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EXHIBIT 4.1
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SOUTHSIDE BANCSHARES, INC.
AND
U.S. TRUST COMPANY OF TEXAS, N.A.,
AS TRUSTEE
INDENTURE
____% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
DUE JUNE 30, 2028
DATED AS OF MAY __, 1998
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ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Definition of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE OF THE DEBENTURES . . . . . . . . . . . 8
Section 2.1 Designation and Principal Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.2 Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.3 Form and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.4 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.5 Execution and Authentications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 2.6 Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.7 Temporary Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.7A Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.8 Mutilated, Destroyed, Lost or Stolen Debentures . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.9 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.10 Benefit of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.11 Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.12 Right of Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.13 CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE III - REDEMPTION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.2 Special Event Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.3 Optional Redemption by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.5 Payment Upon Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 3.6 No Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV - EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.1 Extension of Interest Payment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.2 Notice of Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.3 Limitation on Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE V - PARTICULAR COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.1 Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.2 Maintenance of Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.3 Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.4 Appointment to Fill Vacancy in Office of Trustee . . . . . . . . . . . . . . . . . . . . . 20
Section 5.5 Compliance with Consolidation Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.6 Limitation on Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.7 Covenants as to the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Section 5.8 Covenants as to Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VI - DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE . . . . . . . . . . . . . . . . . . . 21
Section 6.1 Company to Furnish Trustee Names and Addresses of Debentureholders . . . . . . . . . . . . . 21
Section 6.2 Preservation of Information Communications with Debentureholders . . . . . . . . . . . . . 22
Section 6.3 Reports by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.4 Reports by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.5 Statements as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VII - REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . 23
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 7.2 Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . 25
Section 7.3 Application of Moneys Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.4 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 7.5 Rights and Remedies Cumulative; Delay or Omission not Waiver . . . . . . . . . . . . . . . 27
Section 7.6 Control by Debentureholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.7 Undertaking to Pay Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 7.8 Direct Action by Holders of Preferred Securities . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VIII - FORM OF DEBENTURE AND ORIGINAL ISSUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 8.1 Form of Debenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 8.2 Original Issue of Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IX - CONCERNING THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.1 Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 9.2 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.3 Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 9.4 Trustee not Responsible for Recitals, etc. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 9.5 May Hold Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.6 Moneys Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.7 Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.8 Reliance on Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.9 Disqualification: Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.10 Corporate Trustee Required Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.11 Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . 33
Section 9.12 Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 9.13 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . 35
Section 9.14 Preferential Collection of Claims Against the Company . . . . . . . . . . . . . . . . . . . 35
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ARTICLE X - CONCERNING THE DEBENTUREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.1 Evidence of Action by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 10.2 Proof of Execution by Debentureholders . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.3 Who may be Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.4 Certain Debentures Owned by Company Disregarded . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.5 Actions Binding on Future Debentureholders . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XI - SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 11.1 Supplemental Indentures Without the Consent of Debentureholders . . . . . . . . . . . . . . 37
Section 11.2 Supplemental Indentures with Consent of Debentureholders . . . . . . . . . . . . . . . . . 38
Section 11.3 Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 11.4 Debentures Affected by Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.5 Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XII - SUCCESSOR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 12.1 Company may Consolidate, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 12.2 Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 12.3 Evidence of Consolidation, etc. to Trustee . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE XIII - SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 13.1 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 13.2 Discharge of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 13.3 Deposited Moneys to be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 13.4 Payment of Moneys Held by Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 13.5 Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XIV - IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS . . . . . . . . . . . . . . . . . . . . 42
Section 14.1 No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XV - MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 15.1 Effect on Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 15.2 Actions by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 15.3 Surrender of Company Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 15.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 15.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 15.6 Treatment of Debentures as Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 15.7 Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 15.8 Payments on Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.9 Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 15.12 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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Section 15.13 Acknowledgment of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XVI - SUBORDINATION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 16.1 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 16.2 Default on Senior Debt or Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 16.3 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 16.4 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 16.5 Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 16.6 Notice by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 16.7 Rights of the Trustee; Holders of Senior Indebtedness . . . . . . . . . . . . . . . . . . . 48
Section 16.8 Subordination may not be Impaired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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CROSS-REFERENCE TABLE
Section of Trust Indenture Act of 1939, as amended Section of Indenture
310(a) 9.10
310(b) 9.9
9.11
310(c) N/A
311(a) 9.14
311(b) 9.14
311(c) N/A
312(a) 6.1
6.2(a)
312(b) 6.2(c)
312(c) 6.2(c)
313(a) 6.4(a)
313(b) 6.4(b)
313(c) 6.4(a)
6.4(b)
313(d) 6.4(c)
314(a) 6.3(a)
314(b) N/A
314(c) 15.7
314(d) N/A
314(e) 15.7
314(f) N/A
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Section of Trust Indenture Act of 1939, as amended Section of Indenture
315(a) 9.1(a)
9.3
315(b) 9.2
315(c) 9.1(a)
315(d) 9.1(b)
315(e) 7.7
316(a) 1.1
7.6
316(b) 7.4(b)
316(c) 10.1(b)
317(a) 7.2
317(b) 5.3
318(a) 15.9
Note: This Cross-Reference Table does not constitute part of this Indenture
and shall not affect the interpretation of any of its terms or provisions.
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INDENTURE
INDENTURE, dated as of May __, 1998, between SOUTHSIDE BANCSHARES,
INC., a Texas corporation (the "Company"), and U.S. TRUST COMPANY OF TEXAS,
N.A., a trust company organized under the laws of the United States (the
"Trustee").
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured securities to be known as its ____% Junior Subordinated
Deferrable Interest Debentures due June 30, 2028 (referred to as the
"Debentures"), the form and substance of the Debentures and the terms,
provisions and conditions thereof to be set forth as provided in this
Indenture; and
WHEREAS, Southside Capital Trust I, a Delaware statutory business
trust (the "Trust"), has offered to the public up to $23 million aggregate
liquidation amount of its Preferred Securities (as defined herein) and proposes
to invest the proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Company of $________ aggregate
liquidation amount of its Common Securities (as defined herein), in $________
aggregate principal amount of the Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this Indenture; and
WHEREAS, all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Indenture have been duly authorized in all respects, and
WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Debentures by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of the Debentures and
intending to be legally bound hereby:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITION OF TERMS.
The terms defined in this Section (except as in this Indenture
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 and shall include the plural
as well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act, or that are by reference in the Trust
Indenture Act defined in the Securities Act (except as herein otherwise
expressly provided or unless the
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context otherwise requires), shall have the meanings assigned to such terms in
the Trust Indenture Act and in the Securities Act as in force at the date of
the execution of this instrument. All accounting terms used herein and not
expressly defined shall have the meanings assigned to such terms in accordance
with generally accepted accounting principles ("GAAP") as in effect at the time
of computation.
"Additional Interest" shall have the meaning set forth in SECTION 2.4.
"Administrative Trustees" shall have the meaning set forth in the
Trust Agreement.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified Person is a
general partner; (e) any officer or director of the specified Person; and (f)
if the specified Person is an individual, any entity of which the specified
Person is an executive officer, director or general partner.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security, in each case
to the extent applicable to such transaction and as in effect from time to
time.
"Authenticating Agent" means an authenticating agent with respect to
the Debentures appointed by the Trustee pursuant to SECTION 2.11.
"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 of the Company or
any duly authorized committee of such Board.
"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.
"Business Day" means, with respect to the Debentures, any day other
than a Saturday or a Sunday or a day on which federal or state banking
institutions in the Borough of Manhattan, the City of New York, or the State of
Delaware are authorized or required by law, executive order or regulation to
close, or a day on which the Corporate Trust Office of the Trustee or the
Property Trustee is closed for business.
"Capital Treatment Event" means the receipt by the Trust of an Opinion
of Counsel to the effect that, as a result of any amendment to, or change
(including any proposed change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision thereof or therein, or as a
result of any official or administrative pronouncement or action or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such proposed change pronouncement, action or decision
is announced on or after the date of original issuance of the Preferred
Securities under the Trust Agreement, there is more than an insubstantial risk
that the Preferred Securities would not constitute "Tier 1 Capital" (or the
then equivalent thereof) applied as if the Company (or its successor) were a
bank holding
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company for purposes of the capital adequacy guidelines of the Federal Reserve
(or any successor regulatory authority with jurisdiction over bank holding
companies), or any capital adequacy guidelines as then in effect and applicable
to the Company.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the principal accounting officer, the
treasurer or any vice president of the Company. The Certificate need not
comply with the provisions of SECTION 15.7.
"Change in 1940 Act Law" shall have the meaning set forth in the
definition of "Investment Company Event."
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with the Preferred Securities; provided,
however, that upon the occurrence of an Event of Default, the rights of holders
of Common Securities to payment in respect of (i) distributions and (ii)
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Company" means Southside Bancshares, Inc., a corporation duly
organized and existing under the laws of the State of Texas, and, subject to
the provisions of ARTICLE XII, shall also include its successors and assigns.
"Compounded Interest" shall have the meaning set forth in SECTION 4.1.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 0000 Xxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000, Attention: Corporate Trust Trustee
Administration.
"Coupon Rate" shall have the meaning set forth in SECTION 2.4.
"Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Debentures" shall have the meaning set forth in the Recitals hereto.
"Debentureholder," "holder of Debentures," "registered holder," or
other similar term, means the Person or Persons in whose name or names a
particular Debenture shall be registered on the books of the Company or the
Trustee kept for that purpose in accordance with the terms of this Indenture.
"Debenture Register" shall have the meaning set forth in SECTION
2.6(B).
"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every
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reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; (vi) all indebtedness of such Person,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, for claims in respect of derivative products, including interest
rate, foreign exchange rate and commodity forward contracts, options, swaps and
similar arrangements; (vii) every obligation of the type referred to in
clauses (i) through (v) of another Person and all dividends of another Person
the payment of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor or otherwise.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in SECTION 4.1.
"Depositary" means, with respect to the Debentures issuable or issued
in whole or in part in the form of one or more Global Securities, the Person
designated as Depositary by the Company pursuant to SECTION 2.3. The initial
Depositary shall be DTC.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Trust Agreement and the Debentures held by the Property Trustee are to
be distributed to the holders of the Trust Securities issued by the Trust pro
rata in accordance with the Trust Agreement.
"DTC" shall mean The Depository Trust Company.
"Event of Default" means, with respect to the Debentures, any event
specified in SECTION 7.1, which has continued for the period of time, if any,
and after the giving of the notice, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, or any
successor statute, in each case as amended from time to time.
"Extended Interest Payment Period" shall have the meaning set forth in
SECTION 4.1.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"GAAP" means such accounting principles as are generally accepted in
the United States at the time of any computation required hereunder.
"Global Security" means a Debenture evidencing all or part of the
Debentures, issued to the Depositary or its nominee, and registered in the name
of such Depositary or its nominee.
"Governmental Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged; or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by
the United States that, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any such Governmental Obligation
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or a specific payment of principal of or interest on any such Governmental
Obligation held by such custodian for the account of the holder of such
depositary receipt; provided, however, that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depositary receipt from any amount received by the custodian
in respect of the Governmental Obligation or the specific payment of principal
of or interest on the Governmental Obligation evidenced by such depositary
receipt.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date," when used with respect to any installment of
interest on the Debentures, means the date specified in the Debenture or in a
Board Resolution or in an indenture supplemental hereto with respect to the
Debentures as the fixed date on which an installment of interest with respect
to the Debentures is due and payable.
"Investment Company Act" means the Investment Company Act of 1940, and
any statute successor thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or shall be considered an
"investment company" that is required to be registered under the Investment
Company Act, which Change in 1940 Act Law becomes effective on or after the
date of original issuance of the Preferred Securities under the Trust
Agreement.
"Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional Interest,
if any as set forth in SECTION 2.2.
"Ministerial Action" shall have the meaning set forth in SECTION 3.2.
"Officers' Certificate" means a certificate signed by the President or
a Vice President and by the Treasurer, an Assistant Treasurer, the Controller,
an Assistant Controller, the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee. Any Officers' Certificate delivered with respect
to compliance with a condition or covenant provided for in this Indenture shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary
to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
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(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means an opinion in writing of independent legal
counsel experienced in such matters as being opined upon, that is delivered to
the Trustee in accordance with the terms hereof.
"Outstanding" when used with reference to the Debentures, means,
subject to the provisions of SECTION 10.4, as of any particular time, all
Debentures theretofore authenticated and delivered by the Trustee under this
Indenture, except (a) Debentures theretofore canceled by the Trustee or any
paying agent, or delivered to the Trustee or any paying agent for cancellation
or that have previously been canceled; (b) Debentures or portions thereof for
the payment or redemption of which moneys or Governmental Obligations 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 Debentures or portions of such
Debentures are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article III or provision
satisfactory to the Trustee shall have been made for giving such notice; (c)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of SECTION 2.6 and (d)
Debentures paid pursuant to SECTION 2.8.
"Person" means any individual, corporation, partnership, joint
venture, trust, joint stock company, unincorporated organization or government
or any agency or political subdivision thereof.
"Place of Payment" means the place or places where the principal of
and interest on the Debentures are payable in accordance with the terms of this
Indenture.
"Predecessor Debenture" means every previous Debenture evidencing all
or a portion of the same debt as that evidenced by such particular Debenture;
and, for the purposes of this definition, any Debenture authenticated and
delivered under SECTION 2.8 in lieu of a lost, destroyed or stolen Debenture
shall be deemed to evidence the same debt as the lost, destroyed or stolen
Debenture.
"Preferred 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 of an Event of Default, the
rights of holders of Common Securities to payment in respect of distributions
and payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means the Preferred Securities
Guarantee, as amended from time to time, by and between the Company, as
guarantor, and the Trustee, executed and delivered for the benefit of the
holders of the Preferred Securities.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Responsible Officer" when used with respect to the Trustee means any
vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, any corporate trust officer or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.
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"Securities Act" means the Securities Act of 1933, or any successor
statute, in each case as amended from time to time.
"Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures; provided, however, that Senior
Debt shall not be deemed to include (i) any Debt of the Company which when
incurred and without respect to any election under Section 1111 (b) of the
United States Bankruptcy Code of 1978, as amended, was without recourse to the
Company; (ii) any Debt of the Company to any of its subsidiaries; and (iii) any
Debt to any employee of the Company.
"Senior Indebtedness" shall have the meaning set forth in SECTION
16.1.
"Special Event" means a Tax Event, an Investment Company Event or a
Capital Treatment Event.
"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other Debt of the Company (other than the Debentures), except that
Subordinated Debt shall not include Debentures sold by the Company to the
Trust.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be 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; (ii) any general
partnership, joint venture, trust or similar entity, at least a majority of
whose outstanding partnership or similar interests 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 (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel,
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 or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after the date of issuance of the Preferred Securities under
the Trust Agreement, there is more than an insubstantial risk that (i) the
Trust is, or shall be within 90 days after the date of such Opinion of Counsel,
subject to United States federal income tax with respect to income received or
accrued on the Debentures; (ii) interest payable by the Company on the
Debentures is not, or within 90 days after the date of such Opinion of Counsel
shall not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes; or (iii) the Trust is, or shall be within 90 days
after the date of such Opinion of Counsel, subject to more than a de minimis
amount of other taxes, duties, assessments or other governmental charges. The
Trust or the Company shall request and receive such Opinion of Counsel with
regard to such matters within a reasonable period of time after the Trust or
the Company shall have become aware of the possible occurrence of any of the
events described in clauses (i) through (iii) above.
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"Trust" means Southside Capital Trust I, a Delaware statutory business
trust created by the Trust Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated March __, 1998, of the Trust, as amended, modified or supplemented in
accordance with the applicable provisions thereof, among the trustees of the
Trust named therein, the Company, as depositor, and the holders from time to
time of undivided beneficial ownership interests in the assets of the Trust,
including all exhibits thereto, including, for all purposes of the Trust
Agreement, and any such modification, amendment or supplement, the provisions
of the Trust Indenture Act that are deemed to be a part of and govern the Trust
Agreement and any such modification, amendment or supplement, respectively.
"Trustee" means U.S. Trust Company of Texas, N.A. and, subject to
the provisions of ARTICLE IX, shall also include its successors and assigns,
and if at any time there is more than one Person acting in such capacity
hereunder, "Trustee" shall mean each such Person.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, subject to the provisions of SECTIONS 11.1, 11.2, and 12.1 and any
statute successor thereto, in each case as amended from time to time.
"Trust Securities" means the Common Securities and Preferred
Securities, collectively.
"Voting Stock" as applied to stock of any Person, 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.
ARTICLE II
ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION
AND EXCHANGE OF THE DEBENTURES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
The Company hereby authorizes Debentures designated the "___% Junior
Subordinated Deferrable Interest Debentures due June 30, 2028," limited in
aggregate principal amount to $___________ which amount shall be as set forth
in any written order of the Company for the authentication and delivery of
Debentures pursuant to SECTION 2.5.
SECTION 2.2 MATURITY.
The Maturity Date shall be June 30, 2028.
SECTION 2.3 FORM AND PAYMENT.
The Debentures initially issued to the Property Trustee of the Trust
shall be issued in fully registered certificated form without interest coupons.
Principal and interest on the Debentures issued in certificated form shall be
payable, the transfer of such Debentures shall be registrable and such
Debentures shall be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Trustee; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the holder at such address as shall appear in the Debenture Register or by wire
transfer to an account
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maintained by the holder as specified in the Debenture Register, provided that
the holder provides proper wire transfer instructions by the regular record
date. Notwithstanding the foregoing, so long as the holder of any Debentures
is the Property Trustee, the payment of the principal of and interest
(including Compounded Interest and Additional Interest, if any) on such
Debentures held by the Property Trustee shall be made at such place and to such
account as may be designated by the Property Trustee.
In connection with the distribution of the Debentures to the holders
of the Preferred Securities upon a Dissolution Event, Debentures shall be
issuable in whole or in part in the form of one or more Global Securities
pursuant to SECTION 2.7A and, in such case, the Depositary for such Global
Securities shall be DTC.
SECTION 2.4 INTEREST.
(a) Each Debenture shall bear interest at the rate of ____% per
annum (the "Coupon Rate") from the original date of issuance 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)
on any overdue installment of interest at the Coupon Rate, compounded
quarterly, payable (subject to the provisions of ARTICLE IV) quarterly in
arrears on March 31, June 30, September 30, and December 31 of each year (each,
an "Interest Payment Date," commencing on June 30, 1998), to the Person in
whose name such Debenture or any Predecessor Debenture is registered, at the
close of business on the regular record date for such interest installment,
next preceding such Interest Payment Date.
(b) The amount of interest payable for any period shall be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
shall be computed on the basis of the actual number of days elapsed in such
period. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
shall be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
(c) If, at any time while the Property Trustee is the holder of
any Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or other governmental charges of whatever nature (other
than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Company shall pay as additional interest
("Additional Interest") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges shall be equal to the amounts the
Trust and the Property Trustee would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
SECTION 2.5 EXECUTION AND AUTHENTICATIONS.
(a) The Debentures shall be signed on behalf of the Company by its
Chief Executive Officer, President or one of its Vice Presidents, under its
corporate seal attested by its Secretary or one of its Assistant Secretaries.
Signatures may be in the form of a manual or facsimile signature. The Company
may use the facsimile signature of any Person who shall have been a Chief
Executive Officer, President or Vice President thereof, or of any Person who
shall have been a Secretary or Assistant Secretary thereof, notwithstanding the
fact that at the time the Debentures shall be authenticated and delivered or
disposed of such Person shall have
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ceased to be the Chief Executive Officer, President or a Vice President, or the
Secretary or an Assistant Secretary, of the Company. The seal of the Company
may be in the form of a facsimile of such seal and may be impressed, affixed,
imprinted or otherwise reproduced on the Debentures. The Debentures may
contain such notations, legends or endorsements required by law, stock exchange
rule or usage. Each Debenture shall be dated the date of its authentication by
the Trustee.
(b) A Debenture shall not be valid until authenticated manually by
an authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures executed by the
Company to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Debentures signed by its
Chief Executive Officer, President or any Vice President and its Secretary or
any Assistant Secretary, and the Trustee in accordance with such written order
shall authenticate and make available for delivery such Debentures.
(d) In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to SECTION 9.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of
this Indenture.
(e) The Trustee shall not be required to authenticate such
Debentures if the issue of such Debentures pursuant to this Indenture shall
affect the Trustee's own rights, duties or immunities under the Debentures and
this Indenture or otherwise in a manner that is not reasonably acceptable to
the Trustee.
SECTION 2.6 REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Debentures may be exchanged upon presentation thereof at the
office or agency of the Company designated for such purpose, for other
Debentures and for a like aggregate principal amount, upon payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
all as provided in this Section. In respect of any Debentures so surrendered
for exchange, the Company shall execute, the Trustee shall authenticate and
such office or agency shall deliver in exchange therefor the Debenture or
Debentures that the Debentureholder making the exchange shall be entitled to
receive, bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose or such other location designated by the
Company a register or registers (herein referred to as the "Debenture
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall register the Debentures and the transfers of
Debentures as in this Article provided and which at all reasonable times shall
be open for inspection by the Trustee. The registrar for the purpose of
registering Debentures and transfer of Debentures as herein provided shall be
appointed as authorized by Board Resolution (the "Debenture Registrar"). Upon
surrender for transfer of any Debenture at the office or agency of the Company
designated for such purpose, the Company shall execute, the Trustee shall
authenticate and such office or agency shall make available for delivery in the
name of the transferee or transferees a new Debenture or Debentures for a like
aggregate principal amount. All Debentures presented or surrendered for
exchange or registration of transfer, as provided in this Section, shall be
accompanied (if so required by the Company or
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the Debenture Registrar) by a written instrument or instruments of transfer, in
form satisfactory to the Company or the Debenture Registrar, duly executed by
the registered holder or by such holder's duly authorized attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Debentures, or issue of new Debentures in case of
partial redemption, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge in relation thereto, other than
exchanges pursuant to SECTION 2.7, SECTION 3.5(B) and SECTION 11.4 not
involving any transfer.
(d) The Company shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of less than all the Outstanding Debentures and ending at the close
of business on the day of such mailing; nor (ii) to register the transfer of or
exchange any Debentures or portions thereof called for redemption.
SECTION 2.7 TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Company may
execute, and the Trustee shall authenticate and deliver, temporary Debentures
(printed, lithographed, or typewritten). Such temporary Debentures shall be
substantially in the form of the definitive Debentures in lieu of which they
are issued, but with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be determined by the Company.
Every temporary Debenture shall be executed by the Company and be authenticated
by the Trustee upon the same conditions and in substantially the same manner,
and with like effect, as the definitive Debentures. Without unnecessary delay
the Company shall execute and shall furnish definitive Debentures and thereupon
any or all temporary Debentures may be surrendered in exchange therefor
(without charge to the holders), at the office or agency of the Company
designated for such purpose, and the Trustee shall authenticate and such office
or agency shall deliver in exchange for such temporary Debentures an equal
aggregate principal amount of definitive Debentures, unless the Company advises
the Trustee to the effect that definitive Debentures need not be executed and
furnished until further notice from the Company. Until so exchanged, the
temporary Debentures shall be entitled to the same benefits under this
Indenture as definitive Debentures authenticated and delivered hereunder.
