount of
the Debt Securities then outstanding may be adopted at a meeting or an adjourned meeting duly
reconvened and at which a quorum is present as aforesaid only by the affirmative vote of the
holders of a not less than such specified percentage in principal amount of the Debt Securities
then outstanding.
Any resolution passed or decision taken at any meeting of Securityholders duly held in
accordance with this Section shall be binding on all the Securityholders, whether or not present or
represented at the meeting.
Section 8.08. Written Consent Without a Meeting. Whenever under this Indenture,
Securityholders are required or permitted to take any action by vote, such action may be taken
without a meeting on written consent, setting forth the action so taken. No consent shall be
effective to take the action referred to therein unless, within sixty days of the earliest dated
consent delivered in the manner required by this paragraph to the Trustee, written consents signed
by a sufficient number of Securityholders entitled to vote thereon to take action are delivered to
the Trustee at its Principal Office. Delivery made to the Trustee at its Principal Office, shall
be by hand or by certificated or registered mail, return receipt requested. Written consent thus
given by the Securityholders of such number of Debt Securities as is required hereunder, shall have
the same effect as a valid vote of Securityholders of such number of Debt Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Securityholders. The Company, when
authorized by a Board Resolution, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto, without the consent of the Securityholders, for one
or more of the following purposes:
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(a) to evidence the succession of another Person to the Company, or successive
successions, and the assumption by the successor Person of the covenants, agreements and
obligations of the Company, pursuant to Article XI hereof;
(b) to add to the covenants of the Company such further covenants, restrictions or
conditions for the protection of the Securityholders as the Board of Directors shall
consider to be for the protection of such Securityholders, and to make the occurrence, or
the occurrence and continuance, of a Default in any of such additional covenants,
restrictions or conditions a Default or an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant restriction or condition such
supplemental indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies available
to the Trustee upon such default;
(c) to cure any ambiguity or to correct or supplement any provision contained herein or
in any supplemental indenture which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture, or to make or amend such other
provisions in regard to matters or questions arising under this Indenture; provided that any
such action shall not materially adversely affect the interests of the Securityholders;
(d) to add to, delete from, or revise the terms of Debt Securities, including, without
limitation, any terms relating to the issuance, exchange, registration or transfer of Debt
Securities, including to provide for transfer procedures and restrictions substantially
similar to those applicable to the Capital Securities as required by Section 2.05 (for
purposes of assuring that no registration of Debt Securities is required under the
Securities Act); provided, however, that any such action shall not adversely affect the
interests of the Securityholders then outstanding (it being understood, for purposes of this
proviso, that transfer restrictions on Debt Securities substantially similar to those that
were applicable to Capital Securities shall not be deemed to materially adversely affect the
Securityholders);
(e) to evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Debt Securities and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee;
(f) to make any change (other than as elsewhere provided in this paragraph) that does
not adversely affect the rights of any Securityholder in any material respect;
(g) to provide for the issuance of and establish the form and terms and conditions of
the Debt Securities, to establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or the Debt Securities, or to add to the rights of
the Securityholders;
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(h) to provide for the issuance of Global Debt Securities in place of definitive Debt
Securities and the designation of the Global Debt Securities for trading in the Private
Offering, Resales and Trading through the Automatic Linkages system if available; or
(i) to permit the qualification hereof and thereof under the Trust Indenture Act or any
similar federal statute hereafter in effect or to permit the qualification of the Capital
Securities for sale under the securities laws of the United States of America or any of the
states of the United States of America, and, if they so determine, to add to this Indenture
such other terms, conditions and provisions as may be permitted or required by said Trust
Indenture Act or similar federal statute.
The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and stipulations which may be
therein contained and to accept the conveyance, transfer and assignment of any property thereunder,
but the Trustee shall not be obligated to, but may in its discretion, enter into any such
supplemental indenture which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section 9.01 may be executed
by the Company and the Trustee without the consent of the Securityholders at the time outstanding,
notwithstanding any of the provisions of Section 9.02.
Section 9.02. Supplemental Indentures With Consent of Securityholders. With the consent
(evidenced as provided in Section 7.01) of the holders of not less than a majority in aggregate
principal amount of the Debt Securities at the time outstanding affected by such supplemental
indenture (voting as a class), the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Securityholders; provided, however, that no such supplemental indenture shall without
the consent of the holders of each Debt Security then outstanding and affected thereby (i) change
the Maturity Date of any Debt Security, or reduce the principal amount thereof or any premium
thereon, or reduce the rate (or manner of calculation of the rate) or extend the time of payment of
interest thereon, or reduce (other than as a result of the maturity or earlier redemption of any
such Debt Security in accordance with the terms of this Indenture and such Debt Security) or
increase the aggregate principal amount of Debt Securities then outstanding, or change any of the
redemption provisions, or make the principal thereof or any interest or premium thereon payable in
any coin or currency other than United States Dollars, or impair or affect the right of any
Securityholder to institute suit for payment thereof or impair the right of repayment, if any, at
the option of the Securityholder, or (ii) reduce the aforesaid percentage of Debt Securities the
holders of which are required to consent to any such supplemental indenture; and provided further,
that if the Debt Securities are held by the Trust or a trustee of such trust, such supplemental
indenture shall not be effective until the holders of a majority in Liquidation Amount of the
outstanding Capital Securities shall have consented to such supplemental indenture; provided
further, however, that if the consent of the Securityholder of each outstanding Debt Security is
required, such supplemental indenture shall not be effective
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until each holder of the outstanding Capital Securities shall have consented to such
supplemental indenture.
Upon the request of the Company accompanied by a Board Resolution authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of
Securityholders (and holders of Capital Securities, if required) as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of this Section, the Trustee shall transmit by first-class mail, postage
prepaid, a notice, prepared by the Company, setting forth in general terms the substance of such
supplemental indenture, to the Securityholders as their names and addresses appear upon the Debt
Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under this Section 9.02 to
approve the particular form of any proposed supplemental indenture, but it shall be sufficient if
such consent shall approve the substance thereof.
