EXHIBIT 10.5 (ii)
CAROLINA BANK HOLDINGS, INC.
AND
WILMINGTON TRUST COMPANY, AS TRUSTEE
INDENTURE
PRIME RATE PLUS 0.5%
DEFERRABLE INTEREST DEBENTURES
DUE MARCH 7, 2031
DATED AS OF MARCH 7, 2001
INDENTURE
INDENTURE, dated as of March 7, 2001, between CAROLINA BANK HOLDINGS, INC. a
North Carolina Corporation (the "Corporation"), and WILMINGTON TRUST COMPANY, a
Delaware banking corporation (the "Trustee").
RECITALS
WHEREAS, for its lawful corporate purposes, the Corporation has duly authorized
the execution and delivery of this Indenture to provide for the issuance of
unsecured securities to be known as its variable rate Deferrable Interest
Debentures due March 7, 2031 (hereinafter referred to as the "Debentures"), the
form and substance of such Debentures and the terms, provisions and conditions
thereof to be set forth as provided in this Indenture; and
WHEREAS, CBHI Capital Trust I, a Delaware statutory business trust (the
"Trust"), has offered to Peoples Bancorp of Xxxxx Xxxxxxxx, Xxx., Xxxxxx, XX, up
to Three Million Dollars ($3,000,000.00) aggregate liquidation amount of its
Preferred Securities (as defined herein) and proposes to invest the proceeds
from such offering, together with the proceeds of the issuance and sale by the
Trust to the Corporation of up to One Hundred Thousand Dollars ($100,000.00)
aggregate liquidation amount of its Common Securities (as defined herein), in up
to Three Million One Hundred Thousand Dollars ($3,100,000.00) aggregate
principal amount of the Debentures; and
WHEREAS, the Corporation has requested that the Trustee execute and deliver this
Indenture; and
WHEREAS, all requirements necessary to make this Indenture a valid instrument in
accordance with its terms, and to make the Debentures, when executed by the
Corporation and authenticated and delivered by the Trustee, the valid
obligations of the Corporation, have been performed, and the execution and
delivery of this Indenture have been duly authorized in all respects; and
WHEREAS, to provide the terms and conditions upon which the Debentures are to be
authenticated, issued and delivered, the Corporation has duly authorized the
execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement of the
Corporation, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of the
Debentures by the Trust, it is mutually covenanted and agreed as follows for the
equal and ratable benefit of the holders of the Debentures and intending to be
legally bound hereby:
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ARTICLE I.
DEFINITIONS
SECTION 1.1 DEFINITIONS OF TERMS.
The terms defined in this Section 1.1 (except as in this Indenture otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the
respective meanings specified in this Section 1.1 and shall include the plural
as well as the singular. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
Generally Accepted Accounting Principles as in effect at the time of
computation.
"Additional Interest" shall have the meaning set forth in Section 2.4 of
this Indenture.
"Administrative Trustees" shall have the meaning set forth in the Trust
Agreement.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified Person is a
general partner; (e) any officer or director of the specified Person; and (f)if
the specified Person is an individual, any entity of which the specified Person
is an executive officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to the
Debentures appointed by the Trustee pursuant to Section 2.11.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Corporation or any
duly authorized committee of such Board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Corporation to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such
certification.
"Business Day" means, with respect to the Debentures, any day other than a
Saturday or a Sunday or a day on which banking institutions in the City of
Greensboro, North Carolina are authorized or required by law, executive order or
regulation to close, or a day on which the principal Corporate Trust Office of
the Trustee or the Property Trustee is closed for business.
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"Capital Treatment Event" means the receipt by the Trust of an Opinion of
Counsel rendered by a law firm having a recognized banking practice, to the
effect that, as a result of any amendment to, or change (including any proposed
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision thereof or therein, or as a result of any official or
administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such proposed change pronouncement, action or decision is announced on or after
the date of original issuance of the Preferred Securities under the Trust
Agreement, there is more than an insubstantial risk that the Preferred
Securities would not constitute "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve
(or any successor regulatory authority with jurisdiction over bank holding
companies), or any capital adequacy guidelines as then in effect and applicable
to the Corporation.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the principal accounting officer, the
treasurer or any vice president of the Corporation. The Certificate need not
comply with the provisions of Section 15.7.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities" means undivided beneficial interests in the assets of
the Trust which rank pari passu with the Preferred Securities; provided,
however, that upon the occurrence of an Event of Default, the rights of holders
of Common Securities to payment in respect of (i) distributions and (ii)payments
upon liquidation, redemption and otherwise are subordinated to the rights of
holders of Preferred Securities.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
"Corporate Trust Office" means (i) when used with respect to the Trustee,
the office of the Trustee at which, at any particular time, its corporate trust
business shall be principally administered, which office at the date hereof is
located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Administration, or (ii) when used with
respect to the Property Trustee, the office of the Property Trustee, at which,
at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate
Trust Administration.