SECTION 2.7A GLOBAL SECURITIES.
(a) Debentures distributed to holders of book-entry Preferred
Securities upon the dissolution of the Trust shall be distributed in the form
of one or more Global Securities registered in the name of the Depositary or
its nominee, and deposited with the Securities Registrar, as custodian for such
Depositary, or with such Depositary, for credit by the Depositary to the
respective accounts of the beneficial owners of the Debentures represented
thereby (or such other accounts as they may direct). Debentures distributed to
holders of Preferred Securities other than book- entry Preferred Securities
upon the dissolution of the Trust shall not be issued in the form of a Global
Security or any other form intended to facilitate book-entry trading in
beneficial interests in such Debentures.
(b) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Global Security for all purposes of this Indenture.
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(c) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Debentures registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary advises the Trustee in writing that
such Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Company is unable to locate a qualified successor, (ii) the Company executes
and delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary, or (iii) there shall
have occurred and be continuing an Event of Default.
(d) If any Global Security is to be exchanged for other Debentures
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Securities Registrar for exchange or cancellation as
provided in this Article. If any Global Security is to be exchanged for other
Debentures or canceled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation
as provided in this Article or (ii) the principal amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such Debenture to be
so exchanged for a beneficial interest therein, as the case may be, by means of
an appropriate adjustment made on the records of the Securities Registrar,
whereupon the Trustee, in accordance with Applicable Procedures, shall instruct
the Depositary or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global
Security by the Depositary, accompanied by registration instructions, the
Trustee shall, subject to SECTION 2.6 and as otherwise provided in this
Article, authenticate and make available for delivery any Debentures issuable
in exchange for such Global Security (or any portion thereof) in accordance
with the instructions of the Depositary. The Trustee shall not be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions.
(e) Every Debenture authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Article, SECTION 3.5 or ARTICLE IX or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Debenture is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
(f) The Depositary or its nominee, as the registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under this Indenture and the Debenture, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only
through, records maintained by the Depositary or its nominee or agent. Neither
the Trustee nor the Securities Registrar shall have any liability in respect of
any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global
Security shall be exercised only through the Depositary and shall be limited to
those established by law and agreements between such owners and the Depositary
and/or its Agent Members.
(h) If (i) the Depositary notifies the Company that it is
unwilling or unable to continue as a depositary for such Global Security and no
successor
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depositary shall have been appointed within 90 days by the Company, (ii) the
Depositary, at any time, ceases to be a clearing agency registered under the
Exchange Act at which time the Depositary is required to be so registered to
act as such depositary and no successor depositary shall have been appointed
within 90 days by the Company, (iii) the Company, in its sole discretion,
determines that such Global Security shall be so exchangeable or (iv) there
shall have occurred and be continuing an Event of Default with respect to such
Debentures, as the case may be, the Company will execute, and, subject to
ARTICLE II of this Indenture, the Trustee, upon written notice from the Company
and receipt of an Officers' Certificate, will authenticate and deliver the
Debentures in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security. In
addition, upon an Event of Default that has occurred and is continuing or in
the event the Company determines that the Debentures shall no longer be
represented by a Global Security, the Company will execute, and subject to
SECTION 2.5 of this Indenture, the Trustee, upon receipt of an Officers'
Certificate evidencing such determination by the Company, will authenticate and
make available for delivery, the Debentures in definitive registered form
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for
such Global Security. Upon the exchange of the Global Security for such
Debentures in definitive registered form without coupons, in authorized
denominations, the Global Security shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Security shall be registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee in writing. The Trustee
shall deliver such Debentures to the Depositary for delivery to the Persons in
whose names such Debentures are so registered.
SECTION 2.8 MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.
(a) In case any temporary or definitive Debenture shall become
mutilated or be destroyed, lost or stolen, the Company (subject to the next
succeeding sentence) shall execute, and upon the Company's request the Trustee
(subject as aforesaid) shall authenticate and make available for delivery, a
new Debenture bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated Debenture, or in lieu of and in substitution
for the Debenture so destroyed, lost or stolen. In every case the applicant
for a substituted Debenture 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 the applicant's Debenture and of the ownership
thereof. The Trustee may authenticate any such substituted Debenture and make
available for delivery the same upon the written request or authorization of
any officer of the Company. Upon the issuance of any substituted Debenture,
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 (including the fees and expenses of the Trustee) connected therewith.
In case any Debenture that has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing
a substitute Debenture, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debenture) if the applicant
for such payment shall furnish to the Company and the Trustee such security or
indemnity as they may require to save them harmless, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debenture and of the
ownership thereof.
(b) Every replacement Debenture issued pursuant to the provisions
of this Section shall constitute an additional contractual obligation of the
Company whether or not the mutilated, destroyed, lost or stolen Debenture shall
be found at any time, or be enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debentures duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude
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(to the extent lawful) 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 2.9 CANCELLATION.
All Debentures surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or
any paying agent, be delivered to the Trustee for cancellation or if
surrendered to the Trustee, shall be canceled by it, and no Debentures shall be
issued in lieu thereof except as expressly required or permitted by any of the
provisions of this Indenture. On request of the Company at the time of such
surrender, the Trustee shall deliver to the Company canceled Debentures held by
the Trustee. In the absence of such request the Trustee may dispose of
canceled Debentures in accordance with its standard procedures. If the Company
shall otherwise acquire any of the Debentures, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Debentures unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.10 BENEFIT OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or implied,
shall give or be construed to give to any Person, other than the parties hereto
and the holders of the Debentures (and, with respect to the provisions of
ARTICLE XVI, the holders of Senior Indebtedness) any legal or equitable right,
remedy or claim under or in respect of this Indenture, or under any covenant,
condition or provision herein contained. All such covenants, conditions, and
provisions are for the sole benefit of the parties hereto and of the holders of
the Debentures (and, with respect to the provisions of ARTICLE XVI, the holders
of Senior Indebtedness).
SECTION 2.11 AUTHENTICATING AGENT.
(a) So long as any of the Debentures remain Outstanding the
Trustee shall have the right to appoint an Authenticating Agent for any or all
such Debentures. The Authenticating Agent shall be authorized to act on behalf
of the Trustee to authenticate Debentures issued upon exchange, transfer or
partial redemption thereof, and Debentures so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. All references in this
Indenture to the authentication of Debentures by the Trustee shall be deemed to
include authentication by an Authenticating Agent. Such Authenticating Agent
shall be acceptable to the Company and shall be a corporation that has a
combined capital and surplus, as most recently reported or determined by it,
sufficient under the laws of each jurisdiction under which it is organized or
in which it is doing business to conduct a trust business, and that is
otherwise authorized under such laws to conduct such business and is subject to
supervision or examination by federal or state authorities. If at any time any
Authenticating Agent shall cease to be eligible in accordance with these
provisions, it shall resign or be terminated immediately.
(b) The 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 (and upon request by the Company shall) terminate the agency of
the Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of the Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the Company. The
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
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SECTION 2.12 RIGHT OF SET-OFF.
With respect to the Debentures initially issued to the Trust,
notwithstanding anything to the contrary herein, the Company shall have the
right to set-off any payment it is otherwise required to make in respect of any
such Debenture to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the Preferred
Securities Guarantee relating to such Debenture or to a holder of Preferred
Securities pursuant to an action undertaken under SECTION 7.8 of this
Indenture.
SECTION 2.13 CUSIP NUMBERS.
The Company in issuing the Debentures 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 Debentureholders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION OF DEBENTURES
SECTION 3.1 REDEMPTION.
Subject to the Company having received prior regulatory approval, if
then required under applicable capital guidelines or regulatory policies, the
Company may redeem the Debentures issued hereunder on and after the dates set
forth in and in accordance with the terms of this Article.
SECTION 3.2 SPECIAL EVENT REDEMPTION.
Subject to the Company having received prior regulatory approval, if
then required under applicable capital guidelines or regulatory policies, if a
Special Event has occurred and is continuing, then, notwithstanding SECTION
3.3, the Company shall have the right upon not less than 30 days nor more than
60 days notice to the holders of the Debentures to redeem the Debentures, in
whole but not in part, for cash within 180 days following the occurrence of
such Special Event (the "180-Day Period") at a redemption price equal to 100%
of the principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption (the "Redemption Price"), provided that
if at the time there is available to the Company the opportunity to eliminate,
within the 180-Day Period, a Tax Event by taking some ministerial action (a
"Ministerial Action"), such as filing a form or making an election, or pursuing
some other similar reasonable measure which has no adverse effect on the
Company, the Trust or the holders of the Trust Securities issued by the Trust,
the Company shall pursue such Ministerial Action in lieu of redemption, and,
provided further, that the Company shall have no right to redeem the Debentures
while the Trust is pursuing any Ministerial Action pursuant to its obligations
under the Trust Agreement. The Redemption Price shall be paid prior to 12:00
noon, New York City time, on the date of such redemption or such earlier time
as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New
York City time, on the date such Redemption Price is to be paid.
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SECTION 3.3 OPTIONAL REDEMPTION BY COMPANY.
Except as otherwise specified in this Indenture, the Company shall
have the right to redeem the Debentures, in whole or in part, from time to
time, on or after June 30, 2003, at a Redemption Price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption. Any redemption pursuant to this Section shall be
made upon not less than 30 days nor more than 60 days notice to the holder of
the Debentures, at the Redemption Price. If the Debentures are only partially
redeemed pursuant to this Section, the Debentures shall be redeemed pro rata or
by lot or in such other manner as the Trustee shall deem appropriate and fair
in its discretion. The Redemption Price shall be paid prior to 12:00 noon, New
York City time, on the date of such redemption or at such earlier time as the
Company determines provided that the Company shall deposit with the Trustee an
amount sufficient to pay the Redemption Price by 10:00 a.m., New York City
time, on the date such Redemption Price is to be paid.
SECTION 3.4 NOTICE OF REDEMPTION.
(a) The Company may exercise its right to redeem all or a portion
of the Debentures in accordance with this Section by giving or by causing the
Trustee to give, upon receipt of 45 days' written notice from the Company,
notice of such redemption to holders of the Debentures to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than
30 days and not more than 60 days before the date fixed for redemption unless a
shorter period is specified in the Debentures to be redeemed to such holders at
their last addresses as they appear upon the Debenture Register. Any notice
that is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the registered holder receives the notice.
In any case, failure duly to give such notice to the holder of any Debenture
designated for redemption in whole or in part, or any defect in the notice,
shall not affect the validity of the proceedings for the redemption of any
other Debentures. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with any such
restriction. Each such notice of redemption shall identify the Debenture to be
redeemed (including CUSIP numbers, if any) and shall specify the date fixed for
redemption and the Redemption Price and shall state that payment of the
Redemption Price shall be made at the office or agency of the Company or at the
Corporate Trust Office, upon presentation and surrender of such Debentures,
that interest accrued to the date fixed for redemption shall be paid as
specified in said notice and that from and after said date interest shall cease
to accrue. If less than all the Debentures are to be redeemed, the notice to
the holders of the Debentures shall specify the particular Debentures to be
redeemed. If the Debentures are to be redeemed in part only, the notice shall
state the portion of the principal amount thereof to be redeemed and shall
state that on and after the redemption date, upon surrender of such Debenture,
a new Debenture or Debentures in principal amount equal to the unredeemed
portion thereof shall be issued.
