EXHIBIT 4.2
INDENTURE
BY AND BETWEEN
BCSB BANKCORP, INC.
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS TRUSTEE
FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES DUE JUNE 30, 2032
EFFECTIVE AS OF JUNE 27, 2002
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS................................................................................2
Section 1.1 Definitions of Terms..............................................................2
ARTICLE II ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE OF THE DEBENTURES........10
Section 2.1 Designation and Principal Amount.................................................10
Section 2.2 Maturity.........................................................................10
Section 2.3 Form and Payment.................................................................10
Section 2.4 Intentionally Left Blank.........................................................11
Section 2.5 Interest.........................................................................11
Section 2.6 Execution and Authentications....................................................13
Section 2.7 Registration of Transfer and Exchange............................................14
Section 2.8 Temporary Debentures.............................................................17
Section 2.9 Mutilated, Destroyed, Lost or Stolen Debentures..................................18
Section 2.10 Cancellation.....................................................................18
Section 2.11 Benefit of Indenture.............................................................19
Section 2.12 Authentication Agent.............................................................19
ARTICLE III REDEMPTION OF DEBENTURES..................................................................20
Section 3.1 Special Event Redemption.........................................................20
Section 3.2 Optional Redemption by Company...................................................20
Section 3.3 Notice of Redemption.............................................................21
Section 3.4 Payment Upon Redemption..........................................................22
Section 3.5 No Sinking Fund..................................................................23
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD......................................................23
Section 4.1 Extension of Interest Payment Period.............................................23
Section 4.2 Notice of Extension..............................................................23
Section 4.3 Limitation on Transactions.......................................................24
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY.......................................................25
Section 5.1 Payment of Principal and Interest................................................25
Section 5.2 Maintenance of Agency............................................................25
Section 5.3 Paying Agents....................................................................25
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TABLE OF CONTENTS
(continued)
Section 5.4 Appointment to Fill Vacancy in Office of Trustee.................................26
Section 5.5 Compliance with Consolidation Provisions.........................................26
Section 5.6 Limitation on Transactions.......................................................27
Section 5.7 Covenants as to the Trust........................................................27
Section 5.8 Covenants as to Purchases........................................................28
Section 5.9 Waiver of Usury, Stay or Extension Laws..........................................28
ARTICLE VI DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE........................28
Section 6.1 Company to Furnish Trustee Names and Addresses of Debentureholders...............28
Section 6.2 Preservation of Information Communications with Debentureholders.................29
Section 6.3 Reports by the Company...........................................................29
Section 6.4 Reports by the Trustee...........................................................30
ARTICLE VII REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT..........................31
Section 7.1 Events of Default................................................................31
Section 7.2 Collection of Indebtedness and Suits for Enforcement by Trustee..................32
Section 7.3 Application of Money Collected...................................................34
Section 7.4 Limitation on Suits..............................................................34
Section 7.5 Rights and Remedies Cumulative; Delay or Omission not Waiver.....................35
Section 7.6 Control by Debentureholders......................................................35
Section 7.7 Undertaking to Pay Costs.........................................................36
Section 7.8 Direct Action; Right of Set-Off..................................................36
ARTICLE VIII FORM OF DEBENTURE AND ORIGINAL ISSUE......................................................37
Section 8.1 Form of Debenture................................................................37
Section 8.2 Original Issue of Debentures.....................................................37
ARTICLE IX CONCERNING THE TRUSTEE....................................................................37
Section 9.1 Certain Duties and Responsibilities of the Trustee...............................37
Section 9.2 Notice of Defaults...............................................................38
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TABLE OF CONTENTS
(continued)
Section 9.3 Certain Rights of Trustee........................................................39
Section 9.4 Trustee Not Responsible for Recitals, etc........................................40
Section 9.5 May Hold Debentures..............................................................40
Section 9.6 Moneys Held in Trust.............................................................40
Section 9.7 Compensation and Reimbursement...................................................40
Section 9.8 Reliance on Officers' Certificate................................................41
Section 9.9 Disqualification; Conflicting Interests..........................................41
Section 9.10 Corporate Trustee Required; Eligibility..........................................41
Section 9.11 Resignation and Removal; Appointment of Successor................................42
Section 9.12 Acceptance of Appointment by Successor...........................................43
Section 9.13 Merger, Conversion, Consolidation or Succession to Business......................44
Section 9.14 Preferential Collection of Claims Against the Company............................44
ARTICLE X CONCERNING THE DEBENTUREHOLDERS...........................................................44
Section 10.1 Evidence of Action by Holders....................................................44
Section 10.2 Proof of Execution by Debentureholders...........................................45
Section 10.3 Who May be Deemed Owners.........................................................45
Section 10.4 Certain Debentures Owned by Company Disregarded..................................45
Section 10.5 Actions Binding on Future Debentureholders.......................................46
ARTICLE XI SUPPLEMENTAL INDENTURES...................................................................46
Section 11.1 Supplemental Indentures Without the Consent of Debentureholders..................46
Section 11.2 Supplemental Indentures with Consent of Debentureholders.........................47
Section 11.3 Effect of Supplemental Indentures................................................48
Section 11.4 Debentures Affected by Supplemental Indentures...................................48
Section 11.5 Execution of Supplemental Indentures.............................................48
ARTICLE XII SUCCESSOR CORPORATION.....................................................................49
Section 12.1 Company May Consolidate, etc.....................................................49
Section 12.2 Successor Person Substituted.....................................................49
Section 12.3 Evidence of Consolidation, etc. to Trustee.......................................50
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TABLE OF CONTENTS
(continued)
ARTICLE XIII SATISFACTION AND DISCHARGE................................................................50
Section 13.1 Satisfaction and Discharge of Indenture..........................................50
Section 13.2 Discharge of Obligations.........................................................50
Section 13.3 Deposited Money to be Held in Trust..............................................51
Section 13.4 Payment of Money Held by Paying Agents...........................................51
Section 13.5 Repayment to Company.............................................................52
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................52
Section 14.1 No Recourse......................................................................52
ARTICLE XV MISCELLANEOUS PROVISIONS..................................................................52
Section 15.1 Effect on Successors and Assigns.................................................52
Section 15.2 Actions by Successor.............................................................53
Section 15.3 Surrender of Company Powers......................................................53
Section 15.4 Notices..........................................................................53
Section 15.5 Governing Law....................................................................53
Section 15.6 Treatment of Debentures as Debt..................................................53
Section 15.7 Compliance Certificates and Opinions.............................................54
Section 15.8 Payments on Business Days........................................................54
Section 15.9 Application of Trust Indenture Act; Conflict.....................................54
Section 15.10 Counterparts.....................................................................55
Section 15.11 Severability.....................................................................55
Section 15.12 Assignment.......................................................................55
Section 15.13 Acknowledgment of Rights; Right of Set Off.......................................55
ARTICLE XVI SUBORDINATION OF DEBENTURES...............................................................56
Section 16.1 Agreement to Subordinate.........................................................56
Section 16.2 Default on Senior Debt, Subordinated Debt or Additional Senior Obligations.......56
Section 16.3 Liquidation; Dissolution; Bankruptcy.............................................56
Section 16.4 Subrogation......................................................................58
Section 16.5 Trustee to Effectuate Subordination..............................................59
Section 16.6 Notice by the Company............................................................59
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TABLE OF CONTENTS
(continued)
Section 16.7 Rights of the Trustee; Holders of Senior Indebtedness............................60
Section 16.8 Subordination may not be Impaired................................................60
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INDENTURE
---------
THIS INDENTURE, effective as of June 27, 2002, between BCSB Bankcorp, Inc.,
a Maryland corporation (the "Company") and Xxxxx Fargo Bank, National
Association, a national banking association with its principal place of business
in the State of Delaware (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
securities to be known as Floating Rate Junior Subordinated Deferrable Interest
Debentures due June 30, 2032 (hereinafter referred to as the "Debentures"), the
form and substance of such Debentures and the terms, provisions and conditions
thereof to be set forth as provided in this Indenture;
WHEREAS, BCSB Bankcorp Capital Trust I, a Delaware statutory business trust
(the "Trust"), has offered in a private placement up to Twelve Million Five
Hundred Thousand Dollars ($12,500,000) aggregate liquidation amount of its Trust
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 up to Three Hundred Eighty Seven Thousand Dollars
($387,000) aggregate liquidation amount of its Common Securities (as defined
herein), in up to Twelve Million Eight Hundred Eighty Seven Thousand Dollars
($12,887,000) aggregate principal amount of the Debentures;
WHEREAS, the Company has requested that the Trustee execute and deliver
this Indenture;
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;
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 set forth herein 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 as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS OF TERMS.
