Exhibit 4.4
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Form of Amended and Restated Trust Agreement of New South Capital Trust I
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AMENDED AND RESTATED TRUST AGREEMENT
OF
NEW SOUTH CAPITAL TRUST I
__________, 1998
=====================
1
TABLE OF CONTENTS
[Table of Contents Omitted]
ANNEX I Terms of _____% Preferred Securities _____% Common Securities I-1
EXHIBIT A-1 Form of Preferred Security Certificate.............................A1-1
EXHIBIT A-2 Form of Common Security Certificate................................A2-1
2
Page
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NEW SOUTH CAPITAL TRUST I
Certain Sections of this Trust Agreement relating to Sections 310 through
318 of the Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
------- -------
(S) 310 (a)(1) ........ ........ ........ ........ ........ 5.3
(a)(2) ........ ........ ........ ........ ........ 5.3
(a)(3) ........ ........ ........ ........ ........ 5.7
(a)(4) ........ ........ ........ ........ ........ 3.8(g)
(b) ........ ........ ........ ........ ........ 5.3(c), 5.3(d)
(S) 311 (a) ........ ........ ........ ........ ........
(b) ........ ........ ........ ........ ........
(S) 312 (a) ........ ........ ........ ........ ........ 2.2
(b) ........ ........ ........ ........ ........ 2.2
(c) ........ ........ ........ ........ ........ 2.2
(S) 313 (a) ........ ........ ........ ........ ........ 2.3
(b) ........ ........ ........ ........ ........ 2.3
(c) ........ ........ ........ ........ ........ 14.1
(d) ........ ........ ........ ........ ........ 2.3
(S) 314 (a) ........ ........ ........ ........ ........ 2.4
(b) ........ ........ ........ ........ ........ Not Applicable
(c)(1) ........ ........ ........ ........ ........ 2.5
(c)(2) ........ ........ ........ ........ ........ 2.5
(c)(3) ........ ........ ........ ........ ........ Not Applicable
(d) ........ ........ ........ ........ ........ Not Applicable
(e) ........ ........ ........ ........ ........ 1.1, 2.5
(S) 315 (a) ........ ........ ........ ........ ........ 3.8, 3.9
(b) ........ ........ ........ ........ ........ 2.7, 14.1
(c) ........ ........ ........ ........ ........ 3.9(a)
(d) ........ ........ ........ ........ ........ 3.9(b)
(e) ........ ........ ........ ........ ........ Not Applicable
(S) 316 (a) ........ ........ ........ ........ ........ Not Applicable
(a)(1)(A)...... ........ ........ ........ ........ Not Applicable
(a)(1)(B)...... ........ ........ ........ ........ Not Applicable
(a)(2) ........ ........ ........ ........ ........ Not Applicable
(b) ........ ........ ........ ........ ........ Not Applicable
(c) ........ ........ ........ ........ ........ 12.2
(S) 317 (a)(1) ........ ........ ........ ........ ........ Not Applicable
(a)(2) ........ ........ ........ ........ ........ Not Applicable
(b) ........ ........ ........ ........ ........ 7.5
(S) 318 (a) ........ ........ ........ ........ ........ 2.1
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Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Trust Agreement.
3
AMENDED AND RESTATED
TRUST AGREEMENT
OF
NEW SOUTH CAPITAL TRUST I
__________, 1998
AMENDED AND RESTATED TRUST AGREEMENT ("Trust Agreement") dated and
effective as of __________, 1998, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the Holders (as defined herein), from time to
time, of undivided beneficial interests in the Trust to be issued pursuant to
this Trust Agreement;
WHEREAS, the Delaware Trustee and the Sponsor established New South
Capital Trust I (the "Trust"), a trust created under the Delaware Business Trust
Act pursuant to a Trust Agreement dated as of __________, 1998 (the "Original
Agreement"), and a Certificate of Trust filed with the Secretary of State of the
State of Delaware on __________, 1998, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer (each as hereinafter defined);
WHEREAS, prior to the date hereof, no Trust Securities have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Trust Agreement,
amend and restate each and every term and provision of the Original Agreement;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act (as defined
herein) and that this Trust Agreement constitute the governing instrument of
such business trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the benefit of the Holders (as defined herein),
from time to time, of the securities representing undivided beneficial interests
in the assets of the Trust issued hereunder, subject to the provisions of this
Trust Agreement.
4
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION I.1 Definitions.
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Unless the context otherwise requires:
(a) Capitalized terms used in this Trust Agreement but not
defined in the preamble above or elsewhere herein have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Trust Agreement has the same
meaning throughout;
(c) all references to "the Trust Agreement" or "this Trust
Agreement" are to this Trust Agreement (including Appendix I hereto and
Exhibit A hereto) as modified, supplemented or amended from time to time;
(d) all references in this Trust Agreement to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Trust Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Trust Agreement unless otherwise defined in this
Trust Agreement or unless the context otherwise requires;
(f) a term defined in the Indenture (as defined herein) has the
same meaning when used in this Trust Agreement unless otherwise defined in
this Trust Agreement or the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" has the meaning set forth in Section 5.1.
----------------------
"Affiliate" has the same meaning as given to that term in Rule 405
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under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Registrar.
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"Authorized Officer" of a Person means any other Person that is
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authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
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Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday or a
------------
day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S)3801 et seq., as it may be amended from time to time or
any successor legislation.
"Clearing Agency" means an organization registered as a "Clearing
---------------
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name
5
of a nominee of that organization shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
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financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Time" means the "Closing Time" under the Underwriting
------------
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from
----
time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
----------
Commission as from time to time constituted, or if any time after the execution
of this Trust Agreement such Commission is not existing and performing the
duties now assigned to it under applicable Federal securities laws, then the
body performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
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"Common Securities Guarantee" means the guarantee agreement dated
---------------------------
as of __________, 1998 of the Guarantor in respect of the Common Securities.
"Company Indemnified Person" means (a) any Administrative Trustee;
--------------------------
(b) any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee
----------------------
at which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at _________________________.
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holders of Securities.
"Debenture Issuer" means New South Bancshares, Inc., a Delaware
----------------
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means Bankers Trust Company, a [national
-----------------
banking association], as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the _____% Junior Subordinated Deferrable
----------
Interest Debentures due __________ of the Debenture Issuer issued pursuant to
the Indenture.
"Default" means an event, act or condition that with notice or
-------
lapse of time, or both, would constitute an Event of Default.
"Definitive Preferred Securities" shall have the meaning set forth
-------------------------------
in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Direct Action" shall have the meaning set forth in Section 3.8(e).
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6
"Distribution" means a distribution payable to Holders of Securities
------------
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
---
"Event of Default" in respect of the Securities means an Event of
----------------
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
----------------------------
10.4(b).
"Global Preferred Securities" has the meaning set forth in Section
---------------------------
7.3(a).
"Guarantor" means New South Bancshares, Inc., a Delaware corporation,
---------
or any successor entity resulting from any consolidation, amalgamation, merger
or other business combination in its capacity as guarantor under each of the
Securities Guarantees, as the case may be.
"Holder" means a Person in whose name a Security is registered, such
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Person being a beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
------------------
Indemnified Person.
"Indenture" means the Indenture dated as of __________, 1998, among
---------
the Debenture Issuer and the Debenture Trustee, as amended from time to time.
"Initial Optional Redemption Date" has the meaning set forth in
--------------------------------
Section 4(b) of Annex I hereto.
"Investment Company" means an investment company as defined in the
------------------
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
----------------------
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Liquidation Amount" with respect to any Security means the amount
------------------
designated as such with respect thereto in Annex I hereto.
"Majority in Liquidation Amount" means, with respect to the Trust
------------------------------
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in Annex I hereto.
------------------
7
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two of the following: the Chief Executive Officer, the
President, a Vice President, the Controller or the Secretary or an Assistant
Secretary, the Treasurer or an Assistant Treasurer of such Person. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
------------------
be an employee of the Sponsor, and who shall be acceptable to the Property
Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
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"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning specified in Section 7.1(a).
--------------------
"Preferred Securities Guarantee" means the guarantee agreement dated
------------------------------
as of __________, 1998 of the Guarantor in respect of the Preferred Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book
-----------------------------------
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Property Trustee" has the meaning set forth in Section 5.3(a).
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"Property Trustee Account" has the meaning set forth in Section
------------------------
3.8(c).
"Quorum" means a majority of the Administrative Trustees or, if there
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are only two Administrative Trustees, both of them.
"Redemption Price" has the meaning set forth in Section 4(a) of Annex
----------------
I hereto.
"Registrar" has the meaning set forth in Section 7.4.
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"Registration Statement" has the meaning set forth in Section 3.6(b).
----------------------
"Related Party" means, with respect to the Sponsor, any direct or
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indirect wholly owned
8
subsidiary of the Sponsor or any other Person that owns, directly or indirectly,
100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, any
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officer within the Corporate Trust Office of the Property Trustee with
responsibility for the administration of this Trust Agreement and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
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successor rule or regulation.
"Securities" or "Trust Securities" means the Common Securities and the
---------- ----------------
Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from
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time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
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Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Section 4(c) of Annex I
-------------
hereto.
"Sponsor" means New South Bancshares, Inc., [a Delaware corporation],
-------
or any successor entity resulting from any merger, consolidation, amalgamation
or other business combination, in its capacity as sponsor of the Trust.
"Successor Entity" has the meaning specified in Section 3.15(b).
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"Successor Delaware Trustee" has the meaning specified in Section
--------------------------
5.7(b)(ii).
"Successor Property Trustee" has the meaning specified in Section
--------------------------
5.7(b)(i).
"Successor Securities" has the meaning specified in Section 3.15(b).
--------------------
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
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"10% in Liquidation Amount" means, with respect to the Trust
-------------------------
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
--------------------
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Trust
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Agreement as a trustee (including the Property Trustee, the Delaware Trustee and
the Administrative Trustees), so long as such Person shall continue as a trustee
of the Trust in accordance with the terms hereof, and all other Persons who may
from time to time be duly appointed, qualified and serving as Trustees in
accordance with the provisions hereof, and
9
references herein to a Trustee or the Trustees shall refer to such Person or
Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"Underwriting Agreement" means the Underwriting Agreement for the
----------------------
initial offering and sale of Preferred Securities in the form of Exhibit C.