Section 9.03. Effect of Supplemental Indentures. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article IX, this Indenture shall be and be deemed to
be modified and amended in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the Company and the
Securityholders shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 9.04. Notation on Debt Securities. Debt Securities authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this Article IX may bear
a notation as to any matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Debt Securities so modified as to conform, in the opinion of the
Board of Directors of the Company, to any modification of this Indenture contained in any such
supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee or
the Authenticating Agent and delivered in exchange for the Debt Securities then outstanding.
Section 9.05. Evidence of Compliance of Supplemental Indenture To Be Furnished to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, shall, in addition to the
documents required by Section 14.06, receive an Officers’ Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto complies with the
requirements of this Article IX. The Trustee shall receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this
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Article IX is authorized or permitted by, and conforms to, the terms of this Article IX and
that it is proper for the Trustee under the provisions of this Article IX to join in the execution
thereof.
ARTICLE X
REDEMPTION OF SECURITIES
Section 10.01. Optional Redemption. At any time the Company shall have the right, subject to
the receipt by the Company of prior approval from any regulatory authority with jurisdiction over
the Company if such approval is then required under applicable capital guidelines or policies of
such regulatory authority, to redeem the Debt Securities, in whole or (provided that all accrued
and unpaid interest has been paid on all Debt Securities for all Payment Periods terminating on or
prior to such date) from time to time in part, on January 31, 2011 and any March 15, June 15,
September 15 or December 15 on or after January 31, 2011 (each a “Redemption Date”), at the
Redemption Price.
Section 10.02. Special Event Redemption. If a Special Event shall occur and be continuing,
the Company shall have the right (subject to the receipt by the Company of prior approval from any
regulatory authority with jurisdiction over the Company if such approval is then required under
applicable capital guidelines or policies of such regulatory authority) to redeem the Debt
Securities in whole or in part, at any time within 90 days following the occurrence of such Special
Event (the “Special Redemption Date”) at the Special Redemption Price.
Section 10.03. Notice of Redemption; Selection of Debt Securities. In case the Company shall
desire to exercise the right to redeem all, or, as the case may be, any part of the Debt
Securities, it shall fix a date for redemption and shall mail, or cause the Trustee to mail (at the
expense of the Company) a notice of such redemption (“Redemption Notice”) at least 30 and not more
than 60 days prior to the date fixed for redemption to the Securityholders so to be redeemed as a
whole or in part at their last addresses as the same appear on the Debt Security Register. Such
mailing shall be by first-class mail. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Securityholder receives such
notice. In any case, failure to give such notice by mail or any defect in the notice to the holder
of any Debt Security designated for redemption as a whole or in part shall not affect the validity
of the proceedings for the redemption of any other Debt Security.
Each such notice of redemption shall specify the CUSIP number, if any, of the Debt Securities
to be redeemed, the date fixed for redemption, the redemption price (or manner of calculation of
the price) at which Debt Securities are to be redeemed, the place or places of payment, that
payment will be made upon presentation and surrender of such Debt Securities, that interest accrued
to the date fixed for redemption will be paid as specified in said notice, and that on and after
said date interest thereon or on the portions thereof to be redeemed will cease to accrue. If less
than all the Debt Securities are to be redeemed the notice of redemption shall specify the numbers
of the Debt Securities to be redeemed. In case the Debt Securities are to be redeemed in part
only, the notice of redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the date fixed for redemption, upon
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surrender of such Debt Security, a new Debt Security or Debt Securities in principal amount
equal to the unredeemed portion thereof will be issued.
Prior to 10:00 a.m., Eastern time, on the Redemption Date or Special Redemption Date specified
on the Redemption Notice, as applicable, the Company will deposit with the Trustee or with one or
more Paying Agents an amount of money sufficient to redeem on the redemption date all the Debt
Securities so called for redemption at the appropriate redemption price, together with unpaid
interest accrued to such date.
The Company will give the Trustee notice not less than 45 nor more than 60 days prior to the
Redemption Date as to the Redemption Price at which the Debt Securities are to be redeemed and the
aggregate principal amount of Debt Securities to be redeemed and the Trustee shall select, in such
manner as in its sole discretion it shall deem appropriate and fair, the Debt Securities or
portions thereof (in integral multiples of $1,000) to be redeemed.
Section 10.04. Payment of Debt Securities Called for Redemption. If notice of redemption has
been given as provided in Section 10.03, the Debt Securities or portions of Debt Securities with
respect to which such notice has been given shall become due and payable on the Redemption Date or
the Special Redemption Date (as the case may be) and at the place or places stated in such notice
at the applicable redemption price, together with interest accrued to the date fixed for
redemption, and on and after said Redemption Date or the Special Redemption Date (unless the
Company shall default in the payment of such Debt Securities at the redemption price, together with
unpaid interest accrued thereon to said date) interest on the Debt Securities or portions of Debt
Securities so called for redemption shall cease to accrue. On presentation and surrender of such
Debt Securities at a place of payment specified in said notice, such Debt Securities or the
specified portions thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with unpaid interest accrued thereon to the Redemption Date or the Special
Redemption Date (as the case may be).
Upon presentation of any Debt Security redeemed in part only, the Company shall execute and
the Trustee shall authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Debt Security or Debt Securities of authorized denominations in
principal amount equal to the unredeemed portion of the Debt Security so presented.
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 11.01. Company May Consolidate, etc. On Certain Terms. Nothing contained in this
Indenture or in the Debt Securities shall prevent any consolidation or merger of the Company with
or into any other Person (whether or not affiliated with the Company) or successive consolidations
or mergers in which the Company or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of all or substantially all of
the property or capital stock of the Company or its successor or successors, to any other Person
(whether or not affiliated with the Company, or its successor or successors) authorized to acquire
and operate the same; provided, however, that the Company hereby
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covenants and agrees that, upon any such consolidation, merger (where the Company is not the
surviving corporation), sale, conveyance, transfer or other disposition, the due and punctual
payment of the principal of (and premium, if any) and interest on all of the Debt Securities in
accordance with their terms, according to their tenor, and the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be kept or performed by the
Company, shall be expressly assumed by supplemental indenture satisfactory in form to the Trustee
in its reasonable determination executed and delivered to the Trustee by the entity formed by such
consolidation, or into which the Company shall have been merged, or by the entity which shall have
acquired such property.