---------------------
The terms defined in this Section 1.1 (except as otherwise expressly
provided in this Indenture or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.1 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 and defined in the Securities Act (except as herein otherwise
expressly provided or unless the 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 and as may be
amended from time to time. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
Generally Accepted Accounting Principles.
"Accelerated Maturity Date" means if the Company elects to accelerate the
Maturity Date in accordance with Sections 2.2 (b) and 2.2(c), the date selected
by the Company which is prior to the Scheduled Maturity Date, but is on an
Interest Payment Date after June 30, 2007.
"Additional Interest" means interest earned and to be paid on interest that
was not timely paid.
"Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of this Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations does not include claims in
respect of Senior Debt or Subordinated Debt or obligations which, by their
terms, are expressly stated to be not superior in right of payment to the
Debentures or to rank pari passu in right of payment with the Debentures. For
purposes of this definition, "claim" shall have the meaning assigned thereto in
Section 101(4) of the United States Bankruptcy Code of 1978, as amended.
"Additional Sums" shall have the meaning set forth in Section 2.5 (g).
"Administrative Trustees" shall have the meaning set forth in the Trust
Agreement.
"Affiliate" means, with respect to a specified Person, (i) 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; (ii) 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; (iii) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (iv) a partnership in which the specified Person is a
general partner; (v) any officer or director of the specified Person; and (vi)
if the specified Person is an individual, any entity of which the specified
Person is an officer, director or general partner.
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"Authenticating Agent" means an authenticating agent with respect to the
Debentures appointed by the Trustee pursuant to Section 2.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such Board or any other duly designated officers of
the Company.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification.
"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
Delaware or Minnesota 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.
"Calculation Agent" shall have the meaning set forth in Section 2.5(d)(i).
"Capital Treatment Event" means the receipt by the Company and the Trust of
an Opinion of Counsel, rendered by a law firm having a recognized national bank
regulatory practice, to the effect that, as a result of (a) any amendment to, or
change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision
thereof or therein, or (b) any official or administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which amendment or change is effective or which pronouncement or decision is
announced on or after the date of issuance of the Trust Preferred Securities
under the Trust Agreement, there is more than an insubstantial risk of
impairment of the Company's ability to treat the Trust Preferred Securities (or
any substantial portion thereof) as Tier 1 capital (or the then equivalent
thereof), for purposes of the capital adequacy guidelines of the Federal Reserve
(or any successor thereto), as then in effect and applicable to the Company;
provided, however, that the Trust or the Company shall have requested and
received such an 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 probable occurrence of any such event.
"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.
"Common Securities" means undivided common beneficial interests in the
assets of the Trust that rank pari passu with the Trust Preferred Securities;
provided, however, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in
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respect of distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights of holders of Trust Preferred Securities.
"Company" means BCSB Bankcorp, Inc., a corporation duly organized and
validly existing under the laws of the State of Maryland, 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 or the Property
Trustee at which, at any particular time, its corporate trust business shall be
principally administered.
"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 2.7(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 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; and (vi) 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.
"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.
4
"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 thereto, 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.
"Floating Interest Rate" shall have the meaning set forth in Section
2.5(a).
"Generally Accepted Accounting Principles" means such accounting principles
as are generally accepted at the time of any computation required hereunder.
"Governmental Obligations" means securities that are (i) direct obligations
of the United States of America 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 of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository 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 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 depository 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.
"Herein," "hereof," and "hereunder," and other words of similar import,
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision.
"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," has the meaning specified in Section 2.5(a).
"Interest Reset Date" has the meaning specified in Section 2.5(d).
"Investment Company Act," means the Investment Company Act of 1940 or any
successor statute thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Trust and the Company
of an Opinion of Counsel, rendered by a law firm having a recognized national
securities law practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in
5
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 Trust
Preferred Securities under the Trust Agreement; provided, however, that the
Trust or the Company shall have requested and received such an 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 a Change in 1940 Act Law.
"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.
"Ministerial Action" shall have the meaning set forth in Section 3.1.
"Officers' Certificate" means a certificate signed by the Chief Executive
Officer, President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary of the Company that is
delivered to the Trustee in accordance with the terms hereof. Each such
certificate shall include the statements provided for in Section 15.7, if and to
the extent required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of independent, outside
legal counsel for the Company that is delivered to the Trustee in accordance
with the terms hereof. Each such opinion shall include the statements provided
for in Section 15.7, if and to the extent required by the provisions thereof.
"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 (i) 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; (ii) Debentures or portions thereof for the payment or
redemption of which money 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; and (iii) Debentures in lieu of or
in substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.7; provided, however, that in
determining whether the holders of the requisite percentage of Debentures have
given any such request, notice, consent or waiver hereunder, Debentures held by
the Company or any Affiliate of the Company shall not be included; provided,
further, that the Trustee shall be protected in acting or relying upon any
request, notice, consent or waiver unless a Responsible Officer of the Trustee
shall have actual knowledge that the holder of any such Debenture is the Company
or an Affiliate thereof.
6
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.3.
"Person" means any individual, corporation, partnership, trust, limited
liability company, joint venture, joint-stock company, unincorporated
organization or other entity or government or any agency or political
subdivision thereof.
"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 2.9 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Resale Restriction Termination Date" means, with respect to the offer,
sale or other transfer of a Debenture, (a) the date which is two years (or such
shorter period of time as permitted by Rule 144(k) under the Securities Act)
after the later of the original issue date of such Debenture and the last date
on which the Company or any Affiliate of the Company was the owner of such
Debenture (or any predecessor of the Debenture) and (b) such later date, if any,
as may be required by applicable laws.
"Redemption Date" shall have the meaning set forth in Section 3.2(a).
"Redemption Price" shall have the meaning set forth in Section 3.1.
"Responsible Officer" when used with respect to the Trustee means any
officer within the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Indenture, including any vice
president, any assistant vice president, any assistant secretary 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
or to whom such corporate trust matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Scheduled Maturity Date" means June 30, 2032.
"Securities Act," means the Securities Act of 1933 or any successor statute
thereto, 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 all 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 owed which when
incurred and without respect to any election under Section 1111(b) of the
7
United States Bankruptcy Code of 1978, as amended, was without recourse to the
Company; (ii) Debt which by its terms is subordinated to trade accounts payable
or accrued liabilities arising in the ordinary course of business; and (iii)
Debt which constitutes Subordinated Debt.