(b) If less than all the Debentures are to be redeemed, the
Company shall give the Trustee at least 45 days notice in advance of the date
fixed for redemption as to the aggregate principal amount of Debentures to be
redeemed, and thereupon the Trustee shall select, by lot or in such other
manner as it shall deem appropriate and fair in its discretion, the portion or
portions (equal to $10 or any integral multiple thereof) of the Debentures to
be redeemed and shall thereafter promptly notify the Company in writing of the
numbers of the Debentures to be redeemed, in whole or in part. The Company
may, if and whenever it shall so elect pursuant to the terms hereof, by
delivery of instructions signed on its behalf by its Chief Executive Officer,
its President or any Vice President, instruct the Trustee or any paying agent
to call all or any part of the Debentures for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may
deem advisable.
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In any case in which notice of redemption is to be given by the Trustee or any
such paying agent, the Company shall deliver or cause to be delivered to, or
permit to remain with, the Trustee or such paying agent, as the case may be,
such Debenture Register, transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such paying agent to
give any notice by mail that may be required under the provisions of this
Section.
SECTION 3.5 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been
completed as above provided, the Debentures or portions of Debentures to be
redeemed specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable Redemption Price, and
interest on such Debentures or portions of Debentures shall cease to accrue on
and after the date fixed for redemption, unless the Company shall default in
the payment of such Redemption Price with respect to any such Debenture or
portion thereof. On presentation and surrender of such Debentures on or after
the date fixed for redemption at the place of payment specified in the notice,
said Debentures shall be paid and redeemed at the Redemption Price (but if the
date fixed for redemption is an interest payment date, the interest installment
payable on such date shall be payable to the registered holder at the close of
business on the applicable record date pursuant to SECTION 2.4).
(b) Upon presentation of any Debenture that is to be redeemed in
part only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Debenture is presented shall make available for
delivery to the holder thereof, at the expense of the Company, a new Debenture
of authorized denomination in principal amount equal to the unredeemed portion
of the Debenture so presented.
SECTION 3.6 NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Debentures, to defer payments of interest by extending the interest
payment period of such Debentures for a period not exceeding 20 consecutive
quarters (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
Extended Interest Payment Period may extend beyond the Maturity Date.
Interest, which has been deferred because of the extension of the interest
payment period pursuant to this Section, shall bear interest (to the extent
permitted under applicable law) thereon at the rate of ___% per annum,
compounded quarterly during the Extended Interest Payment Period (the
"Compounded Interest"). At the end of the Extended Interest Payment Period,
the Company shall calculate (and deliver such calculation to the Trustee) and
pay all interest accrued and unpaid on the Debentures, including any Additional
Interest and Compounded Interest (together, "Deferred Interest") that shall be
payable to the holders of the Debentures in whose names the Debentures are
registered in the Debenture Register on the first record date after the end of
the Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Company may further extend such period, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters, or extend beyond the Maturity Date of the
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Debentures. Upon the termination of any Extended Interest Payment Period and
upon the payment of all Deferred Interest then due, the Company may commence a
new Extended Interest Payment Period, subject to the foregoing requirements.
No interest shall be due and payable during an Extended Interest Payment
Period, except at the end thereof, but the Company may prepay at any time all
or any portion of the interest accrued during an Extended Interest Payment
Period.
SECTION 4.2 NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period one Business Day before the earlier of (i) the next succeeding
date on which Distributions on the Trust Securities issued by the Trust are
payable; or (ii) the date the Trust is required to give notice of the record
date or the date such Distributions are payable to The Nasdaq Stock Market's
National Market or other applicable self-regulatory organization or to holders
of the Preferred Securities issued by the Trust, but in any event at least one
Business Day before such record date.
(b) If the Property Trustee is not the only holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give the holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least one
Business Day before the earlier of (i) the next succeeding Interest Payment
Date; or (ii) the date the Company is required to give notice of the record or
payment date of such interest payment to The Nasdaq Stock Market's National
Market or other applicable self-regulatory organization or to holders of the
Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (a) or (b) of this Section shall be counted as one of the 20
quarters permitted in the Extended Interest Payment Period permitted under
SECTION 4.1.
SECTION 4.3 LIMITATION ON TRANSACTIONS.
If (i) there shall have occurred and be continuing any Event of
Default; (ii) an Extended Interest Payment Period shall have been declared and
be continuing; or (iii) the Company is in default with respect to its
obligations under the Preferred Securities Guarantee, then (a) the Company
shall not, and shall not permit any Subsidiary to, 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 (other than (1) the
reclassification of any class of the Company's capital stock into another class
of its capital stock; (2) dividends or distributions payable in any class of
the Company's common stock, (3) any declaration of a dividend in connection
with the implementation of a shareholder rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any
rights pursuant thereto, (4) payments under the Preferred Securities Guarantee
and (5) purchases of the Company's common stock related to the rights under any
of the Company's benefit plans for its or its subsidiaries' directors, officers
or employees); (b) the Company shall not, and shall not permit any Subsidiary
to, make any payment of principal of, or interest or premium, if any, on, or
repay, repurchase or redeem, any debt securities issued by the Company which
rank pari passu with or junior to the Debentures; (c) the Company shall not
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any Subsidiary of the Company if such guarantee ranks pari
passu with or junior to the Debentures; provided, however, that notwithstanding
the foregoing the Company may make payments pursuant to its obligations under
the Preferred Securities Guarantee; and (d) the Company shall not redeem,
purchase or acquire less than all of the outstanding Debentures or any of the
Preferred Securities.
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ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1 PAYMENT OF PRINCIPAL AND INTEREST.
The Company shall duly and punctually pay or cause to be paid the
principal of and interest on the Debentures at the time and place and in the
manner provided herein.
SECTION 5.2 MAINTENANCE OF AGENCY.
So long as any of the Debentures remain Outstanding, the Company shall
maintain an office or agency in the Place of Payment where (i) Debentures may
be presented for payment; (ii) Debentures may be presented as hereinabove
authorized for registration of transfer and exchange; and (iii) notice and
demands to or upon the Company in respect of the Debentures and this Indenture
may be given or served, such designation to continue with respect to such
office or agency until the Company shall, by written notice signed by its Chief
Executive Officer, its President or a Vice President and delivered to the
Trustee, designate some other office or agency for such purposes or any of
them. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, notices and demands. In addition to
any such office or agency, the Company may from time to time designate one or
more offices or agencies where the Debentures may be presented for registration
or transfer and for exchange in the manner provided herein, 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 in the Place of Payment for such purposes. The Company shall give the
Trustee prompt written notice of any such designation or rescission thereof.
SECTION 5.3 PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents for the
Debentures, other than the Trustee, the Company shall cause each such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section:
(i) that it shall hold all sums held by it as such agent
for the payment of the principal of or interest on the Debentures (whether such
sums have been paid to it by the Company or by any other obligor of such
Debentures) in trust for the benefit of the Persons entitled thereto;
(ii) that it shall give the Trustee prompt written notice
of any failure by the Company (or by any other obligor of such Debentures) to
make any payment of the principal of or interest on the Debentures when the
same shall be due and payable;
(iii) that it shall, at any time during the continuance of
any failure referred to in the preceding paragraph (a)(ii) above, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such paying agent; and
(iv) that it shall perform all other duties of paying
agent as set forth in this Indenture.
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(b) If the Company shall act as its own paying agent with respect
to the Debentures, it shall on or before each due date of the principal of or
interest on such Debentures, set aside, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay such principal
or interest so becoming due on Debentures until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of such action, or any failure (by it or any other obligor on such
Debentures) to take such action. Whenever the Company shall have one or more
paying agents for the Debentures, it shall, prior to each due date of the
principal of or interest on any Debentures, deposit with the paying agent a sum
sufficient to pay the principal or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal or
interest, and (unless such paying agent is the Trustee) the Company shall
promptly notify the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i)
the agreement to hold sums in trust as provided in this Section is subject to
the provisions of SECTION 13.3 and 13.4; and (ii) the Company may at any time,
for the purpose of obtaining the satisfaction and discharge of this Indenture
or for any other purpose, pay, or direct any paying agent to pay, to the
Trustee all sums held in trust by the Company or such paying agent, such sums
to be held by the Trustee upon the same terms and conditions as those upon
which such sums were held by the Company or such paying agent; and, upon such
payment by any paying agent to the Trustee, such paying agent shall be released
from all further liability with respect to such money.
SECTION 5.4 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, shall appoint, in the manner provided in SECTION 9.10, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 5.5 COMPLIANCE WITH CONSOLIDATION PROVISIONS.
The Company shall not, while any of the Debentures remain outstanding,
consolidate with, or merge into, or merge into itself, or convey, transfer or
lease all or substantially all of its property and assets to any other entity
and no entity shall consolidate with or merge into the Company or convey,
transfer or lease substantially all of its properties and assets to the
Company, unless the provisions of ARTICLE XII hereof are complied with.
SECTION 5.6 LIMITATION ON TRANSACTIONS.
If Debentures are issued to the Trust or a trustee of the Trust in
connection with the issuance of Trust Securities by the Trust and (i) there
shall have occurred any event that would constitute an Event of Default; (ii)
the Company shall be in default with respect to its payment of any obligations
under the Preferred Securities Guarantee relating to the Trust; or (iii) the
Company shall have given notice of its election to defer payments of interest
on such Debentures by extending the interest payment period as provided in this
Indenture and such period, or any extension thereof, shall be continuing, then
(a) the Company may not, and may not permit any Subsidiary to, declare or pay
any dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (1) the reclassification of any class of the Company's capital
stock into another class of capital stock, (2) dividends or distributions
payable in any class of the Company's common stock, (3) any declaration of a
dividend in connection with the implementation of a shareholder rights plan, or
the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (4) payments under the
Preferred Securities Guarantee and (5) purchases of the Company's common stock
related to the rights under any of the Company's benefit plans for its or its
subsidiaries' directors, officers or employees); (b) the
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Company shall not make any payment of interest, principal or premium, if any,
or repay, repurchase or redeem any debt securities issued by the Company which
rank pari passu with or junior to the Debentures; provided, however, that the
Company may make payments pursuant to its obligations under the Preferred
Securities Guarantee; and (c) the Company shall not redeem, purchase or acquire
less than all of the outstanding Debentures or any of the Preferred Securities.
SECTION 5.7 COVENANTS AS TO THE TRUST.
For so long as such Trust Securities of the Trust remain outstanding,
the Company shall (i) maintain 100% direct or indirect ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of the
Common Securities; (ii) not voluntarily terminate, wind up or liquidate the
Trust, except upon prior regulatory approval if then so required under
applicable capital guidelines or regulatory policies and use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with a distribution of Debentures, the redemption of all of the Trust
Securities of the Trust or certain mergers, consolidations or amalgamations,
each as permitted by the Trust Agreement; and (b) to otherwise continue not to
be treated as an association taxable as a corporation or partnership for United
States federal income tax purposes; and (iii) use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an individual
beneficial interest in the Debentures. In connection with the distribution of
the Debentures to the holders of the Preferred Securities upon a Dissolution
Event, the Company shall use its best efforts to list such Debentures on The
Nasdaq Stock Market's National Market or on such other exchange as the
Preferred Securities are then listed.
SECTION 5.8 COVENANTS AS TO PURCHASES.
Prior to June 30, 2003, the Company shall not purchase any Debentures,
in whole or in part, from the Trust.
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
SECTION 6.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
DEBENTUREHOLDERS.
The Company shall furnish or cause to be furnished to the Trustee (a)
within one Business Day after June 30 and December 31 of each year a list, in
such form as the Trustee may reasonably require, of the names and addresses of
the holders of the Debentures as of such regular record date, provided that the
Company shall not be obligated to furnish or cause to furnish such list at any
time that the list shall not differ in any respect from the most recent list
furnished to the Trustee by the Company; 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; provided, however, that,
in either case, no such list need be furnished if the Trustee shall be the
Debenture Registrar.