Section 11.02. Successor Entity To Be Substituted. In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition contemplated in Section 11.01 and upon the
assumption by the successor entity, by supplemental indenture, executed and delivered to the
Trustee and reasonably satisfactory in form to the Trustee, of the due and punctual payment of the
principal of and premium, if any, and interest on all of the Debt Securities and the due and
punctual performance and observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, such successor entity shall succeed to and be substituted for
the Company, with the same effect as if it had been named herein as the Company, and thereupon the
predecessor entity shall be relieved of any further liability or obligation hereunder or upon the
Debt Securities. Such successor entity thereupon may cause to be signed, and may issue in its own
name or in the name of the Company, any or all of the Debt Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor entity instead of the Company and
subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee or
the Authenticating Agent shall authenticate and deliver any Debt Securities which previously shall
have been signed and delivered by the officers of the Company, to the Trustee or the Authenticating
Agent for authentication, and any Debt Securities which such successor entity thereafter shall
cause to be signed and delivered to the Trustee or the Authenticating Agent for that purpose. All
the Debt Securities so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Debt Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Debt Securities had been issued at the date of the execution
hereof.
Section 11.03. Opinion of Counsel To Be Given to Trustee. The Trustee, subject to the
provisions of Sections 6.01 and 6.02, shall receive, in addition to the Opinion of Counsel required
by Section 9.05, an Opinion of Counsel as conclusive evidence that any consolidation, merger, sale,
conveyance, transfer or other disposition, and any assumption, permitted or required by the terms
of this Article XI complies with the provisions of this Article XI.
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 12.01. Discharge of Indenture. When the Company shall deliver to the Trustee for
cancellation all Debt Securities theretofore authenticated (other than any Debt Securities which
shall have been destroyed, lost or stolen and which shall have been replaced or paid as provided in
Section 2.06) and not theretofore canceled, or all the Debt Securities not theretofore
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canceled or delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds, which shall be
immediately due and payable, sufficient to pay at maturity or upon redemption all of the Debt
Securities (other than any Debt Securities which shall have been destroyed, lost or stolen and
which shall have been replaced or paid as provided in Section 2.06) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and premium, if any, and interest
due or to become due to such date of maturity or redemption date, as the case may be, but
excluding, however, the amount of any moneys for the payment of principal of, and premium, if any,
or interest on the Debt Securities (a) theretofore repaid to the Company in accordance with the
provisions of Section 12.04; or (b) paid to any state or to the District of Columbia pursuant to
its unclaimed property or similar laws, and if in the case of either clause (a) or (b) the Company
shall also pay or cause to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect except for the provisions of Sections 2.05, 2.06,
2.08, 3.01, 3.02, 3.04, 6.06, 6.08, 6.09 and 12.04 hereof shall survive until such Debt Securities
shall mature or are redeemed, as the case may be, and are paid in full. Thereafter, Sections 6.06
and 12.04 shall survive, and the Trustee, on demand of the Company accompanied by an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been complied with, and at
the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture. The Company agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in connection with this
Indenture or the Debt Securities.
Section 12.02. Deposited Moneys To Be Held in Trust by Trustee. Subject to the provisions of
Section 12.04, all moneys deposited with the Trustee pursuant to Section 12.01 shall be held in
trust in a non-interest bearing account and applied by it to the payment, either directly or
through any Paying Agent (including the Company if acting as its own Paying Agent), to the holders
of the particular Debt Securities for the payment of which such moneys have been deposited with the
Trustee, of all sums due and to become due thereon for principal, and premium, if any, and
interest.
Section 12.03. Paying Agent To Repay Moneys Held. Upon the satisfaction and discharge of
this Indenture all moneys then held by any Paying Agent of the Debt Securities (other than the
Trustee) shall, upon demand of the Company, be repaid to the Company or paid to the Trustee, and
thereupon such Paying Agent shall be released from all further liability with respect to such
moneys.
Section 12.04. Return of Unclaimed Moneys. Any moneys deposited with or paid to the Trustee
or any Paying Agent for payment of the principal of, and premium, if any, or interest on Debt
Securities and not applied but remaining unclaimed by the Securityholders for two years after the
date upon which the principal of, and premium, if any, or interest on such Debt Securities, as the
case may be, shall have become due and payable, shall, subject to applicable escheatment laws, be
repaid to the Company by the Trustee or such Paying Agent on written demand; and the holder of any
of the Debt Securities shall thereafter look only to the Company
59
for any payment which such Securityholder may be entitled to collect, and all liability of the
Trustee or such Paying Agent with respect to such moneys shall thereupon cease.
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS
DIRECTORS
Section 13.01. Indenture and Debt Securities Solely Corporate Obligations. No recourse for
the payment of the principal of or premium, if any, or interest on any Debt Security, or for any
claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental indenture, or in any
such Debt Security, or because of the creation of any indebtedness represented thereby, shall be
had against any incorporator, stockholder, employee, officer, director or agent, as such, past,
present or future, of the Company or of any predecessor or successor Person of the Company, either
directly or through the Company or any successor Person of the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, it being expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this Indenture and the
issue of the Debt Securities.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.01. Successors. All the covenants, stipulations, promises and agreements of the
Company in this Indenture shall bind its successors and assigns whether so expressed or not.
Section 14.02. Official Acts by Successor Entity. Any act or proceeding by any provision of
this Indenture authorized or required to be done or performed by any board, committee or officer of
the Company shall and may be done and performed with like force and effect by the like board,
committee, officer or other authorized Person of any entity that shall at the time be the lawful
successor of the Company.
Section 14.03. Surrender of Company Powers. The Company by instrument in writing executed by
authority of at least two-thirds of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company and thereupon such power so surrendered shall
terminate both as to the Company, and as to any permitted successor.
Section 14.04. Addresses for Notices, Etc. Any notice, consent, direction, request,
authorization, waiver or demand which by any provision of this Indenture is required or permitted
to be given, made, furnished or served by the Trustee or by the Securityholders on or to the
Company may be given or served in writing, duly signed by the party giving such notice, and shall
be delivered by facsimile (which shall be followed by notice delivered or mailed by first class
mail) or mailed by first class mail to the Company at:
Flagstar Bancorp, Inc.