10
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Trust Agreement is subject to the provisions of the
Trust Indenture Act and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Trust
Agreement limits, qualifies or conflicts with the duties imposed by (S)(S) 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities, (i) within 5 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders of the Securities
("List of Holders") as of such record date, provided that neither the Sponsor
nor the Administrative Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Administrative Trustees on behalf of the Trust, and (ii) at any
other time, within 30 days of receipt by the Trust of a written request for a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Property Trustee. The Property Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in Lists
of Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
-------------------------------
(a) The Property Trustee shall transmit to the Holders of the
Preferred Securities such reports concerning the Property Trustee and its
actions under this Trust Agreement as may be required pursuant to the Trust
Indenture Act of 1939 at the times and in the manner provided pursuant thereto.
If required by Section 313(a) of the Trust Indenture Act of 1939, the Property
Trustee shall, within sixty days after each ________ following the date of this
Trust Agreement, commencing _____, 1998, deliver to the Holders of the Preferred
Securities a brief report, dated as of such ________, which complies with the
provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such
transmission to the Holders of the Preferred Securities, be filed by the
Property Trustee with each stock exchange, if any, upon which the Preferred
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Property Trustee when the Preferred Securities are
listed on any stock exchange.
SECTION 2.4 Periodic Reports to Property Trustee.
------------------------------------
11
Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide to the Property Trustee such documents, reports and
information as are required by (S) 314 (if any) and the compliance certificate
required by (S) 314 of the Trust Indenture Act in the form, in the manner and at
the times required by (S) 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
------------------------------------------------
Each of the Sponsor and an Administrative Trustee on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent provided for in this Trust Agreement that relate to any
of the matters set forth in (S) 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to (S)
314(c)(1) of the Trust Indenture Act may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority
in aggregate principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under the
Trust Agreement may only be waived by the vote of the Holders of at least
the proportion in aggregate Liquidation Amount of the Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of (S)
316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Trust Agreement and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
Default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Trust Agreement, but no such waiver shall extend to any
subsequent or other Default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Trust Agreement without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
-------- ----
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event of
Default under the Trust Agreement as provided below in this Section 2.6(b),
the Event of Default under the Trust Agreement shall also not be waivable;
or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Trust Agreement as provided
below in this Section 2.6(b), the Event of Default under the Trust
Agreement may
12
only be waived by the vote of the Holders of at least the proportion in
aggregate Liquidation Amount of the Common Securities that the relevant
Super Majority represents of the aggregate principal amount of the
Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
-------- -------
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences if all Events of Default with respect to
the Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of the Preferred Securities and only the Holders of the Preferred Securities
will have the right to direct the Property Trustee in accordance with the terms
of the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
(S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Trust Agreement and the Securities, as permitted by
the Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such Default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Trust Agreement, but no such waiver
shall extend to any subsequent or other Default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee, at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this Trust
Agreement. The foregoing provisions of this Section 2.6(c) shall be in lieu of
(S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Trust Agreement and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after a
Responsible Officer of the Property Trustee obtains knowledge of the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all Defaults with respect to the
Securities actually known to a Responsible Officer of the Property Trustee,
unless such Defaults have been cured before the giving of such notice; provided
that, except for a Default in the payment of principal of (or premium, if any)
or interest on any of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Property
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any Default or Event of Default except:
(i) Default or Event of Default under Sections 5.01(a) and
5.01(b) of the Indenture; or
(ii) any Default or Event of Default as to which the
Property Trustee shall have received written notice or of which a
Responsible Officer of the Property Trustee charged with the administration
of the Trust Agreement shall have actual knowledge.
(c) Within five Business Days after the occurrence of any Event
of Default actually known to the Property Trustee, the Property Trustee shall
transmit notice of such Event of Default to the Holders of the Preferred
Securities, the Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a certification as to
whether or not they are in compliance with all the conditions and covenants
applicable to them under this Trust Agreement.
13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
----
The Trust is named "New South Capital Trust I" as such name may
be modified from time to time by the Administrative Trustees following written
notice to the Property Trustee, the Delaware Trustee and the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Administrative Trustees.
SECTION 3.2 Office.
------
The address of the principal office of the Trust is c/o New South
Bancshares, Inc., 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000. On ten
Business Days written notice to the Property Trustee, the Delaware Trustee and
the Holders of Securities, the Administrative Trustees may designate another
principal office.
SECTION 3.3 Purpose.
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The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities, (b) to use the gross proceeds from the sale of the
Securities to acquire the Debentures, and (c) except as otherwise limited
herein, to engage in only those other activities necessary, advisable or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, mortgage or pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.
SECTION 3.4 Authority.
---------
Subject to the limitations provided in this Trust Agreement and
to the specific duties of the Property Trustee, the Administrative Trustees
shall have exclusive and complete authority to carry out the purposes of the
Trust. An action taken by the Administrative Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Property Trustee on behalf of the Trust in accordance with its
powers shall constitute the act of and serve to bind the Trust. In dealing with
the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Trust Agreement.
SECTION 3.5 Title to Property of the Trust.
------------------------------
Except as provided in Section 3.8 with respect to the Debentures
and the Property Trustee Account or as otherwise provided in this Trust
Agreement, legal title to all assets of the Trust shall be vested in the Trust.
The Holders shall not have legal title to any part of the assets of the Trust,
but shall have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Administrative Trustees.
------------------------------------------------
The Administrative Trustees shall have the exclusive power, duty
and authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Trust Agreement; provided, however, that
except, in the case of (i) and (ii), as contemplated in Section 7.1(a),
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(i) the Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities, (ii) there shall be no interests in
the Trust other than the Securities, and (iii) the issuance of Securities shall
be limited to a simultaneous issuance of both Preferred Securities and Common
Securities at any Closing Time;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute, if necessary, a registration statement (the
"Registration Statement") in preliminary and final form, including any
amendments or supplements thereto, prepared by the Sponsor, in relation to
the offering and sale of Preferred Securities under the Securities Act;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to
qualify or register all or part of the Preferred Securities in any State in
which the Sponsor has determined to qualify or register such Preferred
Securities for sale;
(iii) at the direction of the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York Stock Exchange or any
other national stock exchange or the Nasdaq Stock Market's National Market
for listing or quotation of the Preferred Securities;
(iv) execute and deliver letters, documents, or instruments with
DTC and other Clearing Agencies relating to the Preferred Securities;
(v) if required, execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Underwriting Agreement providing
for the sale of the Preferred Securities.
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of (S) 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
15
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by (S)314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar for the
Securities or to appoint a Paying Agent for the Securities as provided in
Section 7.4 except for such time as such power to appoint a Paying Agent is
vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and to
Holders of the Securities of any notice received from the Debenture Issuer of
its election to defer payments of interest on the Debentures by extending the
interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Trust Agreement or
with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
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Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Sponsor.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
The Trust shall not, and the Trustees (including the Property Trustee)
shall not cause the Trust to, engage in any activity other than as required or
authorized by this Trust Agreement. The Trust shall not:
(a) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Trust Agreement and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(e) possess any power or otherwise act in such a way as to vary
the Trust assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(g) other than as provided in this Trust Agreement or Annex I,
(A) direct the time, method and place of conducting any proceeding with
respect to any remedy available to the Debenture Trustee, or exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless the Trust shall
have received an opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that such amendment, modification
or termination will not cause more than an insubstantial risk that, for
United States federal income tax purposes, the Trust will not be classified
as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.7. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
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(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make, or cause any Paying Agent to make,
payments to the Holders of the Preferred Securities and Holders of the
Common Securities from the Property Trustee Account in accordance with
Section 6.1. Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Trust Agreement. The
Property Trustee Account shall be an account that is maintained with a
banking institution the rating on whose long-term unsecured indebtedness is
at least equal to the rating assigned to the Preferred Securities by a
"nationally recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or appropriate
to effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain events.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of this Trust Agreement and the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee's duties and obligations under this Trust Agreement or the
Trust Indenture Act and if the Property Trustee shall have failed to take such
Legal Action, the Holders of the Preferred Securities may take such Legal
Action, to the same extent as if such Holders of Preferred Securities held an
aggregate principal amount of Debentures equal to the aggregate Liquidation
Amount of such Preferred Securities, without first proceeding against the
Property Trustee or the Trust; provided, however, that if an Event of Default
-------- -------
has occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay the principal of or premium, if any, or interest on
the Debentures on the date such principal, premium, if any, or interest is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or premium, if any, or
interest on the Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Preferred Securities of such Holder (a "Direct
Action") on or after the respective due date specified in the Debentures. In
connection with such Direct Action, the rights of the Holders of the Common
Securities will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Debenture Issuer to such
Holder of Preferred Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that
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appointment in accordance with Section 5.7(b).
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Property Trustee occurs and is continuing, the Property Trustee shall, for
the benefit of Holders of the Securities, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to this Trust Agreement
and the terms of the Securities. The Property Trustee must exercise the powers
set forth in this Section 3.8 in a manner that is consistent with the purposes
and functions of the Trust set out in Section 3.3, and the Property Trustee
shall not take any action that is inconsistent with the purposes and functions
of the Trust set out in Section 3.3.
(h) The Property Trustee shall be authorized to undertake any actions
set forth in (S)317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents and to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all securities and any such Paying Agent
shall comply with (S)317(b) of the Trust Indenture Act. Any such additional
Paying Agent may be removed by the Property Trustee at any time the Property
Trustee remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee.
(j) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.