"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 Senior Debt of the Company (other than the Debentures); provided, however,
that Subordinated Debt will 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 which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business; (iii)
Debt which constitutes Senior Debt and (iv) any Debt of the Company under debt
securities (and guarantees in respect of these debt securities) initially issued
to any trust, or a trustee of a trust, partnership or other entity affiliated
with the Company that is, directly or indirectly, a financing vehicle of the
Company in connection with the issuance by that entity of preferred securities
or other securities which are intended to qualify for Tier 1 capital treatment
for purposes of the capital adequacy guidelines of the Federal Reserve, as then
in effect.
"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, limited liability company, joint venture 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 Company and the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized federal tax law practice, 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 Trust 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
8
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; provided, however, that the Trust or the Company shall have requested
and received such an 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 occurrence or the possible occurrence of any of the events described in
clauses (i) through (iii) above.
"Three-Month LIBOR" shall have the meaning set forth in Section 2.5(d).
"Trust" means BCSB Bankcorp Capital Trust I, a Delaware statutory business
trust.
"Trust Agreement" means the Amended and Restated Trust Agreement, effective
as of June 27, 2002, of the Trust, as amended from time to time.
"Trust Preferred Securities" means undivided preferred beneficial interests
in the assets of the Trust that 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 Trust Preferred Securities.
"Trust Preferred Securities Guarantee" means any guarantee that the Company
may enter into with the Trustee or other Persons that operates directly or
indirectly for the benefit of holders of Trust Preferred Securities.
"Trustee" means Xxxxx Fargo Bank, National Association and, subject to the
provisions of Article IX, shall also include its successors and assigns in each
such Person's capacity as trustee hereunder, 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 or any
successor statute thereto, in each case as amended from time to time.
"Trust Securities" means the Common Securities and Trust 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.
9
ARTICLE II
ISSUE, DESCRIPTION, TERMS, CONDITIONS,
REGISTRATION AND EXCHANGE OF THE DEBENTURES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
---------------------------------
There is hereby authorized Debentures designated the "Floating Rate Junior
Subordinated Deferrable Interest Debentures due June 30, 2032," limited in
aggregate principal amount to Twelve Million Eight Hundred Eighty Seven Thousand
Dollars ($12,887,000) which amount shall be as set forth in any written order of
the Company for the authentication and delivery of Debentures pursuant to
Section 2.6.
SECTION 2.2 MATURITY.
---------
(a) The Maturity Date shall be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to accelerate the Maturity Date to be a
date prior to the Scheduled Maturity Date in accordance with
Sections 2.2(b) and 2.2(c), the Accelerated Maturity Date.
(b) The Company may at any time before the day which is 90 days before
the Scheduled Maturity Date and after June 30, 2007, elect to shorten the
Maturity Date only once to the Accelerated Maturity Date provided that the
Company has received the prior approval of the Federal Reserve if then
required under applicable capital guidelines, policies or regulations of
the Federal Reserve.
(c) If the Company elects to accelerate the Maturity Date in
accordance with Section 2.2(b), the Company shall give notice to the
Trustee and the Trust (unless the Property Trustee is not the holder of the
Debentures, in which case the Trustee will give notice to the holders of
the Debentures) of the acceleration of the Maturity Date and the
Accelerated Maturity Date at least 30 days and no more than 180 days before
the Accelerated Maturity Date.
SECTION 2.3 FORM AND PAYMENT.
-----------------
The Debentures shall be issued in certificated form, registered in the name
of the holder thereof, without interest coupons. The Debentures, including the
Certificate of Authentication, shall be substantially in the form of Exhibit A
hereto. Prior to the Resale Restriction Termination Date, the Debentures will be
issued and may only be transferred in a minimum aggregate principal amount of
$100,000. Subsequent to the Resale Restriction Termination Date, the Debentures
may only be transferred in a minimum aggregate principal amount of $100,000. Any
attempted transfer not in accordance with the preceding two sentences shall be
void and of no effect whatsoever.
10
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 or through 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 maintained by the holder as specified in the
Debenture Register, provided that the holder provides proper 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
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.
SECTION 2.4 INTENTIONALLY LEFT BLANK.
-------------------------
SECTION 2.5 INTEREST.
---------
(a) Each Debenture shall bear interest at the rate of
[________________] per annum over the Three-Month LIBOR Rate, calculated on
each Interest Reset Date (the "Floating Interest 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 Floating Interest Rate, compounded quarterly, payable (subject to
the provisions of Article IV) quarterly in arrears on March 30, June 30,
September 30 and December 30 of each year (each such date, an "Interest
Payment Date," and each quarterly period, an "Interest Payment Period"),
commencing on September 30, 2002 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, which shall be the 15th
of the last month of each Interest Payment Period.
(b) The Floating Interest Rate for each Interest Payment Period will
be set on the second London business day preceding each Interest Payment
Date; provided, that the initial Floating Interest Rate will be set on June
27, 2002 and will not be reset until September 28, 2002, until the
principal on the Debentures is paid or made available for payment. If the
Interest Reset Date is not a Business Day, then such Interest Reset Date
shall be the next succeeding day which is a Business Day. In no event shall
the Floating Interest Rate exceed 12% prior to June 30, 2007.
(c) The amount of interest payable for any Interest Payment Period
shall be computed on the basis of a 360-day year of twelve 30-day months.
The amount of interest payable for any period shorter than a full quarterly
Interest Payment Period for which interest is computed, shall be computed
on the basis of the number of days elapsed in a 360-day year of twelve
30-day months. 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 (and
without any reduction of interest or any other
11
payment in respect of any such acceleration), in each case with the same
force and effect as if made on the date such payment was originally
payable.
(d) The "Three-Month LIBOR Rate" shall mean the rate determined in
accordance with the following provisions:
(i) On the second London business day preceding each Interest Payment
Date (each such date, an "Interest Reset Date"), Xxxxx Fargo
Bank, National Association (the "Calculation Agent"), will
determine the Three-Month LIBOR Rate which shall be the rate for
deposits in the London interbank market in U.S. dollars having a
three-month maturity commencing on the second London business day
immediately following such Interest Reset Date which appears on
the Telerate Page 3750 as of 11:00 a.m., London time, on such
Interest Reset Date. "Telerate Page 3750" means the display on
Page 3750 of the Dow Xxxxx Telerate Service (or such other page
as may replace that page on that service for the purpose of
displaying London interbank offered rates of major banks for U.S.
dollar deposits). If the Three-Month LIBOR Rate on such Interest
Reset Date does not appear on the Telerate Page 3750, such
Three-Month LIBOR Rate will be determined as described in (ii)
below. London business day means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank
market.