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SECTION 6.2 PRESERVATION OF INFORMATION COMMUNICATIONS WITH
DEBENTUREHOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Debentures contained in the most recent list furnished to it as
provided in SECTION 6.1 and as to the names and addresses of holders of
Debentures received by the Trustee in its capacity as registrar for the
Debentures (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as provided
in SECTION 6.1 upon receipt of a new list so furnished.
(c) Debentureholders may communicate as provided in Section 312(b)
of the Trust Indenture Act with other Debentureholders with respect to their
rights under this Indenture or under the Debentures.
SECTION 6.3 REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the Trustee,
within 15 days after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) that the
Company may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such Sections, then to
file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports that may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first
class postage prepaid, or reputable overnight delivery service that provides
for evidence of receipt, to the Debentureholders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of this
Section and delivered to Debentureholders or the Company's shareholders as may
be required by rules and regulations prescribed from time to time by the
Commission.
(d) Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
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SECTION 6.4 REPORTS BY THE TRUSTEE.
(a) The Trustee shall transmit to Debentureholders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act,
the Trustee shall, within 60 days after each June 30 following the date of this
Indenture deliver to Debentureholders a brief report, dated as of such June 30,
which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to Debentureholders, be filed by the Trustee with each stock
exchange, if any, upon which the Debentures are listed with the Commission and
the Company shall promptly notify the Trustee when any Debentures become
listed on any stock exchange.
SECTION 6.5 STATEMENTS AS TO DEFAULT.
(a) The Company shall deliver to the Trustee annually, within 120
days after the end of each of its fiscal years, a certificate, from its
principal executive officer, principal financial officer or principal
accounting officer, stating whether or not to the best knowledge of the signer
thereof the Company is in compliance (without regard to periods of grace or
notice requirements) with all conditions and covenants under this Indenture,
and if the Company shall not be in compliance, specifying such non-compliance
and the nature and status thereof of which such signer may have knowledge.
(b) The Company shall deliver to the Trustee, as soon as possible
and in any event within five days after the Company becomes aware of the
occurrence of any Event of Default or an event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or Default and the action
which the Company proposes to take with respect thereto.
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ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
(a) Whenever used herein with respect to the Debentures, "Event of
Default" means any one or more of the following events that has occurred and is
continuing:
(i) the Company defaults in the payment of any
installment of interest (including Additional Interest or Compounded Interest,
if any) upon any of the Debentures, as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period by the Company in
accordance with the terms of this Indenture shall not constitute a default in
the payment of interest for this purpose;
(ii) the Company defaults in the payment of the principal
on the Debentures as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise;
(iii) the Company fails to observe or perform any other of
its covenants or agreements with respect to the Debentures for a period of 90
days after the date on which written notice of such failure, requiring the same
to be remedied and stating that such notice is a "Notice of Default" hereunder,
shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee, by registered or certified mail, by
the holders of at least 25% in aggregate principal amount of the Debentures at
the time Outstanding;
(iv) the Company pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of an
order for relief against it in an involuntary case; (iii) consents to the
appointment of a Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit of its creditors;
(v) a court of competent jurisdiction enters an order
under any Bankruptcy Law that (i) is for relief against the Company in an
involuntary case; (ii) appoints a Custodian of the Company for all or
substantially all of its property; or (iii) orders the liquidation of the
Company, and the order or decree remains unstayed and in effect for 60 days; or
(vi) the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence except
in connection with (i) the distribution of Debentures to holders of Trust
Securities in liquidation of their interests in the Trust; (ii) the redemption
of all of the outstanding Trust Securities of the Trust; or (iii) certain
mergers, consolidations or amalgamations, each as permitted by the Trust
Agreement.
(b) In each and every such case, unless the principal of all the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
then Outstanding hereunder, by notice in writing to the Company (and to the
Trustee if given by such Debentureholders) may declare the principal of all the
Debentures to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, notwithstanding
anything contained in this Indenture or in the Debentures.
(c) At any time after the principal of the Debentures 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, the holders of a majority in aggregate principal amount of the
Debentures then
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Outstanding hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including Additional Interest and Compounded
Interest, if any) upon all the Debentures and the principal of any and all
Debentures that shall have become due otherwise than by acceleration (with
interest upon such principal, and upon overdue installments of interest, at the
rate per annum expressed in the Debentures to the date of such payment or
deposit) and the amount payable to the Trustee under SECTION 9.6; and (ii) any
and all Events of Default under this Indenture, other than the nonpayment of
principal on Debentures that shall not have become due by their terms, shall
have been remedied or waived as provided in SECTION 7.6. No such rescission
and annulment shall extend to or shall affect any subsequent default or impair
any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right
with respect to Debentures 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 and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all rights,
remedies and powers of the Company and the Trustee shall continue as though no
such proceedings had been taken.
SECTION 7.2 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Company covenants that (i) if it defaults in the payment
of any installment of interest (including Additional Interest and Compounded
Interest) on any of the Debentures, and such default continues for a period of
90 Business Days; or (ii) if it defaults in the payment of the principal of any
of the Debentures when the same have become due and payable, whether upon
maturity of the Debentures or upon redemption or upon declaration or otherwise,
then, upon demand of the Trustee, the Company shall pay to the Trustee, for the
benefit of the holders of the Debentures, the whole amount that then has become
due and payable on all such Debentures for principal or interest, or both, as
the case may be, with interest upon the overdue principal and (if the
Debentures are held by the Trust or a trustee of the Trust, without duplication
of any other amounts paid by the Trust or trustee in respect thereof) upon
overdue installments of interest at the rate per annum expressed in the
Debentures; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, and the amount
payable to the Trustee and its counsel under SECTION 9.7.
(b) If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action 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 other obligor upon the
Debentures and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or other obligor upon
the Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or judicial
proceedings affecting the Company or the creditors or property of either, the
Trustee shall have power to intervene in such proceedings and take any action
therein that may be permitted by the court and shall (except as may be
otherwise provided by law) be entitled to file such proofs of claim and other
papers and documents as may be necessary or advisable in order to have the
claims of the Trustee and of the holders of the Debentures allowed for the
entire amount due and payable by the Company under this Indenture at the date
of institution of such proceedings and for any additional amount that may
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become due and payable by the Company after such date, and to collect and
receive any moneys or other property payable or deliverable on any such claim,
and to distribute the same after the deduction of the amount payable to the
Trustee and its counsel under SECTION 9.7; and any receiver, assignee or
trustee in bankruptcy or reorganization is hereby authorized by each of the
holders of the Debentures to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
such Debentureholders, to pay to the Trustee any amount due it under SECTION
9.7.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Debentures,
may be enforced by the Trustee without the possession of any of such
Debentures, or the production thereof at any trial or other proceeding relating
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, after provision for payment to the Trustee of any amounts due
under SECTION 9.7, be for the ratable benefit of the holders of the Debentures.
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 at law or in equity or 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. Nothing contained herein
shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Debentureholder any plan of reorganization,
arrangement, adjustment or composition affecting the Debentures or the rights
of any holder thereof or to authorize the Trustee to vote in respect of the
claim of any Debentureholder in any such proceeding.
SECTION 7.3 APPLICATION OF MONEYS COLLECTED.
Any moneys collected by the Trustee pursuant to this Article with
respect to the Debentures shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such moneys
on account of principal or interest, upon presentation of the Debentures, and
notation thereon the payment, if only partially paid, and upon surrender
thereof if fully paid:
FIRST: to the payment of costs and expenses of collection and
of all amounts payable to the Trustee under SECTION 9.7;
SECOND: to the payment of all Senior Indebtedness of the
Company if and to the extent required by ARTICLE XVI;
THIRD: to the payment of the amounts then due and unpaid upon
the Debentures for principal and interest, in respect of which
or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according
to the amounts due and payable on such Debentures for
principal and interest, respectively; and
FOURTH: any remaining balance to the Company.
SECTION 7.4 LIMITATION ON SUITS.
(a) No holder of any Debenture shall have any right by virtue of
any provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(i) such holder
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previously shall have given to the Trustee written notice of an Event of
Default and of the continuance thereof with respect to the Debentures
specifying such Event of Default, as hereinbefore provided; (ii) the holders of
not less than 25% in aggregate principal amount of the Debentures then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; and (iv) 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; and (v) during such 60 day period, the holders of a
majority in principal amount of the Debentures do not give the Trustee a
direction inconsistent with the request.
(b) Notwithstanding anything contained herein to the contrary or
any other provisions of this Indenture, the right of any holder of the
Debentures to receive payment of the principal of and interest on the
Debentures, as therein provided, on or after the respective due dates expressed
in such Debenture (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such
respective dates or redemption date, shall not be impaired or affected without
the consent of such holder and by accepting a Debenture hereunder it is
expressly understood, intended and covenanted by the taker and holder of every
Debenture with every other such taker and holder and the Trustee, that no one
or more holders of Debentures shall have any right in any manner whatsoever by
virtue of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other of such Debentures, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
ratable and common benefit of all holders of Debentures. For the protection
and enforcement of the provisions of this Section, each and every
Debentureholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 7.5 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER.
(a) Except as otherwise provided in SECTION 2.8, all powers and
remedies given by this Article to the Trustee or to the Debentureholders 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 holders of the
Debentures, 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 such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of
the Debentures to exercise any right or power accruing upon any Event of
Default occurring and continuing as aforesaid shall impair any such right 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 7.4, every
power and remedy given by this Article or by law to the Trustee or the
Debentureholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Debentureholders, as appropriate.
SECTION 7.6 CONTROL BY DEBENTUREHOLDERS.
The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding, determined in accordance with SECTION 10.4,
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; provided, however, that such direction shall
not be in conflict with any rule of law or with this Indenture. Subject to the
provisions of SECTION 9.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible
Officer or Officers of the Trustee, determine that the proceeding so directed
would involve the Trustee in personal liability. The holders of a majority in
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aggregate principal amount of the Debentures at the time Outstanding affected
thereby, determined in accordance with SECTION 10.4, may on behalf of the
holders of all of the Debentures waive any past default in the performance of
any of the covenants contained herein and its consequences, except (i) a
default in the payment of the principal of or interest on, any of the
Debentures as and when the same shall become due by the terms of such
Debentures otherwise than by acceleration (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and principal
has been deposited with the Trustee (in accordance with SECTION 7.1(C)); (ii) a
default in the covenants contained in SECTION 5.6; or (iii) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the holder of each Outstanding Debenture affected; provided,
however, that if the Debentures 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 preference of 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
Debenture is required, such waiver shall not be effective until each holder of
the Trust Securities of the Trust shall have consented to such waiver. Upon
any such waiver, the default covered thereby shall be deemed to be cured for
all purposes of this Indenture and the Company, the Trustee and the holders of
the Debentures shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 7.7 UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any Debentures
by such holder'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; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders holding more than 10% in aggregate principal amount
of the Outstanding Debentures, or to any suit instituted by any Debentureholder
for the enforcement of the payment of the principal of or interest on the
Debentures, on or after the respective due dates expressed in such Debenture or
established pursuant to this Indenture.
SECTION 7.8 DIRECT ACTION BY HOLDERS OF PREFERRED SECURITIES.