-----------------------------------------------------------
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Trust Agreement and in the Securities and no implied covenants
shall be read into this Trust Agreement against the Property Trustee. In case
an Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Property Trustee has actual
knowledge, the Property Trustee shall exercise such of the rights and powers
vested in it by this Trust Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of 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 Property Trustee shall
be determined solely by the express provisions of this Trust Agreement
and in the Securities and the Property Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Trust Agreement and in the Securities,
and no implied covenants or obligations shall be read into this Trust
Agreement against the Property Trustee; and
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(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Trust Agreement;
provided, however, that in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not they conform to
the requirements of this Trust Agreement;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Trust Agreement or
indemnity reasonably satisfactory to the Property Trustee against such risk
or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded
to the Property Trustee under this Trust Agreement and the Trust Indenture
Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing
with the Sponsor. Money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the Property
Trustee Account maintained by the Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the Sponsor
with their respective duties under this Trust Agreement, nor shall the
Property Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
----------------------------------
(a) Subject to the provisions of Section 3.9:
20
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Trust Agreement may be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever in the administration of this Trust Agreement,
the Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or reregistration thereof;
(v) the Property Trustee may consult with counsel or other
experts of its selection and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion, such
counsel may be counsel to the Sponsor or any of its Affiliates, and may
include any of its employees. The Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement
at the request or direction of any Holder, unless such Holder shall have
provided to the Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs, expenses
(including reasonable attorneys' fees and expenses and the expenses of the
Property Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Property
Trustee; provided, that, nothing contained in this Section 3.10(a)(vi)
shall be taken to relieve the Property Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Trust Agreement;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be
required to inquire as to
21
the authority of the Property Trustee to so act or as to its compliance
with any of the terms and provisions of this Trust Agreement, both of which
shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Securities as
would be entitled to direct the Property Trustee under the terms of the
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of this Trust
Agreement; and
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Trust Agreement.
(b) No provision of this Trust Agreement shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
----------------
Notwithstanding any other provision of this Trust Agreement other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Administrative Trustees or the Property Trustee
described in this Trust Agreement. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of (S)3807 of the Business Trust Act and taking such
actions as are required to be taken by the Delaware Trustee under the Business
Trust Act. In the event the Delaware Trustee shall at any time be required to
take any action or perform any duty hereunder, the Delaware Trustee shall be
entitled to the benefits of Section 3.9(b)(ii) through (vii) and Section 3.10.
No implied covenants or obligations shall be read into this Trust Agreement
against the Delaware Trustee.
SECTION 3.12 Execution of Documents.
----------------------
Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Business Trust Act, any Administrative
Trustee is authorized to execute on behalf of the Trust any documents that the
Administrative Trustees have the power and authority to execute pursuant to
Section 3.6; provided that, the registration statement referred to in Section
3.6(b)(i), including any amendments thereto, shall be signed by all of the
Administrative Trustees.
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SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained in this Trust Agreement and the
Securities shall be taken as the statements of the Sponsor, and the Trustees do
not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any
part thereof. The Trustees make no representations as to the validity or
sufficiency of this Trust Agreement or the Securities.
SECTION 3.14 Duration of Trust.
-----------------
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence up to January 31, 2038.
SECTION 3.15 Mergers.
-------
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, except as
described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees and without the consent of the Holders
of the Securities, the Delaware Trustee or the Property Trustee, merge or
convert with or into, consolidate, amalgamate, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or substantially as
an entirety to, a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property Trustee as
the holder of the Debentures;
(iii) the Successor Securities are listed or quoted, or any
Successor Securities will be listed or quoted upon notification of
issuance, on any national securities exchange or with another organization
on which the Preferred Securities are then listed or quoted, if any;
(iv) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect (other than
with respect to any dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
23
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Sponsor has
received an opinion of an independent counsel to the Trust experienced in
such matters to the effect that:
(A) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect
the rights, preferences and privileges of the Holders of the
Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the
Trust nor the Successor Entity will be required to register as an
Investment Company under the Investment Company Act; and
(C) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer, or lease, the Trust
(or the Successor Entity) will continue to be classified as a grantor
trust for United States federal income tax purposes; and
(viii) the Sponsor or any permitted successor or assignee owns
all of the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Preferred Securities Guarantee and the
Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of all Holders of the Securities in liquidation amount of the
Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any other Person or permit any
other Person to consolidate, amalgamate, merge or convert with or into, or
replace it if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the Successor Entity not
to be classified as a grantor trust for United States federal income tax
purposes.
(d) The Administrative Trustees shall furnish to the Delaware Trustee
at least five Business Days prior notice of the consummation of any merger,
consolidation, amalgamation, or replacement; provided, however, that failure to
provide such notice shall not effect the validity of any such transaction.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
---------------------------------------
At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are issued
and sold.
SECTION 4.2 Responsibilities of the Sponsor.
-------------------------------
In connection with the issue and sale of the Preferred Securities,
the Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Registration Statement, including any
amendments or supplements thereto;
24
(b) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities and to
do any and all such acts, other than actions which must be taken by the Trust,
and advise the Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) if deemed necessary or advisable by the Sponsor, to prepare
for filing by the Trust an application to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market for listing or
quotation of the Preferred Securities;
(d) if required, to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the registration of
the Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement
providing for the sale of the Preferred Securities.
SECTION 4.3 Right to Proceed.
----------------
The Sponsor acknowledges the rights of the Holders of Preferred
Securities, in the event that a failure of the Trust to pay Distributions on the
Preferred Securities is attributable to the failure of the Company to pay
interest or principal on the Debentures, to institute Direct Actions against the
Debenture Issuer for enforcement of its payment obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.
---------------------------------------------
The number of Trustees initially shall be six (6), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; provided, however, that, the number of
-------- -------
Trustees shall in no event be less than two (2); provided further, that (1) one
-------- -------
Trustee shall be the Delaware Trustee; (2) there shall be at least one Trustee
who is an employee or officer of, or is affiliated with the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Trust Agreement is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the time be
located, the Holders of a Majority in Liquidation Amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more Persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of the Trust's property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Trust Agreement. In case an Event of Default
has occurred and is continuing, the Property Trustee alone shall have power to
make any such appointment of a co-trustee.
25
SECTION 5.2 Delaware Trustee.
----------------
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Property Trustee has its principal
-------- ----
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee shall also be the Delaware Trustee
and Section 3.11 shall have no application to the Property Trustee in its
capacity as Property Trustee.
SECTION 5.3 Property Trustee; Eligibility.
-----------------------------
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee and which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) 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 Person permitted by the Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or District of Columbia
authority. If such corporation or national banking association publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation or national banking association shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of (S)310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in (S)310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of (S) 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Trust Agreement for purposes of clause (i) of the
first provision contained in (S)310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
Bankers Trust Company
_________________________
_________________________
Attention: ______________
26
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
--------------------------------------------------------------
Trustee Generally.
-----------------
Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Administrative Trustees.
-----------------------
(a) The initial Administrative Trustees shall be:
Xxxxxxxx X. Xxxxxxx
c/o New South Bancshares, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxxx X. Xxxxx
c/o New South Bancshares, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
(b) Except as expressly set forth in this Trust Agreement and
except if a meeting of the Administrative Trustees is called with respect to any
matter over which the Administrative Trustees have power to act, any power of
the Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(c) Unless otherwise determined by the Administrative Trustees,
and except as otherwise required by the Business Trust Act or applicable law,
any Administrative Trustee is authorized to execute on behalf of the Trust any
documents which the Administrative Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Administrative Trustees; and
(d) An Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
SECTION 5.6 Delaware Trustee.
----------------
The initial Delaware Trustee shall be:
Bankers Trust (Delaware)
_________________________
_________________________
_________________________
Attention: _____________
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
------------------------------------------------
(a) Subject to Section 5.7(b), any Trustee may be appointed or
removed without cause at any time:
27
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) in the case of Administrative Trustees, after the issuance
of any Securities, by vote of the Holders of a Majority in Liquidation
Amount of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities;
(iii) in the case of the Property Trustee and the Delaware
Trustee, unless an Event of Default shall have occurred and be continuing
after the issuance of any Securities, by vote of the Holders of a Majority
in Liquidation Amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
(iv) in the case of the Property Trustee and the Delaware
Trustee, if an Event of Default shall have occurred and be continuing after
the issuance of the Securities, by vote of Holders of a Majority in
Liquidation Amount of the Preferred Securities voting as a class at a
meeting of Holders of the Preferred Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Property Trustee under Section 5.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the removed Property Trustee, the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2
and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the removed Delaware Trustee, the
Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor Property
Trustee and delivered to the Administrative Trustees, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the Holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Administrative Trustees, the
Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint
28
a Successor Delaware Trustee or Successor Property Trustee, as the case may be,
if the Property Trustee or the Delaware Trustee delivers an instrument of
resignation in accordance with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.8 Vacancies Among Trustees.
------------------------
If a Trustee ceases to hold office for any reason and the number
of Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees
is increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees, shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
-------------------
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 5.10 Meetings.
--------
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice
of any telephonic meetings of the Administrative Trustees or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Trust Agreement, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the written consent of the Administrative Trustees. In the event there is
only one Administrative Trustee, any and all action of such Administrative
Trustee shall be evidenced by a written consent of such Administrative Trustee.
SECTION 5.11 Delegation of Power.
-------------------
29
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any Person into which the Property Trustee or the Delaware Trustee or
any Administrative Trustee that is not a natural person, as the case may be, may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which such Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided such Person shall be otherwise
qualified and eligible under this Article.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
-------------
Each Holder shall receive Distributions in accordance with the
applicable terms of such Holder's Securities. If and to the extent that the
Debenture Issuer makes a payment of interest (including Compounded Interest (as
defined in the Indenture) and Additional Sums (as defined in the Indenture)),
premium and/or principal or any other payments on the Debentures held by the
Property Trustee (the amount of any such payment being a "Payment Amount"), the
Property Trustee shall and is directed, to the extent funds are available for
that purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders in accordance with the respective terms of the Securities held by them.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities
---------------------------------------
(a) The Administrative Trustees shall on behalf of the Trust issue
one class of Preferred Securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata (as defined in Annex I hereto) with the Common Securities
except that, where an Event of Default has occurred and is continuing, the
rights of Holders of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights to payment of the Holders of the Preferred
Securities.