0000 Xxxxxxxxx Xxxxx
0000 Xxxxxxxxx Xxxxx
00
Xxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxx
Attention: Xxxx X. Xxxxx
Any notice, direction, request or demand by any Securityholder or the Company to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made
in writing at the office of Wilmington Trust Company at:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Any notice, consent, direction, request, authorization, waiver or demand on or to any
Securityholder shall be deemed to have been sufficiently given or made, for all purposes, if given
or made in writing at the address set forth in the Debt Security Register.
Section 14.05. Governing Law. This Indenture and each Debt Security shall each be governed
by the law of the State of New York, and for all purposes shall be governed by and construed in
accordance with the law of said State, without regard to conflict of laws principles thereof, other
than Section 5-1401 of the New York General Obligations Law.
Section 14.06. Evidence of Compliance With Conditions Precedent. Upon any application or
demand by the Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers’ Certificate stating that in the
opinion of the signers all conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion
of such counsel, all such conditions precedent have been complied with (except that no such Opinion
of Counsel is required to be furnished to the Trustee in connection with the authentication and
issuance of Debt Securities issued on the date of this Indenture).
Each certificate or opinion provided for in this Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant provided for in this Indenture (except
certificates delivered pursuant to Section 3.05) shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition and the definitions relating
thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based; (c) a
statement that, in the opinion of such person, he or she has made such examination or investigation
as is necessary to enable him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (d) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been complied with.
Section 14.07. Non-Business Days. Notwithstanding anything to the contrary contained herein,
if any Interest Payment Date, other than on the Maturity Date, any Redemption Date or the Special
Redemption Date, falls on a day that is not a Business Day, then any interest payable
61
will be paid on, and such Interest Payment Date will be moved to, the next succeeding Business
Day, and additional interest will accrue for each day that such payment is delayed as a result
thereof. If the Maturity Date, Redemption Date or Special Redemption Date falls on a day that is
not a Business Day, then the principal, premium, if any, and/or interest payable on such date will
be paid on the next succeeding Business Day, and no additional interest will accrue (except that,
if such Business Day falls in the next calendar year, such payment will be made on the immediately
preceding Business Day).
Section 14.08. Table of Contents, Headings, Etc. The table of contents and the titles and
headings of the articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way modify or restrict any
of the terms or provisions hereof.
Section 14.09. Execution in Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall together constitute
but one and the same instrument. A counterpart signed and transmitted electronically or by
facsimile shall be treated as an original.
Section 14.10. Separability. In case any one or more of the provisions contained in this
Indenture or in the Debt Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Indenture or of such Debt Securities, but this Indenture and such Debt
Securities shall be construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
Section 14.11. Assignment. Subject to Article XI, the Company will have the right at all
times to assign any of its rights or obligations under this Indenture and the Debt Securities to a
direct or indirect wholly owned Subsidiary of the Company; provided, however, that, in the event of
any such assignment, the Company will remain liable for all such obligations. Subject to the
foregoing, this Indenture is binding upon and inures to the benefit of the parties hereto and their
respective successors and assigns. This Indenture may not otherwise be assigned by the parties
hereto.
Section 14.12. Acknowledgment of Rights. The Company agrees that, with respect to any Debt
Securities held by the Trust or the Institutional Trustee of the Trust, if the Institutional
Trustee of the Trust fails to enforce its rights under this Indenture as the Securityholder held as
the assets of such Trust after the holders of a majority in Liquidation Amount of the Capital
Securities of such Trust have so directed in writing such Institutional Trustee, a holder of record
of such Capital Securities may, to the fullest extent permitted by law, institute legal proceedings
directly against the Company to enforce such Institutional Trustee’s rights under this Indenture
without first instituting any legal proceedings against such Institutional Trustee or any other
Person. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest (or premium, if any) or
principal on the Debt Securities on the date such interest (or premium, if any) or principal is
otherwise due and payable (or in the case of redemption, on the redemption date), the Company
agrees that a holder of record of Capital Securities of the Trust may directly institute a
proceeding against the Company for enforcement of payment to such holder directly of the
62
principal of (or premium, if any) or interest on the Debt Securities having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Capital Securities of such holder
on or after the respective due date specified in the Debt Securities.
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
Section 15.01. Agreement To Subordinate. The Company covenants and agrees, and each holder
of Debt Securities issued hereunder and under any supplemental indenture (the “Additional
Provisions”) by such Securityholder’s acceptance thereof likewise covenants and agrees, that all
Debt Securities shall be issued subject to the provisions of this Article XV; and each
Securityholder, whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the payments due on all Debt Securities issued hereunder and
under any Additional Provisions shall, to the extent and in the manner hereinafter set forth, be
subordinated and junior in right of payment to the prior payment in full of all Senior Indebtedness
of the Company, whether outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any Default or Event of
Default hereunder.
Section 15.02. Default on Senior Indebtedness. In the event and during the continuation of
any default by the Company in the payment of principal, premium, interest or any other payment due
on any Senior Indebtedness of the Company following any applicable grace period, or in the event
that the maturity of any Senior Indebtedness of the Company has been accelerated because of a
default and such acceleration has not been rescinded or canceled and such Senior Indebtedness has
not been paid in full, then, in either case, no payment shall be made by the Company with respect
to the principal (including redemption) of, or premium, if any, or interest on the Debt Securities.
In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee
when such payment is prohibited by the preceding paragraph of this Section 15.02, such payment
shall, subject to Section 15.07, be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent that the holders of
the Senior Indebtedness (or their representative or representatives or a trustee) notify the
Trustee in writing within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
Section 15.03. Liquidation, Dissolution, Bankruptcy. Upon any payment by the Company or
distribution of assets of the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or liquidation or
63
reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness of the Company
shall first be paid in full, or payment thereof provided for in money in accordance with its terms,
before any payment is made by the Company, on account of the principal (and premium, if any) or
interest on the Debt Securities. Upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Securityholders or the Trustee
would be entitled to receive from the Company, except for the provisions of this Article XV, shall
be paid by the Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Securityholders or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company) or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any instruments evidencing such
Senior Indebtedness may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or money’s worth, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior Indebtedness, before
any payment or distribution is made to the Securityholders.