Any registered holder of the Preferred Securities shall have the
right, upon the occurrence of an Event of Default described in SECTION
7.1(A)(I) or 7.1(A)(II), to institute a suit directly against the Company for
enforcement of payment to such holder of principal of and (subject to SECTIONS
2.3 and 4.1) interest (including any Additional Interest) on the Debentures
having a principal amount equal to the aggregate Liquidation Amount (as defined
in the Trust Agreement) of such Preferred Securities held by such holder. The
Company may not amend this Indenture to remove this right to institute a suit
directly against the Company without the prior consent of the holders of all
the Preferred Securities.
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ARTICLE VIII
FORM OF DEBENTURE AND ORIGINAL ISSUE
SECTION 8.1 FORM OF DEBENTURE.
The definitive Debenture and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the forms
contained as EXHIBIT A attached hereto and incorporated herein by reference.
SECTION 8.2 ORIGINAL ISSUE OF DEBENTURES.
Debentures in the aggregate principal amount of up to $23,000,000 may,
upon execution of this Indenture, be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate
and make available for delivery said Debentures to or upon the written order of
the Company, signed by its Chairman, its Vice Chairman, its Chief Executive
Officer, its President, or any Vice President and its Treasurer or an Assistant
Treasurer, without any further action by the Company.
ARTICLE IX
CONCERNING THE TRUSTEE
SECTION 9.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform with respect to the Debentures 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 has occurred that 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 man
would exercise or use under the circumstances in the conduct of his own
affairs.
(b) 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:
(1) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default that may have occurred:
(i) the duties and obligations of the Trustee
shall, with respect to the Debentures, be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable with respect
to the Debentures except for the performance of such duties and obligations as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of
the Trustee, the Trustee may with respect to the Debentures 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 that 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;
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(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(3) 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 holders of not less than a majority in principal amount of the
Debentures at the time outstanding 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
with respect to the Debentures; and
(4) 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 reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity against
such risk is not reasonably assured to it.
SECTION 9.2 NOTICE OF DEFAULTS.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Debentures, the Trustee shall transmit by mail to all holders of the
Debentures, as their names and addresses appear in the Debenture Register,
notice of such default, unless such default shall have been cured or waived;
provided, however, that, except in the case of any default in the payment of
the principal or interest (including Additional Interest and Compounded
Interest, if any) on any Debenture, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of the directors and/or Responsible Officers of
the Trustee determines in good faith that the withholding of such notice is in
the interests of the holders of such Debentures; and provided, further, that in
the case of any default of the character specified in SECTION 7.1(A)(III), no
such notice to holders of Debentures need be sent until at least 30 days after
the occurrence thereof. For the purposes of this Section, the term "default"
means any event which is, or after notice or lapse of time or both, would
become, an Event of Default with respect to the Debentures.
SECTION 9.3 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in SECTION 9.1:
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
security or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by the Chief Executive Officer,
the President or any Vice President and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer thereof (unless other
evidence in respect thereof is specifically prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a default
or an Event of Default, other than an Event of Default specified in SECTION
7.1(A)(I) or (II), unless and until it receives notification of such
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Event of Default from the Company or from holders of at least 25% of the
aggregate principal amount of the Debentures at the time Outstanding;
(d) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(e) 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 Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (that has not been cured or waived) to exercise with respect to the
Debentures 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 his or her own
affairs;
(f) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Indenture;
(g) 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,
security or other papers or documents, but the Trustee in its discretion may
make such inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such inquiry or investigation,
it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(h) The Trustee may execute any of its trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 9.4 TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.
(a) The Recitals contained herein and in the Debentures, except
the certificates of authentication, shall be taken as the statements of the
Company and the Trustee assumes no responsibility for the correctness of the
same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Debentures or of the proceeds of such
Debentures, or for the use or application of any moneys paid over by the
Trustee in accordance with any provision of this Indenture, or for the use or
application of any moneys received by any paying agent other than the Trustee.
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SECTION 9.5 MAY HOLD DEBENTURES.
The Trustee or any paying agent or registrar for the Debentures, in
its individual or any other capacity, may become the owner or pledgee of
Debentures and, subject to SECTIONS 9.9 and 9.14, may otherwise deal with the
Company with the same rights it would have if it were not Trustee, paying agent
or Debenture Registrar.
SECTION 9.6 MONEYS HELD IN TRUST.
Subject to the provisions of SECTION 13.5, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from
other funds except to the extent required by law. The Trustee shall have no
liability for interest on any moneys received by it hereunder except such as it
may agree in writing with the Company to pay thereon.
SECTION 9.7 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(i) to pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(ii) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or advance as
may be attributable to its negligence or bad faith; and
(iii) to indemnify each of the Trustee or any predecessor Trustee
and their agents for, and to hold them harmless against, any and all loss,
damage, claims, liability or expense, including taxes (other than taxes based
upon, measured by or determined by the income of the Trustee), arising out of
or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its own negligence or bad faith.
The Trustee shall have a lien prior to the Debentures as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section, except with respect to funds held
in trust for the benefit of the holders of particular Debentures. When the
Trustee incurs expenses or renders services in connection with an Event of
Default specified in SECTION 7.1(A)(IV), SECTION 7.1(A)(V) or 7.1(A)(VI), 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 Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
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SECTION 9.8 RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in SECTION 9.1, 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 suffering or omitting to take any action hereunder, such matter (unless
other evidence in respect thereof be herein specifically prescribed) may, in
the absence of negligence 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 or bad faith on
the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted to be taken by it under the provisions of this
Indenture upon the faith thereof.
SECTION 9.9 DISQUALIFICATION: CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
SECTION 9.10 CORPORATE TRUSTEE REQUIRED ELIGIBILITY.
There shall at all times be a Trustee with respect to the Debentures
issued hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, and subject to supervision or examination by federal,
state, territorial, or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. The Company may not, nor may any
Person directly or indirectly controlling, controlled by, or under common
control with the Company, serve as Trustee. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect
specified in SECTION 9.11.
SECTION 9.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any
time resign by giving written notice thereof to the Company and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Debentures by written
instrument, in duplicate, executed by order of the 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, the resigning Trustee may petition at the expense of the
Company any court of competent jurisdiction for the appointment of a successor
trustee with respect to the Debentures, or any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six months may,
subject to the provisions of SECTION 9.9, on behalf of himself 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, appoint a successor trustee.
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(b) In case at any time any one of the following shall occur
(i) the Trustee shall fail to comply with the provisions
of SECTION 9.9 after written request therefor by the Company or by any
Debentureholder who has been a bona fide holder of a Debenture or Debentures
for at least six months;
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of SECTION 9.10 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be appointed
or consented to, 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 with
respect to all Debentures 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 so removed and one copy
to the successor trustee, or, subject to the provisions of SECTION 9.9, unless
the Trustee's duty to resign is stayed as provided herein, any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at least six
months may, on behalf of that holder 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, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee by so
notifying the Trustee and the Company and may appoint a successor Trustee with
the consent of the Company. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after such notification,
the Trustee may petition at the expense of the Company any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Debentures, or any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months may, subject to the provisions
of SECTION 9.9, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may appoint a successor trustee.
(d) No resignation or removal of the Trustee and no appointment of
a successor trustee with respect to the Debentures pursuant to any of the
provisions of this Section shall become effective until acceptance of
appointment by the successor trustee as provided in SECTION 9.12.
SECTION 9.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor trustee
with respect to the Debentures, every successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, 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, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring
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Trustee and shall duly assign, transfer and deliver to such successor trustee
all property and money held by such retiring Trustee hereunder.
(b) Upon request of any successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, powers and trusts
referred to in paragraph (a) of this Section.
(c) No successor trustee may accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Article.
(d) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the succession
of such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Company fails to transmit such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Company.
SECTION 9.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under the provisions of
SECTION 9.9 and eligible under the provisions of SECTION 9.10, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding. In case any
Debentures shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Debentures
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
SECTION 9.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be
subject to Section 311(a) of the Trust Indenture Act to the extent included
therein.
ARTICLE X
CONCERNING THE DEBENTUREHOLDERS
SECTION 10.1 EVIDENCE OF ACTION BY HOLDERS.
(a) Whenever in this Indenture it is provided that the holders of
a majority or specified percentage in aggregate principal amount of the
Debentures may take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any other action),
the fact that at the time of taking any such action the holders of such
majority or specified percentage have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such
holders of Debentures in Person or by agent or proxy appointed in writing.
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(b) If the Company shall solicit from the Debentureholders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, as evidenced by an Officers'
Certificate, fix in advance a record date for the determination of
Debentureholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, 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 may be given
before or after the record date, but only the Debentureholders of record at the
close of business on the record date shall be computed to be Debentureholders
for the purposes of determining whether Debentureholders of the requisite
proportion of Outstanding Debentures have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Outstanding Debentures shall be computed
as of the record date; provided, however, that no such authorization, agreement
or consent by such Debentureholders 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 10.2 PROOF OF EXECUTION BY DEBENTUREHOLDERS.
Subject to the provisions of SECTION 9.1, proof of the execution of
any instrument by a Debentureholder (such proof shall not require notarization)
or its agent or proxy and proof of the holding by any Person of any of the
Debentures shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture
Register of such Debentures or by a certificate of the Debenture Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
SECTION 10.3 WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of any
Debenture, the Company, the Trustee, any paying agent, any Authenticating Agent
and any Debenture Registrar may deem and treat the Person in whose name such
Debenture shall be registered upon the books of the Company as the absolute
owner of such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of and interest on such Debenture (subject to SECTION
2.3) and for all other purposes; and neither the Company, the Trustee, any
paying agent, any Authenticating Agent or any Debenture Registrar shall be
affected by any notice to the contrary.
SECTION 10.4 CERTAIN DEBENTURES OWNED BY COMPANY DISREGARDED.
In determining whether the holders of the requisite aggregate
principal amount of Debentures have concurred in any direction, consent or
waiver under this Indenture, the Debentures that are owned by the Company or
any other obligor on the Debentures or by any Person directly or indirectly
controlling or controlled by, or under common control with the Company or any
other obligor on the Debentures shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or
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waiver, only Debentures that a Responsible Officer of the Trustee actually
knows are so owned shall be so disregarded. The Debentures so owned that have
been pledged in good faith may be regarded as Outstanding for the purposes of
this Section, if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Debentures and that the
pledgee is not a Person directly or indirectly controlling or controlled by, or
under direct or indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be fully protected.
SECTION 10.5 ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in SECTION 10.1, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action, any holder of a
Debenture that is shown by the evidence to be included in the Debentures the
holders of which have consented to such action may, by filing written notice
with the Trustee, and upon proof of holding as provided in SECTION 10.2, revoke
such action so far as concerns such Debenture. Except as aforesaid any such
action taken by the holder of any Debenture shall be conclusive and binding
upon such holder and upon all future holders and owners of such Debenture, and
of any Debenture issued in exchange therefor, on registration of transfer
thereof or in place thereof, irrespective of whether or not any notation in
regard thereto is made upon such Debenture. Any action taken by the holders of
the majority or percentage in aggregate principal amount of the Debentures
specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
DEBENTUREHOLDERS.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Debentureholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect or inconsistency herein or in
the Debentures;
(b) to comply with ARTICLE X;
(c) to provide for uncertificated Debentures in addition to or in
place of certificated Debentures;
(d) to add to the covenants of the Company for the benefit of the
holders of all or any of the Debentures or to surrender any right or power
herein conferred upon the Company;
(e) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Debentures contained;
(f) to convey, transfer, assign, mortgage or pledge to or with the
Trustee any property or assets which the Company may desire to convey,
transfer, assign, mortgage or pledge;
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(g) to add to, delete from, or revise the conditions, limitations,
and restrictions on the authorized amount, terms, or purposes of issue,
authentication and delivery of Debentures, as herein set forth;
(h) to make any change that does not adversely affect the rights
of any Debentureholder in any material respect;
(i) to provide for the issuance of and establish the form and
terms and conditions of the Debentures, to establish the form of any
certifications required to be furnished pursuant to the terms of this Indenture
or of the Debentures or to add to the rights of the holders of the Debentures;
or
(j) to qualify or maintain the qualification of this Indenture
under the Trust Indenture Act.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise. Any supplemental indenture authorized by the
provisions of this Section may be executed by the Company and the Trustee
without the consent of the holders of any of the Debentures at the time
Outstanding, notwithstanding any of the provisions of SECTION 11.2.