30
(c) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Trust
Agreement, the Securities so issued shall be deemed to be validly issued, fully
paid and non-assessable.
(e) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this Trust
Agreement, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Trust Agreement.
SECTION 7.2 Execution and Authentication.
----------------------------
The Securities shall be signed on behalf of the Trust by an
Administrative Trustee. Such signature may be by manual or facsimile signature.
Typographical and other minor errors or defects in any reproduction of any such
signature shall not affect the validity of any Security. In case any
Administrative Trustee who shall have signed any of the Securities shall cease
to be such Administrative Trustee before the Securities so signed shall be
delivered by the Trust, such Securities nevertheless may be delivered as though
the Person who signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by such Persons
who, at the actual date of execution of such Security, shall be the
Administrative Trustees of the Trust, although at the date of the execution and
delivery of the Trust Agreement any such Person was not such an Administrative
Trustee.
A Common Security shall be valid upon execution by an
Administrative Trustee without any act of the Property Trustee. A Preferred
Security shall not be valid until authenticated by the manual signature of an
authorized officer of the Property Trustee. The signature shall be conclusive
evidence that the Preferred Security has been authenticated under this Trust
Agreement.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue. The aggregate number of Preferred Securities outstanding at any
time shall not exceed the number set forth in the Terms in Annex I hereto except
as provided in Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Property Trustee may do
so. Each reference in this Trust Agreement to authentication by the Property
Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Property Trustee to deal with the Sponsor or an Affiliate.
31
SECTION 7.3 Form and Dating.
---------------
The Preferred Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Trust
Agreement. Certificates representing the Securities may be printed, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Administration Trustees, as evidenced by their execution thereof). The
Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Trust Agreement and to the
extent applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Trust Agreement, expressly agree to such terms and provisions
and to be bound thereby.
(a) Global Securities. The Preferred Securities offered and sold
-----------------
to underwriters named in the Underwriting Agreement shall be issued in the form
of one or more, permanent global Securities in definitive, fully registered form
without Distribution coupons with the appropriate global legends set forth in
Exhibit A-1 hereto (a "Global Preferred Security"), which shall be deposited on
behalf of the purchasers of the Preferred Securities represented thereby with
the Property Trustee or the Registrar, as custodian for the Clearing Agency, and
registered in the name of the Clearing Agency or a nominee of the Clearing
Agency, duly executed by the Trust and authenticated by the Property Trustee as
hereinafter provided. The number of Preferred Securities represented by the
Global Preferred Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the Clearing Agency
or its nominee as hereinafter provided.
(b) Book-Entry Provisions. The Administrative Trustees shall
---------------------
execute and the Property Trustee shall, in accordance with this Section 7.3,
authenticate and make available for delivery initially one or more Global
Preferred Securities that (i) shall be registered in the name of Cede & Co. or
other nominee of such Clearing Agency and (ii) shall be delivered by the Trustee
to such Clearing Agency or pursuant to such Clearing Agency's written
instructions or held by the Property Trustee or the Registrar as custodian for
the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Trust Agreement with respect to
any Global Preferred Security held on their behalf by the Clearing Agency or by
the Property Trustee or the Registrar as the custodian of the Clearing Agency or
under such Global Preferred Security, and the Clearing Agency may be treated by
the Trust, the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Preferred Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in any
Global Preferred Security.
(c) Definitive Preferred Securities. Except as provided in
-------------------------------
Section 7.9, owners of beneficial interests in a Global Preferred Security will
not be entitled to receive physical delivery of certificated Preferred
Securities (sometimes referred to herein as "Definitive Preferred Securities").
32
SECTION 7.4 Registrar and Paying Agent.
--------------------------
The Trust shall maintain in the Borough of Manhattan, The City of
New York, (i) an office or agency where Preferred Securities may be presented
for registration of transfer ("Registrar") and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Trust may appoint the Registrar and the Paying Agent and may
appoint one or more co-registrars, one or more additional paying agents in such
other locations as it shall determine. The term "Registrar" includes any
additional registrar and the term "Paying Agent" includes any additional paying
agent. The Trust may change any Paying Agent, Registrar or co-registrar without
prior notice to any Holder. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee and the
Sponsor. The Trust shall notify the Property Trustee of the name and address of
any Agent not a party to this Trust Agreement. If the Trust fails to appoint or
maintain another entity as Registrar or Paying Agent, the Property Trustee shall
act as such. The Trust or any of its Affiliates may act as Paying Agent or
Registrar. The Property Trustee shall act as Paying Agent and Registrar for the
Common Securities.
The Trust initially appoints the Property Trustee as Registrar
and Paying Agent for the Preferred Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
-----------------------------------
The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of Liquidation Amounts or Distributions on the Securities, and
will notify the Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment
over to the Property Trustee the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
----------------------
If the Holder of a Security claims that the Security has been
lost, destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Preferred Securities to the
Property Trustee, the Administrative Trustees shall execute and the Property
Trustee shall authenticate a replacement Security if the Property Trustee's and
the Administrative Trustees' requirements, as the case may be, are met. An
indemnity bond must be provided by the Holder which, in the judgment of the
Property Trustee, is sufficient to protect the Trustees, the Sponsor or any
authenticating agent from any loss which any of them may suffer if a Security is
replaced. The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security is an additional beneficial interest
in the Trust.
SECTION 7.7 Outstanding Preferred Securities.
--------------------------------
The Preferred Securities outstanding at any time are all the
Preferred Securities authenticated by the Property Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Preferred Security is replaced, paid or purchased pursuant
to Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased
33
Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with
the terms of this Trust Agreement, they cease to be outstanding and
Distributions on them shall cease to accumulate.
Except as otherwise provided herein, a Preferred Security does
not cease to be outstanding because one of the Trustees, the Sponsor or an
Affiliate of the Sponsor holds the Security.
SECTION 7.8 Preferred Securities in Treasury.
--------------------------------
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Preferred
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Preferred
Securities which a Responsible Officer of the Property Trustee actually knows
are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities.
--------------------
(a) Until Definitive Securities are ready for delivery, the Trust
may prepare and, in the case of the Preferred Securities, the Property Trustee
shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Trust considers appropriate for temporary Securities. Without unreasonable
delay, the Trust shall prepare and, in the case of the Preferred Securities, the
Property Trustee shall authenticate Definitive Securities in exchange for
temporary Securities.
(b) A Global Preferred Security deposited with the Clearing
Agency or with the Property Trustee as custodian for the Clearing Agency
pursuant to Section 7.3 shall be transferred to the beneficial owners thereof in
the form of certificated Preferred Securities only if such transfer complies
with Section 9.2 and (i) the Clearing Agency notifies the Company that it is
unwilling or unable to continue as Clearing Agency for such Global Preferred
Security or if at any time such Clearing Agency ceases to be a "clearing agency"
registered under the Exchange Act and a clearing agency is not appointed by the
Sponsor within 90 days of such notice, (ii) a Default or an Event of Default has
occurred and is continuing or (iii) the Trust at its sole discretion elects to
cause the issuance of certificated Preferred Securities.
(c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in _________________________, to be so transferred, in
whole or from time to time in part, without charge, and the Property Trustee
shall authenticate and make available for delivery, upon such transfer of each
portion of such Global Preferred Security, an equal aggregate Liquidation Amount
of Securities of authorized denominations in the form of certificated Preferred
Securities. Any portion of a Global Preferred Security transferred pursuant to
this Section shall be registered in such names as the Clearing Agency shall
direct.
(d) Subject to the provisions of Section 7.9(c), the Holder of a
Global Preferred Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Trust
Agreement or the Securities.
(e) In the event of the occurrence of any of the events specified
in Section 7.9(b), the Trust will promptly make available to the Property
Trustee a reasonable supply of certificated Preferred Securities in fully
registered form without Distribution coupons.
34
SECTION 7.10 Cancellation.
------------
The Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Property Trustee any Preferred Securities surrendered to them for registration
of transfer, redemption, exchange or payment. The Property Trustee shall
promptly cancel all Preferred Securities surrendered for registration of
transfer, redemption, exchange, payment, replacement or cancellation and shall
dispose of canceled Preferred Securities in accordance with its customary
procedures unless any Administrative Trustee otherwise directs the Property
Trustee in writing. The Trust may not issue new Preferred Securities to replace
Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has exchanged.
SECTION 7.11 CUSIP Numbers.
-------------
The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
--------------------
(a) The Trust shall automatically be terminated and dissolved and
its affairs wound up upon the earliest to occur of the following events:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor, or the
revocation of the Sponsor's charter and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the
Debentures to the Holders of the Securities, provided that, the Property
Trustee has received written notice from the Sponsor directing the Property
Trustee to terminate the Trust (which direction is optional and within the
discretion of the Sponsor);
(iv) upon the entry of a decree of judicial dissolution of
the Trust by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities; or
(vi) the expiration of the term of the Trust provided in
Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a)
35
and the completion of the winding up of the Trust and after satisfaction of all
liabilities of the Trust (whether by payment or by making reasonable provision
for payment thereof), the Administrative Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Trust Agreement and
in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Trust Agreement shall be null and
void.
(b) Subject to this Article IX, Preferred Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Trust Agreement. Any transfer or purported transfer of any
Security not made in accordance with this Trust Agreement shall be null and
void.
(c) Subject to Section 3.15, the Sponsor and any Related Party may
only transfer the Common Securities to the Sponsor or a Related Party after the
delivery to the Property Trustee of an Officers' Certificate certifying that the
transferee is either the Sponsor or a Related Party.
(d) The Property Trustee shall provide for the registration of
Securities and of the transfer of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Property Trustee may
require) in respect of any tax or other governmental charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Securities, the Administrative Trustees shall execute and the Property Trustee
shall cause one or more new Securities to be issued in the name of the
designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Property Trustee duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Security
surrendered for registration of transfer shall be delivered to the Property
Trustee and canceled in accordance with Section 7.10. A transferee of a
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Trust Agreement.
SECTION 9.2 Transfer Procedures and Restrictions.