In the event that, notwithstanding the foregoing, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, prohibited by the
foregoing, shall be received by the Trustee before all Senior Indebtedness of the Company is paid
in full, or provision is made for such payment in money in accordance with its terms, such payment
or distribution shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of such Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, as their respective interests may appear, as calculated by the
Company, for application to the payment of all Senior Indebtedness of the Company remaining unpaid
to the extent necessary to pay such Senior Indebtedness in full in money in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for the benefit of the
holders of such Senior Indebtedness.
For purposes of this Article XV, the words “cash, property or securities” shall not be deemed
to include shares of stock of the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article XV with respect to
the Debt Securities to the payment of all Senior Indebtedness, that may at the time be outstanding;
provided that (a) such Senior Indebtedness is assumed by the new corporation, if any, resulting
from any such reorganization or readjustment; and (b) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the conveyance, transfer or
other disposition of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XI of this Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section if
such other corporation shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions stated in Article XI of this Indenture.
64
Nothing in Section 15.02 or in this Section shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.06 of this Indenture.
Section 15.04. Subrogation. Subject to the payment in full of all Senior Indebtedness, the
Securityholders shall be subrogated to the rights of the holders of such Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Company, applicable to
such Senior Indebtedness until the principal of (and premium, if any) and interest on the Debt
Securities shall be paid in full. For the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any cash, property or securities to
which the Securityholders or the Trustee would be entitled except for the provisions of this
Article XV, and no payment over pursuant to the provisions of this Article XV to or for the benefit
of the holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness of the Company, and the
Securityholders be deemed to be a payment or distribution by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XV are and are intended
solely for the purposes of defining the relative rights of the Securityholders, on the one hand,
and the holders of such Senior Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture, any Additional Provisions
or in the Debt Securities is intended to or shall impair, as between the Company, its creditors
other than the holders of Senior Indebtedness of the Company, and the Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay to the Securityholders the
principal of (and premium, if any) and interest on the Debt Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Securityholders and creditors of the Company, other than the holders of
Senior Indebtedness of the Company, nor shall anything herein or therein prevent the Trustee or the
holder of any Debt Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article XV of the holders
of such Senior Indebtedness in respect of cash, property or securities of the Company, received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in this Article XV, the
Trustee, subject to the provisions of Article VI of this Indenture, and the Securityholders shall
be entitled to conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent or
other Person making such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article XV.
Section 15.05. Trustee To Effectuate Subordination. Each Securityholder by such
Securityholder’s acceptance thereof authorizes and directs the Trustee on such Securityholder’s
behalf to take such action as may be necessary or appropriate to effectuate the subordination
provided in this Article XV and appoints the Trustee such Securityholder’s attorney-in-fact for any
and all such purposes.
65
Section 15.06. Notice by the Company. The Company shall give prompt written notice to a
Responsible Officer of the Trustee at the Principal Office of the Trustee of any fact known to the
Company that would prohibit the making of any payment of moneys to or by the Trustee in respect of
the Debt Securities pursuant to the provisions of this Article XV. Notwithstanding the provisions
of this Article XV or any other provision of this Indenture or any Additional Provisions, the
Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Trustee in respect of the Debt Securities pursuant to
the provisions of this Article XV, unless and until a Responsible Officer of the Trustee at the
Principal Office of the Trustee shall have received written notice thereof from the Company or a
holder or holders of Senior Indebtedness or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section at least two Business
Days prior to the date upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if any) or interest on
any Debt Security), then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same to the purposes for
which they were received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this Indenture, shall be entitled to
conclusively rely on the delivery to it of a written notice by a Person representing himself or
herself to be a holder of Senior Indebtedness of the Company (or a trustee or representative on
behalf of such holder), to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with respect to the
right of any Person as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XV, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under this Article XV, and,
if such evidence is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 15.07. Rights of the Trustee; Holders of Senior Indebtedness. The Trustee in its
individual capacity shall be entitled to all the rights set forth in this Article XV in respect of
any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture or any Additional Provisions shall deprive the Trustee
of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are specifically set forth in
this Article XV, and no implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture or any Additional Provisions against the Trustee.
The Trustee shall not owe or be deemed to owe any fiduciary duty to the holders of such Senior
Indebtedness and, subject to the provisions of Article VI of this Indenture, the Trustee shall not
be liable to any holder of such Senior Indebtedness if it shall pay over or deliver
66
to Securityholders, the Company or any other Person money or assets to which any holder of
such Senior Indebtedness shall be entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 6.06.
Section 15.08. Subordination May Not Be Impaired. No right of any present or future holder
of any Senior Indebtedness of the Company to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the part of the Company,
or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the
Company, with the terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the holders of Senior
Indebtedness of the Company may, at any time and from time to time, without the consent of or
notice to the Trustee or the Securityholders, without incurring responsibility to the
Securityholders and without impairing or releasing the subordination provided in this Article XV or
the obligations hereunder of the Securityholders to the holders of such Senior Indebtedness, do any
one or more of the following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any
manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing such Senior Indebtedness; (c) release any Person
liable in any manner for the collection of such Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company, and any other Person.
Wilmington Trust Company, in its capacity as Trustee, hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein above set forth.
67
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their
respective officers thereunto duly authorized, as of the day and year first above written.
FLAGSTAR BANCORP, INC. | ||||||
By | Xxxx X. Xxxxx
|
|||||
Name Xxxx X. Xxxxx | ||||||
Title Exec VP / CFO | ||||||
WILMINGTON TRUST COMPANY, as Trustee | ||||||
By | JCM
|
|||||
Name J. Xxxxxxxxxxx Xxxxxx | ||||||
Title Financial Services Officer |
68
EXHIBIT A
FORM OF CONVERTIBLE JUNIOR SUBORDINATED
DEBT SECURITY DUE SEPTEMBER 15, 2039
[FORM OF FACE OF SECURITY]
DEBT SECURITY DUE SEPTEMBER 15, 2039
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT (“RULE 144A”), TO A PERSON THE HOLDER REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO A “NON U.S.