(ii) With respect to an Interest Reset Date for which the Three-Month
LIBOR Rate does not appear on the Telerate Page 3750 as specified
in (i) above, the Calculation Agent will request the principal
London offices of each of Barclays Bank PLC, Midland Bank PLC and
National Westminster Bank PLC to provide the Calculation Agent
with its offered quotation for deposits in U.S. dollars having a
three-month maturity commencing on the second London business day
immediately following such Interest Reset Date to prime banks in
the London interbank market at approximately 11:00 a.m., London
time, on such Interest Reset Date and in a principal amount that
is representative for a single transaction in such market at such
time. If at least two such quotations are provided, the
Three-Month LIBOR Rate on such Interest Reset Date will be the
arithmetic mean (rounded upwards, if necessary, to the nearest
one hundred-thousandth of a percentage point, with five or more
one-millionths of one percentage point rounded upwards) of such
quotations. If fewer than two quotations are provided, the
Three-Month LIBOR Rate determined on such Interest Reset Date
will be the arithmetic mean (rounded upwards, if necessary, to
the nearest one hundred-thousandth of a percentage point, with
five or more one-millionths of one percentage point rounded
upwards) of the rates quoted at approximately 11:00 a.m., New
York City time, on such Interest Reset Date for loans in U.S.
dollars to leading European banks, having a three-month maturity
commencing on the second London business day immediately
following such Interest Reset Date and in a principal amount that
is representative for a single transaction in such market at such
time
12
by X.X. Xxxxxx Chase & Co, Citibank and Bank of New York in New
York City; provided, however, if the banks so selected by the
Calculation Agent are not quoting as aforesaid, the Three-Month
LIBOR Rate with respect to such Interest Reset Date will be the
Three-Month LIBOR Rate in effect on such Interest Reset Date.
(e) The Floating Interest Rate and amount of interest to be paid on
the Debentures for each Interest Payment Period will be determined by the
Calculation Agent. All calculations made by the Calculation Agent shall, in
the absence of manifest error, be conclusive for all purposes and binding
on the Company and Holders of the Debentures. So long as the Three-Month
LIBOR Rate is required to be determined with respect to the Debentures,
there will at all times be a Calculation Agent. In the event that any then
acting Calculation Agent shall be unable or unwilling to act, or that such
Calculation Agent shall fail duly to establish the Three-Month LIBOR Rate
for any Interest Payment Period, or that the Company proposes to remove
such Calculation Agent, the Company shall appoint another Person which is a
bank, trust company, investment banking firm or other financial institution
to act as the Calculation Agent.
(f) The Trustee shall provide written notice of the Floating Interest
Rate as certified by the Calculation Agent to each holder of Debentures as
set forth in the Debenture Register no later than five Business Days
following each Interest Reset Date.
(g) 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 governmental charges of whatever nature imposed by
the United States, or any other taxing authority, then, in any case, the
Company shall pay as additional amounts ("Additional Sums") 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 government charges been imposed.
(h) The Floating Interest Rate will in no event be higher than the
maximum rate permitted by the law of the State of Maryland, or, if higher,
the law of the United States of America.
SECTION 2.6 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, if any, 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
ceased to be the Chief Executive Officer,
13
President or a Vice President, or the Secretary or an Assistant Secretary,
of the Company (and any such signature shall be binding on the Company).
The corporate seal of the Company, if any, 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. 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.
(b) 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
Treasurer or any Assistant Treasurer, and the Trustee in accordance with
such written order shall authenticate and deliver such Debentures.
(c) 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(b)) 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.
(d) 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 2.7 REGISTRATION OF TRANSFER AND EXCHANGE.
--------------------------------------
(a) Subject to Section 2.3, Debentures may be exchanged upon
presentation thereof at the office or agency of the Company designated for
such purpose in Wilmington, Delaware or at the office of the Debenture
Registrar, for other Debentures and for a like aggregate principal amount
in denominations of integral multiples of $1,000, upon payment of a sum
sufficient to cover any tax or other governmental charge in relation
thereto, all as provided in this Section 2.7. In respect of any Debentures
so surrendered for exchange, the Company shall execute, the Trustee, upon
written order of the Company, shall authenticate and such office or agency
shall deliver in exchange therefore 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 in Wilmington, Delaware or at the office
of the Debenture Registrar 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
14
Debentures as provided in this Article II 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 initially be the Trustee and thereafter as may be appointed by the
Company as authorized by Board Resolution (the "Debenture Registrar").
Subject to Section 2.3, 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, upon written order of the Company, shall
authenticate and such office or agency shall deliver 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 2.7,
shall be accompanied (if so required by the Company or 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) Notwithstanding anything herein to the contrary, Debentures may
not be transferred except in compliance with the restricted securities
legends set forth below, unless otherwise determined by the Company, upon
the advice of legal counsel, in accordance with applicable law:
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS DEBENTURE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION. PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER
PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT) AFTER
THE LATER OF (i) THE ORIGINAL ISSUE DATE HEREOF OR (ii) THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
DEBENTURE (OR ANY PREDECESSOR OF THIS DEBENTURE) AND (Y) SUCH LATER DATE,
IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION
TERMINATION DATE"), THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF
AGREES FOR THE BENEFIT OF THE COMPANY TO OFFER, SELL OR OTHERWISE TRANSFER
THIS DEBENTURE ONLY (A) TO THE COMPANY OR AN AFFILIATE OF THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS DEBENTURE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A ("RULE 144A") PROMULGATED UNDER THE SECURITIES
ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
15
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS DEBENTURE FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR,"
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE, TRANSFER OR OTHER
DISPOSITION (i) PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY BY
THE HOLDER OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO THE COMPANY TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (ii) IN EACH OF
THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS DEBENTURE IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE AND THE REGISTRAR IN CONNECTION WITH ANY
TRANSFER OF THIS DEBENTURE PRIOR TO THE RESALE RESTRICTION TERMINATION
DATE. THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
CERTIFICATE OF TRANSFER RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THE CERTIFICATE OF TRANSFER TO THE TRUSTEE AND THE REGISTRAR. THIS LEGEND
WILL BE REMOVED UPON REQUEST OF THE HOLDER AFTER THE EARLIER OF (i) THE
TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE (B) ABOVE OR
(ii) THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS DEBENTURE OF
THE RESALE RESTRICTIONS REFERRED TO HEREIN.
PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THIS DEBENTURE MAY BE
TRANSFERRED OR EXCHANGED ONLY IN A MINIMUM AGGREGATE PRINCIPAL AMOUNT OF
NOT LESS THAN $100,000. ANY ATTEMPTED TRANSFER OF THIS DEBENTURE IN AN
AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000 PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
EFFECT WHATSOEVER. AFTER SUCH RESALE RESTRICTION TERMINATION DATE, ANY
ATTEMPTED TRANSFER OF THIS DEBENTURE IN AN AGGREGATE PRINCIPAL AMOUNT OF
LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE
HOLDER OF THIS DEBENTURE FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO,
THE RIGHT TO RECEIVE INTEREST PAYMENTS ON THIS DEBENTURE, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN THIS
DEBENTURE.
16
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE
TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(d) 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 2.8, 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 15 business 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.
(e) Nothing herein withstanding, the Property Trustee shall not be
authorized, other than in the case of Default, to cause the transfer of a
Denture issued hereunder except (i) upon prior consent and authorization by
the Administrative Trustees or (ii) upon order of a court of competent
jurisdiction.
(f) Debentures may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Indenture. Any
transfer or purported transfer of any Debenture not made in accordance with
this Indenture shall be null and void.
SECTION 2.8 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 that purpose
in Wilmington, Delaware or such other office or agency as the Company shall
designate for that purpose pursuant to Section 5.2 hereof, and the Trustee shall
authenticate, upon written order of the Company, 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 authenticated 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.
17
SECTION 2.9 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 written order
and request the Trustee (subject as aforesaid) shall authenticate and
deliver, 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, stolen
or mutilated. 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 hold 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 deliver the
same upon the written order and request or authorization of the Chief
Executive Officer, President or any Vice President and the Treasurer or any
Assistant Treasurer 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
hold 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 2.9 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 (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 2.10 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
18
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 and deliver a certificate of disposition
to the Company. 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 2.11 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 the 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 being 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 the Senior Indebtedness).