------------------------------------
(a) Transfer and Exchange of Definitive Preferred Securities. When
--------------------------------------------------------
Definitive Preferred Securities are presented to the Registrar or co-Registrar:
(x) to register the transfer of such Definitive Preferred
Securities, or
(y) to exchange such Definitive Preferred Securities which became
mutilated, destroyed, defaced, stolen or lost, for an equal number of
Definitive Preferred Securities,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the Trust and
the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
36
(b) Restrictions on Transfer of a Definitive Preferred Security for a
-----------------------------------------------------------------
Beneficial Interest in a Global Preferred Security. A Definitive Preferred
--------------------------------------------------
Security may not be exchanged for a beneficial interest in a Global Preferred
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with Preferred Security is a
Global Preferred Security, written instructions directing the Property Trustee
to make, or to direct the Clearing Agency to make, an adjustment on its books
and records with respect to the appropriate Global Preferred Security to reflect
an increase in the number of the Preferred Securities represented by such Global
Preferred Security, then the Property Trustee shall cancel such Definitive
Preferred Security and cause, or direct the Clearing Agency to cause, the
aggregate number of Preferred Securities represented by the appropriate Global
Preferred Security to be increased accordingly. If no Global Preferred
Securities are then outstanding, the Trust shall issue and the Property Trustee
shall authenticate, upon written order of any Administrative Trustee, an
appropriate number of Preferred Securities in global form.
(c) Transfer and Exchange of Global Preferred Securities. Subject to
----------------------------------------------------
Section 9.2(d), the transfer and exchange of Global Preferred Securities or
beneficial interests therein shall be effected through the Clearing Agency, in
accordance with this Trust Agreement (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the Clearing Agency
therefor.
37
(d) Transfer of a Beneficial Interest in a Global Preferred Security
----------------------------------------------------------------
for a Definitive Preferred Security.
-----------------------------------
(i) Any Person having a beneficial interest in a Global
Preferred Security may upon request, but only upon 20 days prior notice to
the Property Trustee, and if accompanied by the information specified
below, exchange such beneficial interest for a Definitive Preferred
Security representing the same number of Preferred Securities. Upon receipt
by the Property Trustee from the Clearing Agency, or its nominee on behalf
of any Person having a beneficial interest in a Global Preferred Security,
of written instructions or such other form of instructions as is customary
for the Clearing Agency, or the Person designated by the Clearing Agency as
having such a beneficial interest in a Preferred Security, and a
certification from the transferor (in a form substantially similar to that
attached hereto as the "Form of Assignment" in Exhibit A-1), which may be
submitted by facsimile, then the Property Trustee will cause the aggregate
number of Preferred Securities represented by Global Preferred Securities
to be reduced on its books and records and, following such reduction, the
Trust will execute and the Property Trustee will authenticate and make
available for delivery to the transferee a Definitive Preferred Security;
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global Preferred Security pursuant to this Section
9.2(d) shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its
Participants or indirect participants or otherwise, shall instruct the
Property Trustee in writing. The Property Trustee shall deliver such
Preferred Securities to the Persons in whose names such Preferred
Securities are so registered in accordance with such instructions of the
Clearing Agency.
(e) Restrictions on Transfer and Exchange of Global Preferred
---------------------------------------------------------
Securities. Notwithstanding any other provisions of this Trust Agreement (other
----------
than the provisions set forth in subsection (g) of this Section 9.2), a Global
Preferred Security may not be transferred as a whole except by the Clearing
Agency to a nominee of the Clearing Agency or another nominee of the Clearing
Agency or by the Clearing Agency or any such nominee to a successor Clearing
Agency or a nominee of such successor Clearing Agency.
(f) Authentication of Definitive Preferred Securities. If at any time
-------------------------------------------------
Global Preferred Securities are outstanding:
(i) there occurs a Default or an Event of Default which is
continuing,
(ii) the Trust, in its sole discretion, notifies the Property
Trustee in writing that it elects to cause the issuance of Definitive
Preferred Securities under this Trust Agreement, or
(iii) the Trust is required to exchange such Global Preferred
Securities for Definitive Preferred Securities as described in Section
7.9(b),
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Administrative Trustee requesting the
authentication and delivery of Definitive Preferred Securities to the Persons
designated by the Trust, will authenticate and make available for delivery
Definitive Preferred Securities, equal in number to the number of Preferred
Securities represented by the Global Preferred Securities, in exchange for such
Global Preferred Securities.
(g) Cancellation or Adjustment of Global Preferred Security. At such
-------------------------------------------------------
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by this
Trust Agreement or redeemed, repurchased or canceled in accordance with the
terms of this Trust Agreement, such Global Preferred Security shall be canceled
by the Property Trustee. At any time prior to such
38
cancellation, if any beneficial interest in a Global Preferred Security is
exchanged for Definitive Preferred Securities, Preferred Securities represented
by such Global Preferred Security shall be reduced and an adjustment shall be
made on the books and records of the Property Trustee (if it is then the
custodian for such Global Preferred Security) with respect to such Global
Preferred Security, by the Property Trustee or the Securities custodian, to
reflect such reduction.
(h) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Preferred Securities.
--------------------
(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Property Trustee shall authenticate Definitive
Preferred Securities and Global Preferred Securities at the Registrar's or
co-Registrar's request in accordance with the terms of this Trust
Agreement.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the Trust,
the Property Trustee or the Sponsor may require) in respect of any tax or
other governmental charge that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange (a) Preferred Securities during a
period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Preferred
Securities for redemption and ending at the close of business on the day of
such mailing; or (b) any Preferred Security so selected for redemption in
whole or in part, except the unredeemed portion of any Preferred Security
being redeemed in part.
(iv) Prior to the due presentation for registrations of
transfer of any Preferred Security, the Trust, the Property Trustee, the
Paying Agent, the Registrar or any co-registrar may deem and treat the
Person in whose name a Preferred Security is registered as the absolute
owner of such Preferred Security for the purpose of receiving Distributions
on such Preferred Security and for all other purposes whatsoever, and none
of the Trust, the Property Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Preferred Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Trust Agreement shall
evidence the same security and shall be entitled to the same benefits under
this Trust Agreement as the Preferred Securities surrendered upon such
registration of transfer or exchange.
(i) No Obligation of the Property Trustee.
-------------------------------------
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred Security, a
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of any
Participant thereof, with respect to any ownership interest in the
Preferred Securities or with respect to the delivery to any Participant,
beneficial owner or other Person (other than the Clearing Agency) of any
notice (including any notice of redemption) or the payment of any amount,
under or with respect to such Preferred Securities. All notices and
communications to be given to the Holders and all payments to be made to
Holders under the Preferred Securities shall be given or made only to or
upon the order of the registered Holders (which shall be the Clearing
Agency or its nominee in the case of a Global Preferred Security). The
rights of beneficial owners in any Global Preferred Security shall be
exercised only through the Clearing Agency subject to the applicable rules
and procedures of the Clearing Agency. The Property Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Clearing Agency or any agent thereof with respect to its
Participants and any beneficial owners.
39
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this Trust Agreement or under
applicable law with respect to any transfer of any interest in any
Preferred Security (including any transfers between or among Clearing
Agency Participants or beneficial owners in any Global Preferred Security)
other than to require delivery of such certificates and other documentation
or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Trust Agreement, and to examine
the same to determine substantial compliance as to form with the express
requirements hereof.
SECTION 9.3 Deemed Security Holders.
-----------------------
The Trustees may treat the Person in whose name any Security shall be
registered on the books and records of the Trust as the sole owner of such
Security for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Security on the part of any Person, whether
or not the Trustees shall have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
--------------------
Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security certificate (a "Preferred Security Certificate") representing
such Preferred Security Beneficial Owner's interests in such Global Preferred
Securities, except as provided in Section 9.2. Unless and until definitive,
fully registered Preferred Securities certificates have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.2:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Property Trustee and the Administrative
Trustees shall be entitled to deal with the Clearing Agency for all purposes of
this Trust Agreement (including the payment of Distributions on the Global
Preferred Securities and receiving approvals, votes or consents hereunder) as
the Holder of the Preferred Securities and the sole holder of the Global
Certificates and shall have no obligation to the Preferred Security Beneficial
Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and
receive and transmit payments of Distributions on the Global Certificates to
such Clearing Agency Participants. DTC will make book entry transfers among the
Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
--------------------------
Whenever a notice or other communication to the Preferred Security
Holders is required under this Trust Agreement, the Trustees shall give all such
notices and communications specified herein to be given to the Holders of Global
Preferred Security to the Clearing Agency, and shall have no notice obligations
to the Preferred Security Beneficial Owners.
40
SECTION 9.6 Appointment of Successor Clearing Agency.
----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Preferred Securities.
41
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
---------
(a) Except as expressly set forth in this Trust Agreement, the
Securities Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Sponsor shall be liable for all of the fees, expenses,
debts and obligations of the Trust (other than with respect to the Securities)
to the extent not satisfied out of the Trust's assets.
(c) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders
of the Preferred Securities shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Trust Agreement or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
42
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and reasonable to
the Trust or any Holder of Securities,
each Covered Person or Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Trust Agreement or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Trust Agreement an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Trust Agreement
or by applicable law.
SECTION 10.4 Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Trust, and with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit
by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees and expenses) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any
43
claim, issue or matter as to which such Company Indemnified Person shall
have been adjudged to be liable to the Trust unless and only to the extent
that the Court of Chancery of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
such Person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Administrative Trustees by a majority vote of a quorum consisting of
such Administrative Trustees who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Administrative Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the
Sponsor in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Administrative Trustees by a majority vote of a
quorum of disinterested Administrative Trustees, (ii) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or the
Common Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such Person did
not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Administrative Trustees, independent legal counsel or Common Security
Holder reasonably determine that such Person deliberately breached his duty
to the Trust or its Common or Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 10.4(a)
shall not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Sponsor
or Preferred Security Holders of the Trust or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office. All rights to indemnification under this Section 10.4(a) shall
be deemed to be provided by a contract between the Sponsor and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
44
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Sponsor would have the power to indemnify him against such liability under
the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any Person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a Person who has
ceased to be a Company Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such a Person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee, (ii)
the Delaware Trustee, (iii) any Affiliate of the Property Trustee or the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the resignation or
removal of the Property Trustee or the Delaware Trustee and the satisfaction and
discharge of this Trust Agreement.