PERSON” IN AN “OFFSHORE TRANSACTION” PURSUANT TO REGULATION S UNDER THE SECURITIES
ACT, (D) PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)
(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN “ACCREDITED INVESTOR,”
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER
PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”), (EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO PERSON
INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY
INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE
RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS
EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS
PURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR
HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED
BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT
PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF
THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE
BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT
IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE
FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER OF THIS SECURITY WILL DELIVER TO THE
COMPANY AND TRUSTEE SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY
THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A
PRINCIPAL AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS
THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING A PRINCIPAL
AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF
THIS SECURITY FOR ANY PURPOSE, INCLUDING, BUT
A-2
NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS SECURITY, AND SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS SECURITY.
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY
AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE
CORPORATION. THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORS AND THE
CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL
FOR A LOAN BY THE COMPANY OR ANY OF ITS SUBSIDIARIES AND IS NOT SECURED.
A-3
Form of Convertible Junior Subordinated Debt Security due September 15, 2039
of
Flagstar Bancorp, Inc.
Flagstar Bancorp, Inc., a savings and loan holding company incorporated in Michigan (the
“Company” which term includes any successor Person under the Indenture hereinafter referred to),
for value received promises to pay to Wilmington Trust Company, not in its individual capacity but
solely as Institutional Trustee for Flagstar Statutory Trust XI, a Delaware statutory trust (the
“Securityholder”) or registered assigns, the principal sum of $51,547,000 on September 15, 2039,
and to pay interest on said principal sum from June 30, 2009, or from the most recent interest
payment date to which interest has been paid or duly provided for, quarterly (subject to deferral
as set forth herein) in arrears on March 15, June 15, September 15 and December 15 of each year (or
if such day is not a Business Day, the next succeeding Business Day), commencing September 15, 2009
(each such date, an “Interest Payment Date”), at a fixed per annum rate equal to 10% (the “Interest
Rate”) (provided, however, that the Interest Rate for any Payment Period may not exceed the highest
rate permitted by New York law, as the same may be modified by United States law of general
applicability) until the principal hereof shall have become due and payable, and on any overdue
principal and (without duplication and to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at an annual rate equal to the
Interest Rate in effect for each such Payment Period compounded quarterly.
The amount of interest payable for any period will be computed on the basis of a 360-day year
consisting of twelve 30-day months. Notwithstanding anything to the contrary contained herein, if
any Interest Payment Date, other than on the Maturity Date, any Redemption Date (to the extent
redeemed) or the Special Redemption Date, falls on a day that is not a Business Day, then any
interest payable will be paid on, and such Interest Payment Date will be moved to, the next
succeeding Business Day, and additional interest will accrue for each day that such payment is
delayed as a result thereof. If the Maturity Date, Redemption Date or Special Redemption Date
falls on a day that is not a Business Day, then the principal, premium, if any, and/or interest
payable on such date will be paid on the next succeeding Business Day, and no additional interest
will accrue (except that, if such Business Day falls in the next calendar year, such payment will
be made on the immediately preceding Business Day). The interest installment so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Debt Security (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business on the regular
record date for such interest installment, except that interest and any Deferred Interest payable
on the Maturity Date shall be paid to the Person to whom principal is paid. Any such interest
installment not so punctually paid or duly provided for shall forthwith cease to be payable to the
Securityholder on such regular record date and may be paid to the Person in whose name this Debt
Security (or one or more Predecessor Debt Securities) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered Securityholders not less than 10 days prior to such
special record date, all as more fully provided in the Indenture.
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The principal of and interest on this Debt Security shall be payable at the office or agency
of the Trustee (or other Paying Agent appointed by the Company) maintained for that purpose in any
coin or currency of the United States of America that at the time of payment is legal tender for
payment of public and private debts; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Securityholder at such address as shall
appear in the Debt Security Register if a request for a wire transfer by such holder has not been
received by the Company or by wire transfer of immediately available funds to an account
appropriately designated by the holder hereof. Notwithstanding the foregoing, so long as the
holder of this Debt Security is the Institutional Trustee, payment of the principal of and premium,
if any, and interest on this Debt Security shall be made in immediately available funds at such
place and to such account as may be designated by the Institutional Trustee. All payments in
respect of this Debt Security shall be payable in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and private debts.
Upon submission of Notice (as defined in the Indenture) and so long as no Event of Default
pursuant to paragraphs (c), (e), (f) or (g) of Section 5.01 of the Indenture has occurred and is
continuing, the Company shall have the right under the Indenture, from time to time and without
causing an Event of Default, to defer payments of interest on the Debt Securities by extending the
Payment Period on the Debt Securities at any time and from time to time during the term of the Debt
Securities, for up to 20 consecutive quarterly periods (each such extended Payment Period, an
“Extension Period”), during which Extension Period no interest shall be due and payable (except any
Additional Interest that may be due and payable). During any Extension Period, interest will
continue to accrue on the Debt Securities, and interest on such accrued interest (such accrued
interest and interest thereon referred to herein as “Deferred Interest”) will accrue at an annual
rate equal to the Interest Rate applicable during such Extension Period, compounded quarterly from
the date such Deferred Interest would have been payable were it not for the Extension Period, to
the extent permitted by law. No Extension Period may end on a date other than an Interest Payment
Date.
At the end of any such Extension Period the Company shall pay all Deferred Interest then
accrued and unpaid on the Debt Securities; provided, however, that no Extension Period may extend
beyond the Maturity Date, Redemption Date (to the extent redeemed) or Special Redemption Date; and
provided, further, however, during any such Extension Period, the Company shall not engage in any
of the activities or transactions described on the reverse side hereof and in the Indenture. Prior
to the termination of any Extension Period, the Company may further extend such Extension Period;
provided that such period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the Maturity Date,
Redemption Date (to the extent redeemed) or Special Redemption Date. Upon the termination of any
Extension Period and upon the payment of all Deferred Interest, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest or Deferred Interest shall be
due and payable during an Extension Period, except at the end thereof, but Deferred Interest shall
accrue upon each installment of interest that would otherwise have been due and payable during such
Extension Period until such installment is paid. The Company must give the Trustee notice of its
election to begin any Extension Period or extend an Extension Period (“Notice”) not later than the
related regular record date for the relevant Interest Payment Date. The Notice shall describe why
the Company
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has elected to begin an Extension Period. The Notice shall acknowledge and affirm the
Company’s understanding that it is prohibited from issuing dividends and other distributions during
the Extension Period. Upon receipt of the Notice, the Placement Agent shall have the right, at its
sole discretion, to disclose the name of the Company, the fact that the Company has elected to
begin an Extension Period and other information that such Placement Agent, at its sole discretion,
deems relevant to the Company’s election to begin an Extension Period. The Trustee shall give
notice of the Company’s election to begin a new Extension Period to the Securityholders.