SECTION 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.
With the consent (evidenced as provided in SECTION 10.1) of the
holders of not less than a majority in aggregate principal amount of the
Debentures at the time Outstanding, the Company, when authorized by Board
Resolutions, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) 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 not covered by SECTION 11.1 the rights of the holders of the
Debentures under this Indenture; provided, however, that no such supplemental
indenture shall without the consent of the holders of each Debenture then
Outstanding and affected thereby, (i) extend the fixed maturity of any
Debentures, reduce the principal amount thereof or reduce the rate or extend
the time of payment of interest thereon (other than the Company's right to
defer interest pursuant to this Indenture); or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture; provided further, that if the Debentures are held
by the Trust or a trustee of the Trust, such supplemental indenture shall not
be effective until the holders of a majority in liquidation preference of Trust
Securities of the Trust shall have consented to such supplemental indenture;
provided further, that if the consent of the holder of each Outstanding
Debenture is required, such supplemental indenture shall not be effective until
each holder of the Trust Securities of the Trust shall have consented to such
supplemental indenture. It shall not be necessary for the consent of the
Debentureholders affected thereby under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture pursuant to the
provisions of this Article, 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 holders of Debentures 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
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supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 11.4 DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.
Debentures affected by a supplemental indenture, authenticated and
delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article, may bear a notation in form approved by the
Company, provided such form meets the requirements of any exchange upon which
the Debentures may be listed, as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Debentures 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 by the Company, authenticated by the
Trustee and delivered in exchange for the Debentures then Outstanding.
SECTION 11.5 EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) Upon the request of the Company, accompanied by their Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Debentureholders
required to consent thereto 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. The Trustee, subject to the provisions of SECTION 9.1, may receive
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by, and conforms
to, the terms of this Article and that it is proper for the Trustee under the
provisions of this Article to join in the execution thereof.
(b) 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 mail, first class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders as their names and addresses appear upon the Debenture
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.
ARTICLE XII
SUCCESSOR CORPORATION
SECTION 12.1 COMPANY MAY CONSOLIDATE, ETC.
Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company, as the
case may be), or successive consolidations or mergers in which the Company, as
the case may be, or its successor or successors shall be a party or parties, or
shall prevent any sale, conveyance, transfer or other disposition of the
property of the Company, as the case may be, or its successor or successors as
an entirety, or substantially as an entirety, to any other corporation (whether
or not affiliated with the Company, as the case may be, or its successor or
successors) authorized to acquire and operate the same; provided, however, the
Company hereby covenants and agrees that, (i) upon any such consolidation,
merger, sale, conveyance, transfer or other disposition, the due and punctual
payment, in the case of the Company, of the principal of and interest on all of
the Debentures, 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
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the Company as the case may be, shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as
then in effect) satisfactory in form to the Trustee executed and delivered to
the Trustee by the entity formed by such consolidation, or into which the
Company, as the case may be, shall have been merged, or by the entity which
shall have acquired such property; (ii) in case the Company consolidates with
or merges into another Person or conveys or transfers its properties and assets
substantially then as an entirety to any Person, the successor Person is
organized under the laws of the United States or any state or the District of
Columbia; and (iii) immediately after giving effect thereto, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing.
SECTION 12.2 SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of, in the case of the Company, the
due and punctual payment of the principal of and interest on all of the
Debentures Outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Company, as
the case may be, such successor corporation shall succeed to and be substituted
for the Company, with the same effect as if it had been named as the Company
herein, and thereupon the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Debentures.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not in
substance) may be made in the Debentures thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or acquiring by
purchase or otherwise all or any part of the property of any other Person
(whether or not affiliated with the Company).
SECTION 12.3 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of SECTION 9.1, may obtain an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption,
comply with the provisions of this Article.
ARTICLE XIII
SATISFACTION AND DISCHARGE
SECTION 13.1 SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Company shall have delivered to the Trustee
for cancellation all Debentures theretofore authenticated (other than any
Debentures that shall have been destroyed, lost or stolen and that shall have
been replaced or paid as provided in SECTION 2.8) and Debentures for whose
payment money or Governmental Obligations have theretofore been deposited in
trust or segregated and held in trust by the Company (and thereupon repaid to
the Company or discharged from such trust, as provided in SECTION 13.5); or (b)
all such Debentures not theretofore 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
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Company shall deposit or cause to be deposited with the Trustee as trust funds
the entire amount in moneys or Governmental Obligations, or a combination
thereof, sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption all Debentures
not theretofore delivered to the Trustee for cancellation, including principal
and interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company; then this Indenture
shall thereupon cease to be of further effect except for the provisions of
SECTIONS 2.3, 2.6, 2.8, 5.1, 5.2, 5.3 and 9.10, that shall survive until the
date of maturity or redemption date, as the case may be, and SECTIONS 9.7 and
13.5, that shall survive to such date and thereafter, and the Trustee, on
demand of the Company and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging this
Indenture.
SECTION 13.2 DISCHARGE OF OBLIGATIONS.
If at any time all Debentures not heretofore delivered to the Trustee
for cancellation or that have not become due and payable as described in
SECTION 13.1 shall have been paid by the Company by depositing irrevocably with
the Trustee as trust funds moneys or an amount of Governmental Obligations
sufficient to pay at maturity or upon redemption all Debentures not theretofore
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity or date fixed for redemption, as the
case may be, and if the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, then after the date such moneys or
Governmental Obligations, as the case may be, are deposited with the Trustee,
the obligations of the Company under this Indenture shall cease to be of
further effect except for the provisions of SECTIONS 2.3, 2.6, 2.8, 5.1, 5.2,
5.3, 9.7, 9.10 and 13.5 hereof that shall survive until such Debentures shall
mature and be paid. Thereafter, SECTIONS 9.7 and 13.5 shall survive.
SECTION 13.3 DEPOSITED MONEYS TO BE HELD IN TRUST.
All moneys or Governmental Obligations deposited with the Trustee
pursuant to SECTIONS 13.1 or 13.2 shall be held in trust and shall be available
for payment as due, either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the Debentures for
the payment or redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to SECTION 13.1 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the holders of Outstanding Debentures.
SECTION 13.4 PAYMENT OF MONEYS HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this Indenture,
all moneys or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from all further
liability with respect to such moneys or Governmental Obligations.
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SECTION 13.5 REPAYMENT TO COMPANY.
Any moneys or Governmental Obligations deposited with any paying agent
or the Trustee, or then held by the Company in trust, for payment of principal
of or interest on the Debentures that are not applied but remain unclaimed by
the holders of such Debentures for at least two years after the date upon which
the principal of or interest on such Debentures shall have respectively become
due and payable, shall be repaid to the Company, as the case may be, on June 30
of each year or (if then held by the Company) shall be discharged from such
trust; and thereupon the paying agent and the Trustee shall be released from
all further liability, with respect to such moneys or Governmental Obligations,
and the holder of any of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company for the
payment thereof.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.1 NO RECOURSE.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of the Debentures, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, 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 this
Indenture and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever shall attach to, or
is or shall be incurred by, the incorporators, shareholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either
at common law or in equity or by constitution or statute, of, and any and all
such rights and claims against, every such incorporator, shareholder, officer
or director as such, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom,
are hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of such
Debentures.
ARTICLE XV
MISCELLANEOUS PROVISIONS
SECTION 15.1 EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind their respective
successors and assigns, whether so expressed or not.
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SECTION 15.2 ACTIONS BY SUCCESSOR.
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
corresponding board, committee or officer of any corporation that shall at the
time be the lawful sole successor of the Company.
SECTION 15.3 SURRENDER OF COMPANY POWERS.
The Company by instrument in writing executed by appropriate authority
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, as the case may be, and as to any successor
corporation.
SECTION 15.4 NOTICES.
Except as otherwise expressly provided herein any notice or demand
that by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures to or on the Company may
be given or served by being deposited first class postage prepaid in a
post-office letter box addressed (until another address is filed in writing by
the Company with the Trustee), as follows: Southside Bancshares, Inc., 0000 X.
Xxxxxxx, Xxxxx, Xxxxx 00000, Attention: Xxx Xxxxxx, Executive Vice President.
Any notice, election, request or demand by the Company or any Debentureholder
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 Corporate Trust Office of
the Trustee.
SECTION 15.5 GOVERNING LAW.
This Indenture and each Debenture shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
construed in accordance with the laws of said State without regard to conflicts
of laws principles.
SECTION 15.6 TREATMENT OF DEBENTURES AS DEBT.
It is intended that the Debentures shall be treated as indebtedness
and not as equity for federal income tax purposes. The provisions of this
Indenture shall be interpreted to further this intention.
SECTION 15.7 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) 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 all
conditions precedent 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 in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
(b) Each certificate or opinion of the Company provided for in
this Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include (i) a
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statement that the Person making such certificate or opinion has read such
covenant or condition; (ii) 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; (iii) a statement that, in the opinion
of such Person, he has made such examination or investigation as, in the
opinion of such Person, is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (iv) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
SECTION 15.8 PAYMENTS ON BUSINESS DAYS.
In any case where the date of maturity of interest or principal of any
Debenture or the date of redemption of any Debenture shall not be a Business
Day, then payment of interest or principal may (subject to SECTION 2.4) be made
on the next succeeding Business Day with the same force and effect as if made
on the nominal date of maturity or redemption, and no interest shall accrue for
the period after such nominal date.
SECTION 15.9 CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 15.10 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.
SECTION 15.11 SEVERABILITY.
In case any one or more of the provisions contained in this Indenture
or in the Debentures 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 the Debentures,
but this Indenture and the Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 15.12 ASSIGNMENT.
The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company shall 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 15.13 ACKNOWLEDGMENT OF RIGHTS.
The Company acknowledges that, with respect to any Debentures held by
the Trust or a trustee of the Trust, if the Property Trustee fails to enforce
its rights under this Indenture as the holder of the Debentures held as the
assets of the Trust, any holder of Preferred Securities may institute legal
proceedings directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any other person or entity. Notwithstanding
the foregoing,
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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 principal on the
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), the Company acknowledges that
a holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder on or after the respective due date
specified in the Debentures.
ARTICLE XVI
SUBORDINATION OF DEBENTURES
SECTION 16.1 AGREEMENT TO SUBORDINATE.
The Company covenants and agrees, and each holder of Debentures, by
such holder's acceptance thereof, likewise covenants and agrees that all
Debentures shall be issued subject to the provisions of this Article; and each
holder of a Debenture, 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 principal of and interest on all Debentures
issued hereunder 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 Debt and Subordinated Debt (collectively, "Senior Indebtedness") to
the extent provided herein, whether outstanding at the date of this Indenture
or thereafter incurred. No provision of this Article shall prevent the
occurrence of any default or Event of Default hereunder.
SECTION 16.2 DEFAULT ON SENIOR DEBT OR SUBORDINATED DEBT.
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, or in the event that the maturity of any
Senior Indebtedness of the Company has been accelerated because of a default,
then, in either case, no payment shall be made by the Company with respect to
the principal (including redemption payments) of or interest on the Debentures.