(c) The Sponsor agrees to pay the Property Trustee and the Delaware
Trustee, from time to time, such compensation for all services rendered by the
Property Trustee and the Delaware Trustee hereunder as may be mutually agreed
upon in writing by the Sponsor and the Property Trustee or the Delaware Trustee,
as the case may be, and, except as otherwise expressly provided herein, to
reimburse the Property Trustee and the Delaware Trustee upon its or their
request for all reasonable expenses, disbursements and advances incurred or made
by the Property Trustee or the Delaware Trustee, as the case may be, in
accordance with the provisions of this Trust Agreement, except any such expense,
disbursement or advance as may be attributable to its or their negligence or bad
faith.
SECTION 10.5 Outside Businesses.
------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee
45
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
-----------
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss.
(c) The Administrative Trustees shall cause to be duly prepared
and delivered to each of the Holders of Securities, any annual United States
federal income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees shall
endeavor to deliver all such information statements within 30 days after the end
of each Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared
and filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 11.3 Banking.
-------
The Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Property Trustee shall be made directly
to the Property Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
SECTION 11.4 Withholding.
-----------
46
The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount
required to be withheld was not withheld from actual Distributions made, the
Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
----------
(a) Except as otherwise provided in this Trust Agreement or by
any applicable terms of the Securities, this Trust Agreement may only be amended
by a written instrument approved and executed by:
(i) the Administrative Trustees (or if there are more than two
Administrative Trustees a majority of the Administrative Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property Trustee;
and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an Officers' Certificate from
each of the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Trust Agreement (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Property Trustee, the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Trust Agreement (including the terms of the Securities);
and
(B) an opinion of counsel (who may be counsel to the Sponsor
or the Trust) that (x) such amendment is permitted by, and conforms
to, the terms of this Trust Agreement (including the terms of the
Securities) and (y) all conditions precedent to the execution and
delivery of such amendment have been satisfied,
provided, however, that the Property Trustee shall not be required to sign
-------- -------
any such amendment, and
47
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) At such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 10.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities;
(f) The rights of the Holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a Majority in
Liquidation Amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Trust Agreement may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity, correct or supplement any provision in
this Trust Agreement that may be inconsistent with any other provision of
this Trust Agreement or to make any other provisions with respect to
matters or questions arising under this Trust Agreement which shall not be
inconsistent with the other provisions of the Trust Agreement; and
(ii) to modify, eliminate or add to any provisions of the Trust
Agreement to such extent as shall be necessary to (A) ensure that the Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding, (B) to
ensure that the Trust will not be required to register as an Investment
Company under the Investment Company Act, or (C) to ensure that the
proceeds from the sale of the Securities will constitute "tier 1 capital"
under capital adequacy requirements which may be applicable to the Sponsor;
provided, however, that in the case of clause (i), such action shall not
-------- -------
adversely affect in any material respect the interests of the Holders of the
Securities, and any amendments of this Trust Agreement shall become effective
when notice thereof is given to the Holders of the Securities.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
----------------------------------------------------------------
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Trust Agreement,
the terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading.
48
The Administrative Trustees shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in Liquidation Amount of such
class of Securities. Such direction shall be given by delivering to the
Administrative Trustees one or more notices in a writing stating that the
signing Holders of Securities wish to call a meeting and indicating the general
or specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Security Certificates
held by the Holders of Securities exercising the right to call a meeting and
only those Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least seven days
and not more than 60 days before the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Trust Agreement or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading, such vote, consent
or approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in Liquidation Amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Administrative Trustees may specify that any written ballot submitted
to the Security Holder for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Administrative Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Trust Agreement, the
terms of the Securities, the Trust Indenture Act or the listing rules of
any stock exchange on which the Preferred Securities are then listed or
trading, otherwise provides, the Administrative Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a meeting,
the establishment of a record date, quorum requirements, voting in person
or by proxy or any other matter with respect to the exercise of any such
right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
49
SECTION 13.1 Representations and Warranties of Property Trustee.
--------------------------------------------------
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Trust Agreement,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) The Property Trustee is a national banking association with
trust powers and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, this Trust Agreement;
(b) The execution, delivery and performance by the Property
Trustee of this Trust Agreement has been duly authorized by the Property
Trustee. This Trust Agreement has been duly executed and delivered by the
Property Trustee and constitutes a legal, valid and binding obligation of the
Property Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law);
(c) The execution, delivery and performance of this Trust
Agreement by the Property Trustee does not conflict with or constitute a breach
of the charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration
with or notice to, any [North Carolina State] or federal banking authority is
required for the execution, delivery or performance by the Property Trustee of
this Trust Agreement.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
--------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Trust Agreement,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
or is a national banking association, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
this Trust Agreement;
(b) The execution, delivery and performance by the Delaware
Trustee of this Trust Agreement has been duly authorized by all necessary
corporate action on the part of the Delaware Trustee and does not conflict with
or constitute a breach of the charter or by-laws of the Delaware Trustee. This
Trust Agreement has been duly executed and delivered by the Delaware Trustee and
constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any federal or Delaware banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this Trust
Agreement; and
(d) The Delaware Trustee is a natural person who is a resident
of the State of Delaware or,
50
if not a natural person, an entity which has its principal place of business in
the State of Delaware.
51
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
-------
All notices provided for in this Trust Agreement shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Trust may give notice of to the Holders of the Securities):
New South Capital Trust I
c/o New South Bancshares, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: __________________
Telecopy: (205) 951-____
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Bankers Trust (Delaware)
[Delaware address]
_______________________
_______________________
Attention: _____________________
Telecopy: (___) ____-____
(c) if given to the Property Trustee, at the Property Trustee's
mailing address set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities):
Bankers Trust Company
_______________________
_______________________
Attention: Xxxxxx Xxxxxxx
Telecopy: (___) ___-____
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
New South Bancshares, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: __________________
Telecopy: (205) 951-____
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused
52
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
-------------
This Trust Agreement and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
------------------------
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Trust Agreement shall be interpreted to further this
intention of the parties.
SECTION 14.4 Headings.
--------
Headings contained in this Trust Agreement are inserted for
convenience of reference only and do not affect the interpretation of this Trust
Agreement or any provision hereof.
SECTION 14.5 Successors and Assigns.
----------------------
Whenever in this Trust Agreement any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Trust Agreement by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
SECTION 14.6 Partial Enforceability.
----------------------
If any provision of this Trust Agreement, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Trust Agreement, or the application of such provision to
Persons or circumstances other than those to which it is held invalid, shall not
be affected thereby.
SECTION 14.7 Counterparts.
------------
This Trust Agreement may contain more than one counterpart of the
signature page and this Trust Agreement may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
53
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
_______________________________________________
Xxxxxxxx X. Xxxxxxx, solely in her capacity as
Administrative Trustee
_______________________________________________
Xxxxxxx X. Xxxxx, solely in her capacity as
Administrative Trustee
BANKERS TRUST (DELAWARE),
solely in its capacity as Delaware Trustee
By:____________________________________________
Name:
Title:
BANKERS TRUST COMPANY,
solely in its capacity as Property Trustee
By:____________________________________________
Name:
Title:
NEW SOUTH BANCSHARES, INC.
as Sponsor
By:____________________________________________
Name:
Title:
54
ANNEX I
TERMS OF
_____% PREFERRED SECURITIES
_____% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Trust Agreement,
dated as of __________, 1998 (as amended from time to time, the "Trust
Agreement"), the designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities and the Common Securities
(collectively, the "Securities") are set out below (each capitalized term used
but not defined herein has the meaning set forth in the Trust Agreement or, if
not defined in such Trust Agreement, as defined in the Registration Statement
referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
----------------------
(a) Preferred Securities. 3,000,000 Preferred Securities of the Trust
--------------------
with an aggregate liquidation amount with respect to the assets of the Trust of
Thirty Million Dollars ($30,000,000) and each with a liquidation amount with
respect to the assets of the Trust of $10 per security, are hereby designated
for the purposes of identification only as "_____% Preferred Securities" (the
"Preferred Securities"). The certificates evidencing the Preferred Securities
shall be substantially in the form of Exhibit A-1 to the Trust Agreement, with
such changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange or quotation system on which the Preferred Securities are listed or
quoted.
(b) Common Securities. 92,783.4 Common Securities of the Trust with
-----------------
an aggregate liquidation amount with respect to the assets of the Trust of Nine
Hundred Twenty Seven Thousand, Eight Hundred and Forty Dollars ($927,840)
and a liquidation amount with respect to the assets of the Trust of $10 per
security, are hereby designated for the purposes of identification only as
"_____% Common Securities" (the "Common Securities"). The certificates
evidencing the Common Securities shall be substantially in the form of Exhibit
A-2 to the Trust Agreement, with such changes and additions thereto or deletions
therefrom as may be required by ordinary usage, custom or practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be fixed at a rate
per annum of _____% (the "Coupon Rate") of the liquidation amount of $10 per
Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one quarterly period will bear additional distributions
thereon compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein, includes
distributions of any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from __________, 1998, and will be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing on September 30, 1998, except as otherwise described below.
The amount of Distributions payable for any period will be computed on the basis
of a 360-day year consisting of twelve 30-day months and for any period less
than a full calendar month on the basis of the actual number of days elapsed in
such month. If any date on which Distributions are payable on the Securities is
not a Business Day, then payment of the Distribution payable on such date shall
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in
55
respect of any such delay), with the same force and effect as if made on
such date (each date on which Distributions are payable in accordance with the
foregoing, a "Distribution Date"). As long as no Event of Default has occurred
and is continuing under the Indenture, the Debenture Issuer has the right under
the Indenture to defer payments of interest by extending the interest payment
period at any time and from time to time on the Debentures for a period not
exceeding 20 consecutive quarterly periods, including the first such quarterly
period during such period (each an "Extension Period"), provided that no
Extension Period shall extend beyond the Maturity Date of the Debentures. Upon
any such election, distributions will be deferred during such Extension Period.