The indebtedness evidenced by this Debt Security is, to the extent provided in the Indenture,
subordinate and junior in right of payment to the prior payment in full of all Senior Indebtedness,
and this Debt Security is issued subject to the provisions of the Indenture with respect thereto.
Each holder of this Debt Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Securityholder’s behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee such Securityholder’s attorney-in-fact for any and all such
purposes. Each holder hereof, by such holder’s acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each
such Securityholder upon said provisions.
This Debt Security shall not be entitled to any benefit under the Indenture hereinafter
referred to and shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by or on behalf of the Trustee.
The Debt Securities are subject to redemption as described in more detail on the reverse side
hereof and are convertible at the option of the Securityholder into shares of Common Stock of the
Company in accordance with the provisions of Section 2.14 of the Indenture.
The provisions of this Debt Security are continued on the reverse side hereof and such
continued provisions shall for all purposes have the same effect as though fully set forth at this
place.
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IN WITNESS WHEREOF, the Company has duly executed this certificate.
FLAGSTAR BANCORP, INC. | ||||||
By | ||||||
Name | ||||||
Title |
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CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities referred to in the within mentioned Indenture.
Dated:
WILMINGTON TRUST COMPANY, as Trustee | ||||||
By | ||||||
Name | ||||||
Title |
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[FORM OF REVERSE OF DEBT SECURITY]
This Debt Security is one of a duly authorized series of Debt Securities of the Company, all
issued or to be issued pursuant to an Indenture (the “Indenture”), dated as of June 30, 2009, duly
executed and delivered between the Company and Wilmington Trust Company, as Trustee (the
“Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Debt Securities (referred to herein as the “Debt
Securities”) of which this Debt Security is a part. The summary of the terms of this Debt Security
contained herein does not purport to be complete and is qualified by reference to the Indenture.
The Debt Securities are limited in aggregate principal amount as specified in the Indenture.
Upon the occurrence and continuation of a Tax Event, an Investment Company Event or a Capital
Treatment Event (each a “Special Event”), this Debt Security may become due and payable, in whole
or in part, at any time, within 90 days following the occurrence of such Tax Event, Investment
Company Event or Capital Treatment Event (the “Special Redemption Date”), as the case may be, at
the Special Redemption Price.
The Company shall also have the right to redeem this Debt Security at the option of the
Company, in whole or in part, on January 31, 2011 and on any March 15, June 15, September 15 or
December 15 on or after January 31, 2011 (each a “Redemption Date”), at the Redemption Price.
Any redemption pursuant to either of the two preceding paragraphs will be made, subject to the
receipt by the Company of prior approval from any regulatory authority with jurisdiction over the
Company if such approval is then required under applicable capital guidelines or policies of such
regulatory authority, upon not less than 30 days’ nor more than 60 days’ notice. If the Debt
Securities are only partially redeemed by the Company, the Debt Securities will be redeemed pro
rata or by lot or by any other method utilized by the Trustee.
“Redemption Price” means 100% of the principal amount of the Debt Securities being redeemed,
plus accrued and unpaid interest (including any Deferred Interest) on such Debt Securities to the
Redemption Date.
“Special Redemption Price” means 100% of the principal amount of the Debt Securities being
redeemed, plus accrued and unpaid interest (including any Deferred Interest) on such Debt
Securities to the Special Redemption Date.
In the event of redemption of this Debt Security in part only, a new Debt Security or Debt
Securities for the unredeemed portion hereof will be issued in the name of the Securityholder
hereof upon the cancellation hereof.
In certain cases where an Event of Default pursuant to paragraphs (c), (e), (f) or (g) of
Section 5.01 of the Indenture shall have occurred and be continuing, the principal of all of the
Debt Securities may be declared, and, in certain cases, shall ipso facto become, due and payable,
and upon such declaration of acceleration shall become due and payable, in each case, in the
manner, with the effect and subject to the conditions provided in the Indenture.
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The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the holders of not less than a majority in aggregate principal amount of the Debt Securities at the
time outstanding affected thereby, as specified in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Securityholders; provided, however, that no such supplemental indenture shall,
among other things, without the consent of the holders of each Debt Security then outstanding and
affected thereby (i) change the Maturity Date of any Debt Security, or reduce the principal amount
thereof or any redemption premium thereon, or reduce the rate (or manner of calculation of the
rate) or extend the time of payment of interest thereon, or reduce (other than as a result of the
maturity or earlier redemption of any such Debt Security in accordance with the terms of the
Indenture and such Debt Security) or increase the aggregate principal amount of Debt Securities
then outstanding, or change any of the redemption provisions, or make the principal thereof or any
interest or premium thereon payable in any coin or currency other than United States Dollars, or
impair or affect the right of any Securityholder to institute suit for the payment thereof, or (ii)
reduce the aforesaid percentage of Debt Securities, the holders of which are required to consent to
any such supplemental indenture.
The Indenture also contains provisions permitting the holders of a majority in aggregate
principal amount of the Debt Securities at the time outstanding on behalf of all of the
Securityholders, to waive (or modify any previously granted waiver of) any past default in the
performance of any of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except (a) a default in payments due in respect of any of the Debt
Securities, (b) in respect of covenants or provisions of the Indenture which cannot be modified or
amended without the consent of the holder of each Debt Security affected, or (c) in respect of the
covenants of the Company relating to its ownership of Common Securities of the Trust. Any such
consent or waiver by the registered holder of this Debt Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Securityholder and upon all future holders and
owners of this Debt Security and of any Debt Security issued in exchange herefor or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or not any notation of
such consent or waiver is made upon this Debt Security.