In the event that, notwithstanding the foregoing, any payment shall be received
by the Trustee when such payment is prohibited by the preceding sentence of
this Section, such payment shall 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 Company or 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 16.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) 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 liquidation, dissolution or winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of the Company, 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 or interest on the
Debentures; and upon any such liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors, marshaling of assets,
any payment by the Company
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or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the holders of the Debentures or the
Trustee would be entitled to receive from the Company, except for the
provisions of this Article, 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 holders of the Debentures 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 holders of Debentures or
to the Trustee.
(b) 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, as the case may be, 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.
(c) For purposes of this Article, 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 with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment;
and (ii) 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 or transfer of its property as an entirety, or substantially as
an entirety, to another corporation upon the terms and conditions provided for
in ARTICLE XII 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 XII. Nothing in SECTION 16.2 or in this
Section shall apply to claims of, or payments to, the Trustee under or pursuant
to SECTION 9.7.
SECTION 16.4 SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness of
the Company, the rights of the holders of the Debentures 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, as the case may
be, applicable to such Senior Indebtedness until the principal of and interest
on the Debentures shall be paid in full; and for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
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Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article, and no payment over pursuant to the provisions of this Article to or
for the benefit of the holders of such Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors (other
than holders of Senior Indebtedness of the Company) and the holders of the
Debentures, be deemed to be a payment by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article are
and are intended solely for the purposes of defining the relative rights of the
holders of the Debentures, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
(b) Nothing contained in this Article or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors (other than the holders of Senior Indebtedness of the
Company) and the holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of the Debentures
the principal of and interest on the Debentures 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 holders of the Debentures and creditors
of the Company, as the case may be, other than the holders of Senior
Indebtedness of the Company, nor shall anything herein or therein prevent the
Trustee or the holder of any Debenture from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of such Senior Indebtedness
in respect of cash, property or securities of the Company, as the case may be,
received upon the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of ARTICLE
IX, and the holders of the Debentures 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 holders of the Debentures, for the purposes of
ascertaining the Persons entitled to participate in such distribution, the
holders of Senior Indebtedness and other indebtedness of the Company, as the
case may be, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article.
SECTION 16.5 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each holder of Debentures by such holder's acceptance thereof
authorizes and directs the Trustee on such holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee such holder's attorney-in-fact for any
and all such purposes.
SECTION 16.6 NOTICE BY THE COMPANY.
(a) The Company shall give prompt written notice to a Responsible
Officer 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
Debentures pursuant to the provisions of this Article. Notwithstanding the
provisions of this Article or any other provisions of this Indenture, 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 Debentures pursuant to the provisions of this Article, unless
and until a Responsible Officer 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 SECTION 9.1, shall be
entitled in all respects to assume that no such facts exist;
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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 interest on
any Debenture), 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.
(b) The Trustee, subject to the provisions of SECTION 9.1, shall
be entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder) to establish that such notice
has been given by a holder of such Senior Indebtedness or a trustee 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, the Trustee may request that such Person
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, 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 16.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
(a) The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article 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 shall deprive the Trustee of any of
its rights as such holder. The Trustee's right to compensation and
reimbursement of expenses as set forth in SECTION 9.7 shall not be subject to
the subordination provisions of this Article.
(b) 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, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to have any fiduciary duty to the holders of such
Senior Indebtedness and, subject to the provisions of SECTION 9.1, the Trustee
shall not be liable to any holder of such Senior Indebtedness if it shall in
good faith mistakenly pay over or deliver to holders of Debentures, 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 or otherwise.
SECTION 16.8 SUBORDINATION MAY NOT BE IMPAIRED.
(a) 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.
(b) 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
holders of the Debentures, without incurring responsibility to the holders of
the Debentures and without impairing or releasing the subordination provided in
this Article or the obligations hereunder of the
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holders of the Debentures to the holders of such Senior Indebtedness, do any
one or more of the following: (i) 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; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing such Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of such Senior Indebtedness; and (iv) exercise or refrain from exercising any
rights against the Company and any other Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
SOUTHSIDE BANCSHARES, INC.
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
U.S. TRUST COMPANY OF TEXAS, N.A., AS TRUSTEE
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
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EXHIBIT A
FACE OF DEBENTURE
NO.______ $__________
CUSIP NO. ________
SOUTHSIDE BANCSHARES, INC.
____% SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE JUNE 30, 2028
[TO BE INCLUDED ONLY ON A DEBENTURE WHICH IS A GLOBAL SECURITY. THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
SOUTHSIDE BANCSHARES, INC., a Texas corporation (the "Company," which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to U.S. Trust Company
of Texas, N.A., as Property Trustee for Southside Capital Trust I, or
registered assigns, the principal sum of __________________________ Dollars
($________) on June 30, 2028 (the "Stated Maturity"), and to pay interest on
said principal sum from June 30, 1998, or from the most recent interest payment
date (each such date, an "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 31, June 30, September 30 and December 31 of each year
commencing June 30, 1998, at the rate of ____% per annum until the principal
hereof shall have become due and payable, and on any overdue principal and
(without duplication) on any overdue installment of interest (to the extent
permitted under applicable law) at the rate of ___% per annum compounded
quarterly. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on this Debenture is not a
Business Day (as defined in the Indenture), then payment of interest payable on
such date shall be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the preceding Business Day, in each case with the same
force and effect as if made on such date. The interest installment so payable,
and punctually, paid or duly provided for, on any Interest Payment Date shall,
as provided in the Indenture, be paid to the person in whose name this
Debenture (or one or more Predecessor Debentures, as defined in said Indenture)
is registered at the close of business on the regular record date for such
interest installment, which shall be the close of business on the Business Day
next preceding such Interest Payment Date unless otherwise provided in the
Indenture. Any such interest installment not punctually paid or duly provided
for shall forthwith cease to be payable to the registered holders on such
regular record date and may be paid to the Person in whose name this Debenture
(or one or more Predecessor Debentures) is registered at the close of business
on a special record date to be fixed by the Trustee (as defined in the
Indenture) for the payment of such defaulted interest, notice whereof shall be
given to the registered holders of the Debentures not less than 10 days prior
to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Debentures may be listed, and upon such notice as may be required by
such exchange, all as
59
more fully provided in the Indenture. The principal of and the interest on
this Debenture shall be payable at the office or agency of the Trustee
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 holder at such address
as shall appear in the Debenture Register (as defined in the Indenture) or by
wire transfer to an account maintained by the holder as specified in the
Debenture Register. Notwithstanding the foregoing, so long as the holder of
this Debenture is the Property Trustee, the payment of the principal of and
interest on this Debenture shall be made at such place and to such account as
may be designated by the Trustee.
The indebtedness evidenced by this Debenture 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 (as defined in the Indenture),
and this Debenture is issued subject to the provisions of the Indenture with
respect thereto. Each holder of this Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions; (b) authorizes and directs the
Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided; and (c)
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Each holder hereof, by his or her 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 holder upon said
provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, 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.
This Debenture shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be construed in accordance
with the laws of the State of New York without regard to conflicts of laws
principles.
The provisions of this Debenture 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.
2
60
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed as of the _____ day of _____________, 1998.
SOUTHSIDE BANCSHARES, INC.
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
Attest:
-------------------------------
By:
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
61
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned
Indenture. Dated:
U.S. Trust Company of Texas, or Authentication Agent
N.A. as Trustee
By: By:
------------------------------- ------------------------------
Authorized Signatory Title:
---------------------------
2
62
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security
certificate to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
agent to transfer
----------------------------------------------------------
this Security certificate on the books of the Company. The agent may substitute
another to act for him or her.
Date:
---------------------------------------------
Signature:
----------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee(1):
---------------------------------------------------------
---------------
1. Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
3
00
XXXXXXX XX XXXXXXXXX
____% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
(CONTINUED)
This Debenture is one of the subordinated debentures of the Company
(herein sometimes referred to as the "Debentures"), specified in the Indenture,
all issued or to be issued under and pursuant to an Indenture dated as of May
__, 1998 (the "Indenture") duly executed and delivered between the Company and
U.S. Trust Company of Texas, N.A., as Trustee (the "Trustee"), to which
Indenture 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 Debentures. The Debentures are limited in
aggregate principal amount as specified in the Indenture.
The Company has the right to redeem this Debenture at the option of
the Company, without premium or penalty (i) at any time on or after June 30,
2003 in whole or in part, or (ii) at any time in certain circumstances in whole
(but not in part) upon the occurrence of a Special Event (as defined in the
Indenture), in each case at a redemption price equal to 100% of the principal
amount plus any accrued but unpaid interest, to the date of such redemption
(the "Redemption Price"). The Redemption Price shall be paid prior to 12:00
noon, New York City time, on the date of such redemption or at such earlier
time as the Company determines. Any redemption pursuant to this paragraph
shall be made upon not less than 30 days nor more than 60 days notice, at the
Redemption Price. If the Debentures are only partially redeemed by the
Company, the Debentures shall be redeemed pro rata or by lot or by any other
method utilized by the Trustee.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof shall be issued in
the name of the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
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 Debentures at the time Outstanding (as
defined 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 holders of the Debentures; provided, however, that
no such supplemental indenture shall (i) extend the fixed maturity of the
Debentures except as provided in the Indenture, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon
64
(except for deferrals of interest as described below), without the consent of
the holder of each Debenture so affected; or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to consent to any
such supplemental indenture, without the consent of the holders of each
Debenture then outstanding and affected thereby. The Indenture also contains
provisions permitting the holders of a majority in aggregate principal amount
of the Debentures at the time outstanding, on behalf of all of the holders of
the Debentures, to waive 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 default in the payment of the principal of or
interest on any of the Debentures. Any such consent or waiver by the
registered holder of this Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and of any Debenture issued in exchange
therefor or in place thereof (whether by registration of transfer or otherwise
or whether any notation of such consent or waiver is made upon this Debenture).
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal and interest
on this Debenture at the time and place and at the rate and in the money herein
prescribed.
So long as no Event of Default (as defined in the Indenture) has
occurred and is continuing, the Company shall have the right at any time during
the term of the Debentures and from time to time to extend the interest payment
period of such Debentures for up to 20 consecutive quarters (each, an "Extended
Interest Payment Period"), at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate
specified for the Debentures to the extent that payment of such interest is
permitted under applicable law). Before the termination of any such Extended
Interest Payment Period, the Company may further extend such Extended Interest
Payment Period, provided that such Extended Interest Payment Period together
with all such further extensions thereof shall not exceed 20 consecutive
quarters. At the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any additional amounts
then due, the Company may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
holder hereof or his or her attorney duly authorized in writing, and thereupon
one or more new Debentures of authorized denominations and for the same
aggregate principal amount shall be issued to the designated transferee or
transferees. No service charge shall be made for any such transfer but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
2
65
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee, any paying agent and the Debenture
Registrar (as defined in the Indenture) may deem and treat the registered
holder hereof as the absolute owner hereof (whether or not this Debenture shall
be overdue and notwithstanding any notice of ownership or writing hereon made
by anyone other than the Debenture Registrar) for the purpose of receiving
payment of or on account of the principal hereof and interest due hereon and
for all other purposes, and neither the Company nor the Trustee nor any paying
agent nor any Debenture Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect of the Indenture, against any incorporator, shareholder, officer or
director, past, present or future, as such, of the Company or any predecessor
or successor corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released. The
Debentures are issuable only in registered form without coupons in
denominations of $10 and any integral multiple thereof.
All terms used but not otherwise defined in this Debenture that are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
The Note is unsecured by any collateral, including the assets of the
Company or any of its subsidiaries or other affiliates.
3