Notwithstanding such deferral, Distributions to which Holders of Securities are
entitled shall continue to accumulate with additional Distributions thereon (to
the extent permitted by applicable law but not at a rate greater than the rate
at which interest is then accruing on the Debentures) at the Coupon Rate
compounded quarterly from the relevant Distribution Date, during any such
Extension Period. Prior to the expiration of any such Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such Extension Period, together with all
such previous and further extensions within such Extension Period, may not
exceed 20 consecutive quarterly periods, including the first quarterly period
during such Extension Period, or extend beyond the Maturity Date of the
Debentures. Upon the expiration of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust at the close of
business on the first day of the month in which the relevant Distribution Date
falls, which Distribution Dates correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions
of the Trust Agreement, each such payment in respect of the Preferred Securities
will be made as follows: (i) if the Preferred Securities are held in global form
by a Clearing Agency (or its nominee), in accordance with the procedures of the
Clearing Agency; and (ii) if the Preferred Securities are held in definitive
form by check mailed to the address of the Holder thereof as reflected in the
records of the Registrar unless otherwise agreed by the Trust. The relevant
record dates for the Common Securities shall be the same as the record dates for
the Preferred Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be payable
to the Holder on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) pursuant to Section 8 among the Holders
of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
In the event of any termination of the Trust or the Sponsor otherwise
gives notice of its election to liquidate the Trust pursuant to Section
8.1(a)(iii) of the Trust Agreement, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount (as defined below) of the Debentures, unless such
distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive out of the assets of the
Trust legally available for distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate of the Liquidation Amount of $10 per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii)
56
with respect to a distribution of Debentures upon the liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets on hand legally
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Securities shall be paid on a Pro
Rata basis as set forth in Section 8.
4. Redemption and Distribution.
---------------------------
(a) Upon the repayment of the Debentures on the Maturity Date thereof
or prepayment thereof prior thereto in accordance with the terms thereof, the
proceeds from such repayment or prepayment shall be simultaneously applied by
the Property Trustee (subject to the Property Trustee having received notice no
later than 45 days prior to such repayment or prepayment) to redeem a Like
Amount of the Securities at a redemption price equal to 100% of the Liquidation
Amount of the Securities, plus accumulated and unpaid Distributions thereon, if
any, to the date of such redemption (the "Redemption Price"). Holders will be
given not less than 30 nor more than 60 days notice of such redemption.
(b) At any time after _______, 2003, the Debenture Issuer shall have
the right to prepay the Debentures in whole or in part, from time to time, and
simultaneous with such redemption, to cause a Like Amount of the Securities to
be redeemed by the Trust at the Redemption Price on a Pro Rata basis.
(c) If at any time a Capital Event, Tax Event or an Investment
Company Event (each as defined below, and each a "Special Event") occurs, the
Debenture Issuer shall have the right (subject to the conditions set forth in
the Indenture), upon not less than 30 nor more than 60 days notice, to prepay
the Debentures in whole, but not in part, within the 90 days following the
occurrence of such Special Event (the "90 Day Period"), and, simultaneous with
such redemption, to cause a Like Amount of the Securities to be redeemed by the
Trust at the Redemption Price on a Pro Rata basis.
"Capital Event" shall mean the receipt by the Company and the Trust of
an opinion of Xxxxx & Xxxxxxx LLP, or any other independent bank regulatory
counsel experienced in such matters, 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 rules,
guidelines or policies of the OTS, the Federal Reserve or any other federal bank
regulatory agency or (b) any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the date the Subordinated Debenture is issued by the Company to the Trust
pursuant to the Indenture (the "Issue Date"), (i) the Company is or within 90
days will be subject to capital adequacy requirements and such requirements do
not or will not permit the Preferred Securities to constitute, subject to
limitations on inclusion of the Preferred Securities as Tier 1 capital imposed
by Federal Reserve capital guidelines in effect as of the date of this
Prospectus, Tier 1 capital (or its then-equivalent) or (ii) the amount of net
proceeds received from the sale of the Preferred Securities and contributed by
the Company to New South does not or within 90 days will not constitute Tier 1
(core) capital (or its then-equivalent).
"Tax Event" shall mean the receipt by the Sponsor and the Trust of an
Opinion of Counsel, requested by the Sponsor, (a "Tax Event Opinion")
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative written decision or pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is made on or after ___________,
1998, there is more than an insubstantial risk that (i) the Trust is, or will be
within 90 days of the date of
57
such opinion, subject to United States federal income tax with respect to income
received or accrued on the Debentures, (ii) interest payable by the Debenture
Issuer on the Debentures is not, or within 90 days of the date of such opinion,
will not be, deductible by the Debenture Issuer, in whole or in part, for United
States federal income tax purposes, or (iii) the Trust is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Investment Company Event" means the Sponsor and the Trust shall have
received an opinion, requested by the Sponsor of counsel experienced in practice
under the Investment Company Act, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in Investment Company Act Law"), there
is more than an insubstantial risk that the Trust is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act, which Change in Investment Company Act Law becomes effective on or
after __________, 1998.
(d) On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the
Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) any certificates representing Securities not held by the Clearing
Agency or its nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of Debentures until
such certificates are presented to the Administrative Trustees or their agent
for cancellation, whereupon the Debenture Issuer will issue to such holder, and
the Debenture Trustee will authenticate, a certificate representing such
Debentures.
(e) The procedure with respect to redemptions or distributions of
Debentures shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for repayment or prepayment of the
Debentures. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given pursuant to this Section
4(e)(i), a Redemption/Distribution Notice shall be deemed to be given on the
day such notice is first mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, (which notice will be irrevocable), then (A)
with respect to Preferred Securities registered in the name of or held of
record by a Clearing Agency or its nominee, by 12:00 noon, New York City
time, on the redemption date, provided that the Debenture Issuer has paid
the Property Trustee a sufficient amount of cash in connection with the
related maturity or prepayment of the Debentures by 10:00 a.m., New York
City time, on the Maturity Date or the date of prepayment, as the case may
be, the Property Trustee will deposit irrevocably with the Clearing Agency
or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to such
Preferred Securities and will give the Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the relevant
Clearing Agency Participants, and (B) with respect to Preferred Securities
issued in certificated form and Common Securities, provided that the
Debenture Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related maturity or prepayment of the Debentures, the
Property Trustee will pay the relevant Redemption Price to the Holders of
such Securities by check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on the redemption date. If
a
58
Redemption/Distribution Notice shall have been given and funds deposited
as required, if applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as applicable,
Distributions will cease to accumulate on the Securities so called for
redemption and all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on such Redemption Price,
and such Securities shall cease to be outstanding.
(iii) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Securities will be subject to the rights of Holders of
Securities on the close of business on a regular record date in respect of a
Distribution Date occurring on or prior to such Redemption Date.
(iv) Neither the Administrative Trustees nor the Trust shall be
required to register or cause to be registered the transfer of (i) any
Securities beginning on the opening of business 15 days before the day of
mailing of a notice of redemption or any notice of selection of Securities
for redemption or (ii) any Securities selected for redemption. If any date
fixed for redemption of Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), with the same force and effect as if
made on such date fixed for redemption. If payment of the Redemption Price
in respect of any Securities is improperly withheld or refused and not paid
either by the Property Trustee or the Paying Agent or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee, Distributions on
such Securities will continue to accumulate from the original redemption
date to the actual date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating
the Redemption Price.
(v) Redemption/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) in respect of the Preferred
Securities, the Clearing Agency or its nominee (or any successor Clearing
Agency or its nominee) if the Global Certificates have been issued or, if
Definitive Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder thereof.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any of its Affiliates may at any
time and from time to time purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
------------------------------------
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Trust Agreement, the Holders of the Preferred
Securities will have no voting rights.
(b) So long as any Debentures are held by the Property Trustee,
the Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in Liquidation Amount
of all outstanding Preferred Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Preferred Securities. The Trustees
shall not revoke any action previously
59
authorized or approved by a vote of the Holders of the Preferred Securities
except by subsequent vote of such Holders. The Property Trustee shall notify
each Holder of Preferred Securities of any notice of default with respect to the
Debentures. In addition to obtaining the foregoing approvals of such Holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an opinion of counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
If and Event of Default under the Trust Agreement has occured and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on any due
date (including any Interest Payment Date or prepayment date or Maturity Date),
then a Holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or premium, if any, or
interest on a Like Amount of Debentures (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Common Securities Holder will be subrogated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Preferred Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consent.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Trust Agreement and the terms
of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under Sections 6(b), 6(c), and 7 as otherwise
required by law and the Trust Agreement, the Holders of the Common Securities
will have no voting rights.
(b) Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the Holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a Majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the Holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Sponsor as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Trust Agreement.
(c) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i)
60
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or power conferred on
such Debenture Trustee with respect to the Debentures, (ii) waive any past
default that is waivable under Section 5.07 of the Indenture, (iii) exercise any
right to rescind or annul a declaration of acceleration of the maturity of the
principal of the Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the Holders of
a Majority in Liquidation Amount of all outstanding Common Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Debentures affected thereby, no such consent shall be given by
the Property Trustee without the prior approval of each Holder of the Common
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of the Common Securities except by subsequent
vote of such Holders. The Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures. In addition
to obtaining the foregoing approvals of such Holders of the Common Securities,
prior to taking any of the foregoing actions, the Trustees shall obtain an
Opinion of Counsel experienced in such matters to the effect that the Trust will
not be classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
If an Event of Default under the Trust Agreement has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (including any Interest Payment Date or prepayment date or Maturity Date)
(or in the case of redemption, on the redemption date), then a Holder of Common
Securities may institute a Direct Action for enforcement of payment to such
Holder of the principal of or premium, if any, or interest on a Like Amount of
Debentures on or after the respective due date specified in the Debentures. In
connection with Direct Action, the rights of the Holders of Preferred Securities
will be subrogated to the rights of such Holder of Common Securities to the
extent of any payment made by the Debenture Issuer to such Holder of Common
Securities in such Direct Action. Except as provided in the second preceding
sentence, the Holders of Common Securities will not be able to exercise directly
any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Administrative Trustees will cause a notice of any meeting
at which Holders of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Trust Agreement and the terms of the
Securities.