The Debt Securities shall be convertible into Common Stock of the Company in accordance with
the provisions of Section 2.14 of the Indenture.
No reference herein to the Indenture and no provision of this Debt Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of and premium, if any, and interest, including Deferred Interest, on this
Debt Security at the time and place and at the rate and in the money herein prescribed.
The Company has agreed that if Debt Securities are initially issued to the Trust or a trustee
of such Trust in connection with the issuance of Trust Securities by the Trust (regardless of
whether Debt Securities continue to be held by such Trust) and (a) there shall have occurred and be
continuing an Event of Default; (b) the Company shall be in default with respect to its payment of
any obligations under the Capital Securities Guarantee; or (c) the Company shall have given notice
of its election to defer payments of interest on the Debt Securities by extending
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the Payment Period as provided herein and such period, or any extension thereof, shall be
continuing, then the Company shall not (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of the Company’s
capital stock; or (ii) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari passu in all respects
with or junior in interest to the Debt Securities or (iii) make any payment under any guarantees of
the Company that rank pari passu in all respects with or junior in interest to the Capital
Securities Guarantee (other than (A) repurchases, redemptions or other acquisitions of shares of
capital stock of the Company (I) in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers, directors or
consultants, (II) in connection with a dividend reinvestment or stockholder stock purchase plan or
(III) in connection with the issuance of capital stock of the Company (or securities convertible
into or exercisable for such capital stock), as consideration in an acquisition transaction entered
into prior to the occurrence of (i), (ii) or (iii) above, (B) as a result of any exchange,
reclassification, combination or conversion of any class or series of the Company’s capital stock
(or any capital stock of a subsidiary of the Company) for any class or series of the Company’s
capital stock or of any class or series of the Company’s indebtedness for any class or series of
the Company’s capital stock, (C) the purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (D) any declaration of a dividend in connection with any
stockholder’s rights plan, or the issuance of rights, stock or other property under any
stockholder’s rights plan, or the redemption or repurchase of rights pursuant thereto, or (E) any
dividend in the form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such stock and any cash
payments in lieu of fractional shares issued in connection therewith; or (F) payments under the
Capital Securities Guarantee).
As provided in the Indenture and subject to the transfer restrictions and limitations as may
be contained herein and therein from time to time, this Debt Security is transferable by the
registered holder hereof on the Debt Security Register of the Company, upon surrender of this Debt
Security. Upon due presentment for registration of transfer of any Debt Security at the Principal
Office of the Trustee or at any office or agency of the Trustee maintained for such purpose as
provided in Section 3.02 of the Indenture, the Company shall execute, the Company or the Trustee
shall register and the Trustee or the Authenticating Agent shall authenticate and make available
for delivery in the name of the transferee or transferees a new Debt Security for a like aggregate
principal amount. All Debt Securities presented for registration of transfer or for exchange or
payment shall (if so required by the Company or the Trustee or the Authenticating Agent) be duly
endorsed by, or be accompanied by a written instrument or instruments of transfer in form
satisfactory to, the Company and the Trustee or the Authenticating Agent duly executed by the
registered holder hereof or such Securityholder’s attorney duly authorized in writing. No service
charge shall be made for any exchange or registration of transfer of Debt Securities, but the
Company or the Trustee may require payment of a sum sufficient to cover any tax, fee or other
governmental charge that may be imposed in connection therewith.
Prior to due presentment for registration of transfer of this Debt Security, the Company, the
Trustee, any Authenticating Agent, any Paying Agent, any transfer agent and the Debt
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Security Registrar may deem and treat the Person in whose name such Debt Security shall be
registered upon the Debt Security Register to be, and may treat such Securityholder as, the
absolute owner of such Debt Security (whether or not such Debt Security shall be overdue and
notwithstanding any notice of ownership or writing hereon) for the purpose of receiving payment of
or on account of the principal of, premium, if any, and interest on this Debt Security and for all
other purposes; and neither the Company nor the Trustee nor any Authenticating Agent nor any Paying
Agent nor any transfer agent nor any Debt Security Registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being or upon such Securityholder’s
order shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for moneys payable upon any such Debt Security.
No recourse for the payment of the principal of or premium, if any, or interest on this Debt
Security, or for any claim based hereon or otherwise in respect hereof, or based or in respect of
the Indenture, and no recourse under or upon any obligation, covenant or agreement of the Company
in the Indenture or in any supplemental indenture, or in any such Debt Security, or because of the
creation of any indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, officer or director, as such, past, present or future, of the Company or of
any successor Person of the Company, either directly or through the Company or of any predecessor
or successor Person of the Company, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise, it being expressly understood that
all such liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of the Indenture and the issue of the Debt Securities.
The Debt Securities are issuable only in registered certificated form without coupons. As
provided in the Indenture and subject to certain limitations herein and therein set forth, Debt
Securities are exchangeable for a like aggregate principal amount of Debt Securities of a different
authorized denomination, as requested by the Securityholder surrendering the same.
Capitalized terms used and not defined in this Debt Security shall have the meanings assigned
in the Indenture dated as of the date of original issuance of this Debt Security between the
Trustee and the Company.
THE INDENTURE AND THE DEBT SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF (OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
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EXHIBIT B
FORM OF CERTIFICATE TO TRUSTEE
Pursuant to Section 3.05 of the Indenture between Flagstar Bancorp, Inc., as the Company (the
“Company”), and Wilmington Trust Company, as Trustee, dated as of June 30, 2009 (the “Indenture”),
the undersigned hereby certifies as follows:
1. In my capacity as an officer of the Company, I would normally have knowledge of any default
by the Company during the last fiscal year in the performance of any covenants of the Company
contained in the Indenture.
2. To my knowledge, the Company is not in default in the performance of any covenants
contained in the Indenture, or, alternatively: I am aware of the default(s) in the performance of
covenants in the Indentures, as specified below.
Capitalized terms used herein, and not otherwise defined herein, have the respective meanings
ascribed thereto in the Indenture.
IN WITNESS WHEREOF, the undersigned has executed this Certificate.
Date: ,
By | ||||||
Name | ||||||
Title |