SECTION 2.12 AUTHENTICATION AGENT.
---------------------
(a) So long as any of the Debentures remain Outstanding there may be
an Authenticating Agent for any or all such Debentures, and the Trustee
shall have the right to appoint such Authenticating Agent. Said
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. Each
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 any 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
immediately.
(b) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at
any time (and upon request by the Company shall) terminate the agency of
any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may
appoint an eligible successor Authenticating Agent acceptable to the
Company. Any 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.
19
ARTICLE III
REDEMPTION OF DEBENTURES
SECTION 3.1 SPECIAL EVENT REDEMPTION.
------------------------
If, prior to June 30, 2007, a Special Event has occurred and is continuing,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), 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 One Hundred Three Percent
(103%) 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 Trustee, the Trust or the holders of the Trust Securities
issued by the Trust, the Company shall pursue such Ministerial Action in lieu of
redemption. The Redemption Price shall be paid prior to 12:00 noon, New York
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 time, on the date
such Redemption Price is to be paid.
SECTION 3.2 OPTIONAL REDEMPTION BY COMPANY.
-------------------------------
(a) Subject to the provisions of Section 3.2(b), except as otherwise
may be specified in this Indenture, the Company shall have the right to
redeem the Debentures, in whole or in part, from time to time, on any
Interest Payment Date after June 30, 2007 (each a "Redemption Date"), at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest thereon to the Redemption Date. Any
redemption pursuant to this Section 3.2(a) 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 3.2, the Debentures shall be redeemed pro rata or
by lot or in such other manner as the Trustee shall in good xxxxx xxxx
appropriate and fair in its sole discretion. The Redemption Price shall be
paid prior to 12:00 noon, New York time, on the Redemption Date 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 time, on the Redemption Date.
(b) Any redemption of Debentures pursuant to Section 3.1 or Section
3.2 shall be subject to the Company obtaining the prior approval of the
Federal Reserve, if such approval is then required under the applicable
capital guidelines, policies or regulations of the Federal Reserve, and any
other required regulatory approvals.
(c) If a partial redemption of the Debentures would result in the
delisting of the Trust Preferred Securities issued by the Trust from any
national securities exchange
20
or other organization on which the Trust Preferred Securities are then
listed, if any, the Company shall not be permitted to effect such partial
redemption and may only redeem the Debentures in whole.
(d) Subject to the provisions of this Section 3.2, the Company shall
have the right to redeem Debentures in a principal amount equal to the
Liquidation Amount (as defined in the Trust Agreement) of any Trust
Preferred Securities purchased and beneficially owned by the Company, plus
an additional principal amount of Debentures equal to the Liquidation
Amount (as defined in the Trust Agreement) of that number of Common
Securities that bears the same proportion to the total number of Common
Securities then outstanding as the number of Trust Preferred Securities to
be redeemed bears to the total number of Trust Preferred Securities then
outstanding. Such Debentures shall be redeemed pursuant to this Section
3.2(d) only in exchange for and upon surrender by the Company to the
Property Trustee of the Trust Preferred Securities and a proportionate
amount of Common Securities, whereupon the Property Trustee shall cancel
the Trust Preferred Securities and Common Securities so surrendered and a
Like Amount (as defined in the Trust Agreement) of Debentures shall be
extinguished by the Trustee and shall no longer be deemed Outstanding.
SECTION 3.3 NOTICE OF REDEMPTION.
---------------------
In case the Company shall desire to exercise such right to redeem all or,
as the case may be, a portion of the Debentures in accordance with the
right reserved so to do, the Company shall, or shall cause the Trustee to
upon receipt of at least 45 days' written notice from the Company (which
notice shall, in the event of a partial redemption, include a
representation to the effect that such partial redemption will not result
in the delisting of the Trust Preferred Securities as described in Section
3.2(c) above), give 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 180 days before the date
fixed for redemption to such holders at their last addresses as they shall
appear upon the Debenture Register unless a shorter period is specified in
the Debentures to be redeemed. 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 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 of the Trustee, 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
21
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 will
be issued to the holder. 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, pro rata or by lot or in such other manner as it shall in good
xxxxx xxxx appropriate and fair in its sole discretion, the portion or
portions (equal to $1,000 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 3.3, such notice to be in the name of the Company or its own name
as the Trustee or such Paying Agent may deem advisable. 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 3.3.
SECTION 3.4 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).
(b) Upon presentation of any Debenture that is to be redeemed in part
only, the Company shall execute and the Trustee or the Authenticating
Agent, upon written order of the Company, shall authenticate and the office
or agency where the Debenture is presented shall deliver 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.
22
SECTION 3.5 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.
-------------------------------------
The Company shall have the right, at any time and from time to time during
the term of the Debentures so long as no Event of Default has occurred and is
continuing, 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 or end on a date other than
an Interest Payment Date. To the extent permitted by applicable law, interest,
the payment of which has been deferred because of the extension of the interest
payment period pursuant to this Section 4.1, shall bear interest thereon at the
Floating Interest Rate in effect for each period compounded quarterly for each
quarter of the Extended Interest Payment Period ("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 so long as no Event of Default has
occurred and is continuing, 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 Debentures or end on a date other than an
Interest Payment Date. 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 two Business Days 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 any applicable self-regulatory organization or to holders of the Trust
Preferred Securities issued by the Trust.
23
(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
two Business Days 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 any applicable
self-regulatory organization, if any, or to holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
SECTION 4.3 LIMITATION ON TRANSACTIONS.
---------------------------
If (i) the Company shall exercise its right to defer payment of interest as
provided in Section 4.1; or (ii) there shall have occurred and be continuing any
Event of Default, then
(a) the Company shall not, and will not permit any Subsidiary to,
declare or pay any dividends 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) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase
shares of, common stock of the Company or such Subsidiary, (2) any
declaration of a dividend in connection with the implementation of a
shareholder's 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, (3) purchases of common stock of the Company related to the
issuance of such common stock under any of the Company's employee benefit
plans for its directors, officers or employees, (4) as a result of a
reclassification of any class or series of the Company's capital stock
solely into another class or series of the Company's capital stock, or (5)
declarations or payments of dividends or distributions payable by a
Subsidiary of the Company to the Company or to any of the Company's
Subsidiaries);
(b) the Company shall not, and will not permit any Subsidiary to, 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;
(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 Trust
Preferred Securities Guarantee; and
(d) the Company shall not redeem, purchase or acquire less than all of
the Outstanding Debentures or any of the Trust Preferred Securities.
24
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, or shall cause to be maintained, an office or agency in Wilmington,
Delaware, and at such other location or locations as may be designated as
provided in this Section 5.2, where (i) Debentures may be presented for payment;
(ii) Debentures may be presented as hereinabove authorized for registration of
transfer and exchange; and (iii) notices 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, President or an
Executive 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
outside of Wilmington, Delaware 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 Wilmington, Delaware for the purposes above
mentioned. The Company shall give the Trustee prompt written notice of any such
designation or rescission thereof.
SECTION 5.3 PAYING AGENTS.
--------------
(a) The Trustee shall be the initial Paying Agent. 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 5.3:
(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 notice of any failure by the
Company (or by any other obligor of such Debentures) to make any
payment of the
25
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.
(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 5.3 to the contrary, (i)
the agreement to hold sums in trust as provided in this Section 5.3 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 9.11, 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 sell or convey all or substantially all of
its property to any other company unless the provisions of Article XII hereof
are complied with.