61
7. Amendments to Trust Agreement and Indenture.
-------------------------------------------
In addition to the requirements set out in Section 12.1 of the Trust
Agreement, the Trust Agreement may be amended from time to time by the Sponsor
and the Trustees, without the consent of the Holders of the Securities (i) to
cure any ambiguity, correct or supplement any provisions in the Trust Agreement
that may be inconsistent with any other provisions, or to make any other
provisions with respect to matters or questions arising under the Trust
Agreement which shall not be inconsistent with the other provisions of the Trust
Agreement, or (ii) to modify, eliminate or add to any provisions of the Trust
Agreement to such extent as shall be necessary (A) to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding, (B)to ensure that the Trust
will not be required to register as an "investment company" under the Investment
Company Act, or (C) to ensure that the proceeds from the sale of the Securities
will constitute "tier 1 capital" under capital adequacy requirements which may
be applicable to the Sponsor; provided, however, that in the case of clause (i),
-------- -------
such action shall not adversely affect in any material respect the interests of
any Holder of Securities. Any amendments of the Trust Agreement pursuant to the
foregoing shall become effective when notice thereof is given to the holders of
the Securities. The Trust Agreement also may be amended by the Trustees and the
Sponsor with (i) the consent of Holders representing a Majority in Liquidation
Amount of all outstanding Securities, and (ii) receipt by the Trustees of an
Opinion of Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment will not affect
the Trust's status as a grantor trust for United States federal income tax
purposes or the Trust's exemption from status as an investment company under the
Investment Company Act, provided that, without the consent of each Holder of
-------- ----
Trust Securities, the Trust Agreement may not be amended to (i) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
8. Pro Rata.
--------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Trust Agreement has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate Liquidation Amount of
Preferred Securities held by the relevant Holder relative to the aggregate
Liquidation Amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate Liquidation Amount of all Common Securities outstanding.
9. Ranking.
-------
The Preferred Securities rank pari passu with the Common Securities
and payment thereon shall be made Pro Rata with the Common Securities, except
that, if an Event of Default under the Trust Agreement occurs and is continuing,
no payments in respect of Distributions on, or payments upon liquidation,
redemption or otherwise with respect to, the Common Securities shall be made
until the Holders of the Preferred Securities shall be paid in full the
Distributions, Redemption Price, Liquidation Distribution and other payments to
which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including
62
the subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
--------------------
The Holders of the Securities shall have no preemptive rights or
similar rights to subscribe for any additional securities.
12. Miscellaneous.
-------------
These terms constitute a part of the Trust Agreement.
The Sponsor will provide a copy of the Trust Agreement, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any supplemental indenture) to a Holder without
charge on written request to the Sponsor at its principal place of business.
63
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL PREFERRED SECURITY, INSERT: THIS
PREFERRED SECURITY IS A GLOBAL PREFERRED SECURITY WITHIN THE MEANING OF THE
TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO
TRANSFER OF THIS PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED
SECURITY AS A WHOLE BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY
OR BY A NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE
OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]
64
Certificate Number Number of Preferred Securities
CUSIP NO.
Certificate Evidencing Preferred Securities
of
NEW SOUTH CAPITAL TRUST I
_____% Preferred Securities
(Liquidation Amount $10 per Preferred Security)
NEW SOUTH CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________________ (the "Holder") is the registered owner of
___________________ Preferred Securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the _____% Preferred
Securities (Liquidation Amount $10 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated Trust
Agreement of the Trust dated as of __________, 1998, as the same may be amended
from time to time (the "Trust Agreement"), including the designation of the
terms of the Preferred Securities as set forth in Annex I to the Trust
Agreement. Capitalized terms used but not defined herein shall have the meaning
given them in the Trust Agreement. The Sponsor will provide a copy of the Trust
Agreement, the Preferred Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder and to the benefits of the
Preferred Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
65
IN WITNESS WHEREOF, an Administrative Trustee on behalf of the Trust
has duly executed this certificate.
Date:_________________
NEW SOUTH CAPITAL TRUST I
By: ______________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the within-
mentioned Trust Agreement.
BANKERS TRUST COMPANY,
as Property Trustee
By: _________________________
Authorized Officer
66
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of _____% (the "Coupon Rate") of the Liquidation Amount of $10
per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarterly period will bear interest thereon compounded quarterly
at the Coupon Rate (to the extent permitted by applicable law). The term
"Distributions", as used herein, includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Property Trustee has funds on hand legally
available therefor.
Distributions on the Preferred Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if any Distributions have been paid, from __________, 1998, and will be payable
quarterly in arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing on September 30, 1998, except as otherwise described below and
in the Trust Agreement. Distributions will be computed on the basis of a 360-
day year consisting of twelve 30-day months and, for any period less than a full
calendar month, the number of days elapsed in such month. As long as no Event
of Default has occurred and is continuing under the Indenture, the Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period at any time and from time to time on the
Debentures for a period not exceeding 20 consecutive calendar quarterly periods,
including the first such quarterly period during such extension period (each an
"Extension Period"), provided that no Extension Period shall extend beyond the
Maturity Date of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded quarterly during
any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 20 consecutive quarterly periods, including the first quarterly
period during such Extension Period, or extend beyond the Maturity Date of the
Debentures. Payments of Distributions that have accumulated but not been paid
during any Extension Period will be payable to Holders as they appear on the
books and records of the Trust on the records of the Trust on the record date
for the first scheduled Distribution payment date following the expiration of
such first record date after the end of the Extension Period. Upon the
expiration of any Extension Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
Subject to certain conditions set forth in the Trust Agreement and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Preferred Securities shall be redeemable as provided in the Trust
Agreement.
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__________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
___________________________
___________________________
___________________________
(Insert assignee's social security or tax identification number)
___________________________
___________________________
___________________________
(Insert address and zip code of assignee)
and irrevocably appoints
___________________________
___________________________
___________________________ agent to transfer this Preferred Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _________________
Signature: ____________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee*:_______ _______
__________
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
68
[Include the following if the Preferred Security bears a Global Preferred
Securities Legend --
Date: _______________________
Signature
(Sign exactly as you name appears on the
other side of this Preferred Security
Certificate)
69
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW.
THIS COMMON SECURITY MAY NOT BE TRANSFERRED EXCEPT TO NEW SOUTH
BANCSHARES, INC. OR A RELATED PARTY (AS DEFINED IN THE TRUST AGREEMENT).
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Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
NEW SOUTH CAPITAL TRUST I
_____% Common Securities
(Liquidation Amount $10 per Common Security)
NEW SOUTH CAPITAL TRUST I, a statutory business trust created under
the laws of the State of Delaware (the "Trust"), hereby certifies that New South
Bancshares, Inc. (the "Holder") is the registered owner of __________________
common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the _____% Common Securities (liquidation
amount $10 per Common Security) (the "Common Securities"). The Common
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Trust Agreement of the Trust dated as
of __________, 1998, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common Securities as
set forth in Annex I to the Trust Agreement. Capitalized terms used but not
defined herein shall have the meaning given them in the Trust Agreement. The
Sponsor will provide a copy of the Trust Agreement, the Common Securities
Guarantee and the Indenture (including any supplemental indenture) to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Upon receipt of this certificate, the Sponsor is bound by the Trust
Agreement and is entitled to the benefits thereunder and to the benefits of the
Common Securities Guarantee to the extent provided therein.
By its acceptance hereof, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the
Debentures.
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IN WITNESS WHEREOF, the Trust has executed this certificate this
________ day of __________, 1998.
NEW SOUTH CAPITAL TRUST I
By: _________________
Name:
Administrative Trustee
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of _____% (the "Coupon Rate") of the liquidation amount of $10 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
quarterly period will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions", as
used herein, includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Property Trustee and
to the extent the Property Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative, will accrue
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from __________, 1998 and will be payable
quarterly in arrears, on March 31, June 30, September 30 and December 31 of each
year, commencing on September 30, 1998, except as otherwise described below and
in the Trust Agreement. Distributions will be computed on the basis of a 360-day
year consisting of twelve 30 day months and, for any period less than a full
calendar month, the number of days elapsed in such month. As long as no Event of
Default has occurred and is continuing under the Indenture, the Debenture Issuer
has the right under the Indenture to defer payments of interest by extending the
interest payment period at any time and from time to time on the Debentures for
a period not exceeding 10 consecutive calendar quarterly periods, including the
first such quarterly period during such extension period (each an "Extension
Period"), provided that no Extension Period shall extend beyond the Maturity
Date of the Debentures. As a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, Distributions will continue to
accumulate with interest thereon (to the extent permitted by applicable law, but
not at a rate exceeding the rate of interest then accruing on the Debentures) at
the Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
defer payments of interest by further extending such Extension Period; provided
that such Extension Period, together with all such previous and further
extensions within such Extension Period, may not exceed 20 consecutive quarterly
periods, including the first quarterly period during such Extension Period, or
extend beyond the Maturity Date of the Debentures. Payments of Distributions
that have accumulated will be payable to Holders as they appear on the books and
records of the Trust on the record date for the first Distribution Date
following the expiration of such Extension Period. Upon the expiration of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements.
Subject to certain conditions set forth in the Trust Agreement and the
Indenture, the Property Trustee shall, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders to the Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the Trust
Agreement.
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__________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
___________________________
___________________________
___________________________
(Insert assignee's social security or tax identification number)
___________________________
___________________________
___________________________
(Insert address and zip code of assignee)
and irrevocably appoints _____________
___________________________
__________________________ agent to transfer this Common Security Certificate on
the books of the Trust. The agent may substitute another to act for him or her.
Date: __________________
Signature: _____________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*: _____________
__________
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
74