26
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 any of its obligations under the
Trust 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 shall not, and will not permit any Subsidiary to,
declare or pay any dividends 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) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase
shares of, common stock of the Company or such Subsidiary, (2) any
declaration of a dividend in connection with the implementation of a
shareholder's 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, (3) purchases of common stock of the Company related to the
issuance of such common stock under any of the Company's employee benefit
plans for its directors, officers or employees, (4) as a result of a
reclassification of any class or series of the Company's capital stock
solely into another class or series of the Company's capital stock, or (5)
declarations or payments of dividends or distributions payable by a
Subsidiary of the Company to the Company or to any of the Company's
Subsidiaries);
(b) the Company shall not, and will not permit any Subsidiary to, 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;
(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 in interest
to the Debentures; provided, however, that the Company may make payments
pursuant to its obligations under the Trust Preferred Securities Guarantee;
and
(d) the Company shall not redeem, purchase or acquire less than all of
the Outstanding Debentures or any of the Trust Preferred Securities.
SECTION 5.7 COVENANTS AS TO THE TRUST.
--------------------------
For so long as the 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 approval of the Federal Reserve if then so required
under applicable capital guidelines, policies or regulations of the Federal
Reserve; and (iii) use its
27
reasonable efforts to cause the Trust (a) to remain a business trust (and to
avoid involuntary dissolution, termination, winding up or liquidation), 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. In connection with
the distribution of the Debentures to the holders of the Trust Preferred
Securities issued by the Trust upon a Dissolution Event, the Company shall use
its reasonable efforts to list such Debentures on any applicable stock exchange
or self-regulatory organization as the Trust Preferred Securities are then
listed, if any.
SECTION 5.8 COVENANTS AS TO PURCHASES.
--------------------------
Except upon the exercise by the Company of its right to redeem the
Debentures pursuant to Section 3.1 upon the occurrence and continuation of a
Special Event, the Company shall not purchase any Debentures, in whole or in
part, held by the Property Trustee on behalf of the Trust prior to June 30,
2007.
SECTION 5.9 WAIVER OF USURY, STAY OR EXTENSION LAWS.
----------------------------------------
The Company shall not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performances of this Indenture, and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
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) on a
quarterly basis on each regular record date (as described in Section 2.5) 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 (in the event the
Company fails to provide such list on a quarterly basis, the Trustee shall be
entitled to rely on the most recent list provided 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.
28
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 Debenture Registrar (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 with other Debentureholders with
respect to their rights under this Indenture or under the Debentures, subject to
Section 312(b) of the Trust Indenture Act if applicable.
SECTION 6.3 REPORTS BY THE COMPANY.
-----------------------
(a) The Company covenants and agrees to transmit to the Trustee 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, including Section 314(a)(4) of the Trust Indenture Act, if
applicable.
(b) The Company covenants and agrees to transmit to the Trustee in the
same form as filed with the Federal Reserve (i) its annual audited
consolidated financial statements within 90 days following the end of its
fiscal year, (ii) its quarterly consolidated financial statements within 45
days after the end of the first three fiscal quarters of each fiscal year
(each a "Quarter"), and (iii) the following financial data for each
Quarter, within 45 days after the end of each Quarter, and for each fiscal
year, within 90 days after the end of each fiscal year:
CAPITAL: ratio of "Tier 1 Capital" to risk weighted assets;
ASSET QUALITY: ratio of nonperforming assets to loans and other
real estate owned, ratio of reserves to nonperforming loans, and ratio
of net charge-offs to loans;
EARNINGS: return on assets, net interest margin, and efficiency
ratio; and
LIQUIDITY: ratio of loans to assets, ratio of loans to deposits,
total assets, and net income.
SECTION 6.4 REPORTS BY THE TRUSTEE.
-----------------------
(a) On or before July 15 in each year in which any of the Debentures
are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the
29
Debentureholders, as their names and addresses appear upon the Debenture
Register, a brief report dated as of the preceding May 15, if and to the
extent required under Section 313(a) of the Trust Indenture Act, if
applicable (it being understood that no such report shall be required if
none of the events set forth in Section 313(a) of the Trust Indenture Act
has occurred during the period to which such report would relate).
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act, if applicable.
(c) A copy of each such report shall, at the time of such transmission
to Debentureholders, be filed by the Trustee with the Company, with each
stock exchange or applicable self-regulatory organization upon which any
Debentures are listed (if so listed) and also with the Commission. The
Company agrees to notify the Trustee when any Debentures become listed on
any stock exchange or other applicable self-regulatory organization.
(d) If at any time following the date hereof the Property Trustee no
longer holds the Debentures, the Trustee covenants and agrees to transmit
by mail, first class postage prepaid, to the Debentureholders, as their
names and addresses appear upon the Debenture Register, any information,
documents and reports required to be transmitted to the Trustee pursuant to
Section 6.3 as soon as practicable after the receipt of such information
from the Company.
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 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 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,
30
shall have been given to the Company by the Trustee, by
registered or certified mail, or to the Company and the Trustee
by the holders of at least 25% in principal amount of the
Debentures at the time Outstanding;
(iv) the Company pursuant to or within the meaning of any Bankruptcy
Law (1) commences a voluntary case; (2) consents to the entry of
an order for relief against it in an involuntary case; (3)
consents to the appointment of a Custodian of it or for all or
substantially all of its property; or (4) makes a general
assignment for the benefit of its creditors;
(v) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (1) is for relief against the Company in an
involuntary case; (2) appoints a Custodian of the Company for all
or substantially all of its property; or (3) orders the
liquidation of the Company, and the order or decree remains
unstayed and in effect for 90 days; or
(vi) the Trust shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence
except in connection with (1) the distribution of Debentures to
holders of Trust Securities in liquidation of their interests in
the Trust; (2) the redemption of all of the outstanding Trust
Securities of the Trust; or (3) certain mergers, consolidations
or amalgamations, each as permitted by the Trust Agreement.
(b) In each and every such case referred to in items (i) through (vi)
of Section 7.1(a), 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 money due shall have been obtained or entered as hereinafter
provided, the holders of a majority in aggregate principal amount of the
Debentures then 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 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, to the extent
that such payment is enforceable under applicable law, 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 9.7; 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
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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) in case it shall default in the
payment of any installment of interest on any of the Debentures, and such
default shall have continued for a period of 90 Business Days; or (ii) in
case it shall default in the payment of the principal of any of the
Debentures when the same shall 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 shall have 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 (to the extent that payment of such interest is
enforceable under applicable law; 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
under Section 9.7.
(b) If the Company shall fail to pay such amounts set forth in section
7.2(a) 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 any
money 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 become due and
32
payable by the Company after such date, and to collect and receive any
money 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 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 the 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
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, 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. If an Event of Default hereunder occurs and is
continuing, 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 in good xxxxx xxxx 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 MONEY COLLECTED.
-------------------------------
Any money or other assets collected by the Trustee pursuant to this Article
VII 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
money or other assets 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 reasonable 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; and
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.
33
SECTION 7.4 LIMITATION ON SUITS.
--------------------
(a) Except as set forth in this Indenture, no holder of any Debenture
shall have any right by virtue or by availing 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 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 security or 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 security or indemnity, shall have failed to institute any such action,
suit or proceeding, and 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 the Debentures shall
have any right in any manner whatsoever by virtue or by availing 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 equal, ratable and common benefit of all holders of Debentures. For the
protection and enforcement of the provisions of this Section 7.4, 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 expressly provided herein, all powers and
remedies given by this Article VII 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.
34
(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 VII 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.
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 Article X, 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(b), 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 aggregate
principal amount of the Debentures at the time Outstanding affected thereby,
determined in accordance with Article X, 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 5.7; 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 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,
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
35
litigant; but the provisions of this Section 7.7 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, 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 or to any suit instituted against the
Trustee unless it shall have been finally adjudicated in such suit that the
Trustee was negligent, committed an act of willful misconduct, or acted in bad
faith.
SECTION 7.8 DIRECT ACTION; RIGHT OF SET-OFF.
--------------------------------
In the event that an Event of Default has occurred and is continuing and
such event is attributable to the failure of the Company to pay interest on or
principal of the Debentures on an Interest Payment Date or Maturity Date, as
applicable, then a holder of Trust Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Trust Preferred
Securities of such holder (a "Direct Action"). In connection with such Direct
Action, the Company will have a right of set-off under this Indenture to the
extent of any payment made by the Company to such holder of the Trust Preferred
Securities with respect to such Direct Action.
ARTICLE VIII
FORM OF DEBENTURE AND ORIGINAL ISSUE
SECTION 8.1 FORM OF DEBENTURE.
------------------
The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A to
this Indenture, attached hereto and incorporated herein by reference.
SECTION 8.2 ORIGINAL ISSUE OF DEBENTURES.
-----------------------------
Debentures in the aggregate principal amount of Twelve Million Eight
Hundred Eighty Seven Thousand Dollars ($12,887,000) may, upon execution of this
Indenture, be executed by the Company and delivered to the Trustee for
authentication. The Trustee shall thereupon authenticate and deliver said
Debentures to or upon the written order of the Company, signed by its Chief
Executive Officer, 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 OF THE TRUSTEE.
---------------------------------------------------
(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
36
respect to the Debentures such duties and only such duties as are
specifically set forth in this Indenture. 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 Person would
exercise or use under the circumstances in the conduct of its own affairs.
No implied covenants shall be read into this Indenture against the Trustee.
(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:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the 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
(B) 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;
(ii) 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;
(iii)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
37
(iv) 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 five (5) Business 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 a default in the payment of the
principal or interest (including any Additional Interest) 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 9.2, 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 expressly set forth in Section 9.1(b):
(a) The Trustee may 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 its 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 written notification of
such Event of Default from the Company or by holders of at least 25% of the
aggregate principal amount of the Debentures at the time Outstanding;
(d) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and
38
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 of which a Responsible Officer of the
Trustee has actual knowledge (that is continuing and 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 its 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, unless requested in writing
so to do by the holders of not less than a majority in principal amount of
the Outstanding Debentures, determined as provided in Article X; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding. The reasonable
expense of every such examination shall be paid by the Company or, if paid
by the Trustee, shall be repaid by the Company upon demand; and
(h) The Trustee may execute any of the 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 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
39
or application of any money paid over by the Trustee in accordance with any
provision of this Indenture, or for the use or application of any money
received by any Paying Agent other than the Trustee.
SECTION 9.5 MAY HOLD DEBENTURES.
--------------------
The Trustee or any Paying Agent or Debenture Registrar, in its individual
or any other capacity, may become the owner or pledgee of Debentures 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 money 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 be under no
liability for interest on any money received by it hereunder except such as it
may agree with the Company to pay thereon.
SECTION 9.7 COMPENSATION AND REIMBURSEMENT.
-------------------------------
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust), as the Company and the Trustee may from time
to time agree in writing, for all services rendered by it in the execution
of the trusts hereby created and in the exercise and performance of any of
the powers and duties hereunder of the Trustee, and, except as otherwise
expressly provided herein, the Company shall pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its
employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Company also covenants to indemnify the
Trustee (and its officers, agents, directors and employees) for, and to
hold it harmless against, any loss, liability, claim, action, suit, cost or
expense incurred without negligence or bad faith on the part of the Trustee
and arising out of or in connection with the acceptance or administration
of this Indenture, including the reasonable costs and expenses of defending
itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section 9.7 to
compensate and indemnify the Trustee and to pay or reimburse the Trustee
for expenses, disbursements and advances shall constitute additional
indebtedness hereunder. Such additional indebtedness shall be secured by a
lien prior to that of the Debentures upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the
benefit of the holders of particular Debentures.
40
SECTION 9.8 RELIANCE ON OFFICERS' CERTIFICATE.
----------------------------------
Except as expressly set forth in Section 9.1(b), 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, if the Trust Indenture Act is then applicable to this
Indenture.
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 or national banking
association organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a
corporation or other Person 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 Person 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 9.10, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. 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
9.10, 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 this Indenture and
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
41
have accepted appointment within 30 days after the mailing of such notice
of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
this Indenture and 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 Sections 9.9 and 9.10, 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 and prescribe, appoint a successor
trustee.
(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; or
(iii)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
(iv) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or commence a voluntary
bankruptcy proceeding, or a receiver of the Trustee; or
(v) 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 this
Indenture and 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 9.10, 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 and prescribe, 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.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to this Indenture and Debentures pursuant to
any of the provisions of this Section 9.11 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
9.12.
42
(e) Any successor trustee appointed pursuant to this Section 9.11 may
be appointed with respect to this Indenture and Debentures, and at any time
there shall be only one Trustee with respect to this Indenture and
Debentures.
SECTION 9.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
---------------------------------------
(a) In the 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 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 full and certain vesting in and confirming
to such successor trustee all such rights, powers and trusts referred to in
paragraph (a) of this Section 9.12.
(c) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and
eligible under this Article IX.
(d) Upon acceptance of appointment by a successor trustee as provided
in this Section 9.12, 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 Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided that such Person 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.
43
SECTION 9.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
------------------------------------------------------
The Trustee shall comply with Section 311(a) of the Trust Indenture Act, if
applicable, 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 applicable
and 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.
(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 deemed 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(b), proof of the execution of any
instrument by a Debentureholder (such proof shall not require notarization) or
his 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
or the Company.
44
(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 or the Company may require such additional proof of
any matter referred to in this Section 10.2 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 nor the Trustee nor any Paying Agent
nor any Authenticating Agent nor 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 (i) for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures that the Trustee actually knows
are so owned shall be so disregarded; and (ii) for the purposes of this Section
10.4, the Trust shall be deemed to not be controlled by the Company. The
Debentures so owned that have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section 10.4, 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 full protection to the Trustee.
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
45
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, if applicable),
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 them 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;
(e) to make any change that does not adversely affect the rights of
any Debentureholder in any material respect;
(f) 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 qualify or maintain the qualification
of this Indenture under the Trust Indenture Act, if applicable; or
(g) to evidence a consolidation or merger involving the Company as
permitted under Section 12.1.
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
46
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 11.1 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, if applicable) 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, 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; 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 11.2 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 XI, 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 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 XI, may bear a notation in form approved by the
Company, provided such form meets the requirements of any national securities
exchange or automated quotation service upon which the Debentures may be listed
or quoted, as to any matter provided for in such supplemental indenture. If the
Company
47
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 (upon written order of the Company) 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 its 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 Sections
9.1(b), may receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article XI is authorized
or permitted by, and conforms to, the terms of this Article XI and that it
is proper for the Trustee under the provisions of this Article XI 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 11.5, 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 Person
(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 Person (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 the Company as the case
may be, shall be expressly assumed, by supplemental
48
indenture (which shall conform to the provisions of the Trust Indenture Act, to
the extent the Trust Indenture Act is then applicable to this Indenture or such
supplemental indenture) satisfactory in form to the Trustee in its good faith
and 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 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 PERSON SUBSTITUTED.
-----------------------------
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee in good faith, 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 Person 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 Person 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(b), may receive 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 XII.
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 2.9) and the
49
principal and accrued interest of all 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
Company shall deposit or cause to be deposited with the Trustee as trust funds
the entire amount in money or Governmental Obligations sufficient 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, 2.7, 2.9, 5.1, 5.2, 5.3, 9.7 and 9.10, that shall survive until the date of
maturity or redemption date, as the case may be, and Section 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 money or an amount of Governmental Obligations sufficient
in the opinion of a nationally recognized certified public accounting firm 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, 2.7, 2.9, 5.1, 5.2, 5.3, 9.6, 9.7, 9.10 and
13.5 that shall survive until such Debentures shall mature and be paid.
Thereafter, Sections 9.7 and 13.5 shall survive.
SECTION 13.3 DEPOSITED MONEY TO BE HELD IN TRUST.
------------------------------------
All money 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.
SECTION 13.4 PAYMENT OF MONEY 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
50
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
money or Governmental Obligations.
SECTION 13.5 REPAYMENT TO COMPANY.
---------------------
Any money 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 May 31 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, STOCKHOLDERS, 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, stockholder, officer or
director, past, present or future, as such, of the Company or of any predecessor
or successor Person, either directly or through the Company or any such
predecessor or successor Person, 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 (or other entity, as the case may be)
obligations, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, stockholders, officers or directors
as such, of the Company or of any predecessor or successor Person, 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, and any and all such rights and claims
against, every such incorporator, stockholder, 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.
51
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 its respective successors
and assigns, whether so expressed or not.
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 Person that shall at the time
be the lawful 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
Person.
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
letterbox addressed to the Company's Chief Executive Officer. 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 internal laws of the State of Maryland and for all purposes shall be
construed in accordance with the laws of said State, without regard to its
choice of law provisions. Any action or proceeding arising out of this
Indenture, as supplemented or amended, in any way shall be brought and enforced
exclusively in the applicable United States District Court in the State of
Maryland or in the event such court lacks jurisdiction, in the applicable
Maryland State Court.
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.
52
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 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; provided, however, that each such certificate shall comply
with the provisions of Section 314 of the Trust Indenture Act, if
applicable.
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 2.5(c)) 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 APPLICATION OF TRUST INDENTURE ACT; CONFLICT.
---------------------------------------------
(a) Unless and until this Indenture is required to be qualified under
the Trust Indenture Act, (i) the provisions of this Indenture that
expressly relate to the Trust Indenture Act do not apply and shall not be
given effect; and (ii) notwithstanding any other provision of this
Indenture (including without limitation Sections 7.7, 9.1(b), 9.7(a) and
9.8 hereof), no Trustee shall be liable for its own simple negligence, but
shall only be liable for its own gross negligence.
(b) If the Indenture is required to be qualified under the Trust
Indenture Act at any time, then 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.
53
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 thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties hereto.
SECTION 15.3 ACKNOWLEDGMENT OF RIGHTS; RIGHT OF SET OFF.
-------------------------------------------
(a) 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 Trust Preferred Securities
may, to the extent permitted under applicable law, 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, 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 Trust Preferred
Securities may directly institute a proceeding against the Company 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 Trust Preferred Securities of such holder on or after the
respective due date specified in the Debentures.
(b) Notwithstanding anything to the contrary contained in this
Indenture, the Company shall have the right to setoff any payment it is
otherwise required to make hereunder in respect of any Trust Securities to
the extent that the Company has previously made, or is concurrently making,
a payment to the holder of any such Trust Securities under the Trust
Preferred Securities Guarantee or in connection with a proceeding for
enforcement of payment of the principal of or interest on the Debentures
directly brought by holders of any such Trust Securities.
54
ARTICLES XVI
SUBORDINATION OF DEBENTURES
SECTION 16.1 AGREEMENT TO SUBORDINATE.
-------------------------
The Company covenants and agrees, and each holder of Debentures issued
hereunder by such holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
XVI; 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, Subordinated Debt and Additional Senior Obligations
of the Company (collectively, "Senior Indebtedness") to the extent provided
herein, whether outstanding at the date of this Indenture or thereafter
incurred. No provision of this Article XVI shall prevent the occurrence of any
default or Event of Default hereunder. In no event shall the Debentures be
subordinate to the Company's (i) trade accounts payable, or (ii) accrued
liabilities arising in the ordinary course of business; however, the Debentures
shall be subordinate to (i) any Debt of the Company to any of its subsidiaries
and (ii) Debt to any employees of the Company.
SECTION 16.2 DEFAULT ON SENIOR DEBT, SUBORDINATED DEBT OR ADDITIONAL SENIOR
--------------------------------------------------------------
OBLIGATIONS.
------------
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, or in the event that the maturity of any Senior
Indebtedness 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 16.2, 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 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 dissolution or winding-up or liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due
upon all Senior Indebtedness of the Company shall first be paid in full, or
payment thereof provided for in money in accordance with its terms,
55
before any payment is made by the Company on account of the principal or
interest on the Debentures; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the Company, or distribution
of assets of the Company of any kind or character, whether in cash,
property or securities, to which the holders of the Debentures or the
Trustee would be entitled to receive from the Company, except for the
provisions of this Article XVI, 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 and to the extent 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, and 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 XVI, 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
Person provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XVI 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 Person, 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 Person 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 Person upon the terms
and conditions provided for in Article XII shall not be deemed a
dissolution, winding-up, liquidation or
56
reorganization for the purposes of this Section 16.3 if such other Person
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 16.3 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 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 XVI, and no payment pursuant to the provisions
of this Article XVI 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), 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 XVI 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 XVI 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, as the case may be, 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 XVI
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 XVI, the Trustee, subject to the provisions of Section
9.1(b), 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
57
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 XVI.
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 the
Company advises the Trustee in writing is necessary or appropriate to effectuate
the subordination provided in this Article XVI 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 money to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XVI. Notwithstanding
the provisions of this Article XVI or any other provision 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 money to or
by the Trustee in respect of the Debentures pursuant to the provisions of
this Article XVI, 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 therefore; and before
the receipt of any such written notice, the Trustee, subject to the
provisions of Section 9.1(b), shall be entitled in all respects to assume
that no such facts exist; provided, however, that if the Trustee shall not
have received the notice provided for in this Section 16.6 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(b), 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 (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 XVI, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of such Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XVI, 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.
58
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 XVI 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 the Article XVI.
(b) With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVI, 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 owe any fiduciary duty to the holders of
such Senior Indebtedness and, subject to the provisions of Section 9.1(b),
the Trustee shall not be liable to any holder of such Senior Indebtedness
if it shall in good faith 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 XVI 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 XVI or the obligations hereunder of
the 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.
[SIGNATURE PAGE FOLLOWS]
59
IN WITNESS WHEREOF, this Indenture is dated as set forth below and
effective as of the day and year first above written.
BCSB Bankcorp, Inc.
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Date: June 30, 2002
Xxxxx Fargo Bank, National Association,
AS TRUSTEE
By: /s/ Xxx Xxxxxxx
Name: Xxx Xxxxxxx
Title: Vice President
Date: June 30, 2002
60