"Corporation" means Carolina Bank Holdings, Inc. a corporation duly
organized and existing under the laws of the State of North Carolina, and,
subject to the provisions of Article XII, shall also include its successors and
assigns.
"Coupon Rate" shall mean the Prime Rate, as defined herein, plus 0.5%.
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"Custodian" means any receiver, trustee, assignee, liquidator, or similar
official under any Bankruptcy Law.
"Debentures" shall have the meaning set forth in the Recitals hereto.
"Debentureholder," "holder of Debentures," "registered holder," or other
similar term, means the Person or Persons in whose name or names a particular
Debenture shall be registered on the books of the Corporation or the Trustee
kept for that purpose in accordance with the terms of this Indenture.
"Debenture Register" shall have the meaning set forth in Section 2.6(b).
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person, whether incurred on or prior to the date of the
Indenture or thereafter incurred, for claims in respect of financial derivative
products, including interest rate, foreign exchange rate and commodity forward
contracts, options, swaps and similar arrangements; (vii) every obligation of
the type referred to in clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable, directly or indirectly, as obligor
or otherwise.
"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning provided in Section 2.4A hereof.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Trust Agreement and the Debentures held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Trust Agreement.
"Event of Default" means, with respect to the Debentures, any event
specified in Section 7.1, which has continued for the period of time, if any,
and after the giving of the notice, if any, therein designated.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
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"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Generally Accepted Accounting Principles" means such accounting principles
as are generally accepted at the time of any computation required hereunder.
"Governmental Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged; or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided, however, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depository receipt.
"Herein," "hereof," and "hereunder," and other words of similar import,
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into in accordance with the terms hereof.
"Interest Payment Date," when used with respect to any installment of
interest on the Debentures, shall have the meaning set forth in Section 2.4.
"Investment Company Event" means the receipt by the Trust of an Opinion of
Counsel rendered by a law firm having a recognized tax and securities law
practice, to the effect that, as a result of the occurrence of a change in law
or regulation or a change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law"), the Trust is or shall be considered an "investment
company" that is required to be registered under the Investment Company Act,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Preferred Securities under the Trust Agreement.
"Maturity Date" means the date on which the Debentures mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon including Compounded Interest and Additional Interest, if any,
as set forth in Section 2.2.
"Ministerial Action" shall have the meaning set forth in Section 3.2.
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"Officers' Certificate" means a certificate signed by the Chairman,
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary, of the Corporation, and delivered to the Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means an opinion in writing of independent legal
counsel experienced in such matters as being opined upon, that is delivered to
the Trustee in accordance with the terms hereof.
"Other Debentures" means all junior subordinated debentures ranking pari
passu or junior to the Debentures (other than the Debentures) issued by the
Corporation from time to time and sold to trusts established or to be
established by the Corporation, in each case similar to the Trust to issue
securities intended to qualify for Tier I capital treatment.
"Outstanding" when used with reference to the Debentures, means, subject to
the provisions of Section 10.4, as of any particular time, all Debentures
theretofore authenticated and delivered by the Trustee under this Indenture,
except (a) Debentures theretofore canceled by the Trustee or any paying agent,
or delivered to the Trustee or any paying agent for cancellation or that have
previously been canceled; (b) Debentures or portions thereof for the payment or
redemption of which monies or Governmental Obligations in the necessary amount
shall have been deposited in trust with the Trustee or with any paying agent
(other than the Corporation) or shall have been set aside and segregated in
trust by the Corporation (if the Corporation shall act as its own paying agent);
provided, however, that if such Debentures or portions of such Debentures are to
be redeemed prior to the maturity thereof, notice of such redemption shall have
been given as provided in Article III or provision satisfactory to the Trustee
shall have been made for giving such notice; (c) Debentures in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.6 and (d) Debentures paid pursuant
to Section 2.8.
"Person" means any individual, corporation, partnership, joint-venture,
trust, business trust, limited liability company, joint-stock company,
unincorporated organization or government or any agency or political subdivision
thereof.
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"Place of Payment" means the place or places where the principal of and
interest on the Debentures are payable in accordance with the terms of this
Indenture.
"Predecessor Debenture" means every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.8 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.
"Preferred Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means the Preferred Securities Guarantee
Agreement dated March 7, 2001, as amended from time to time, by and between the
Corporation, as guarantor, and the Trustee, executed and delivered for the
benefit of the Holders of the Preferred Securities.
"Prime Rate" or "Prime" means the prime rate as published in The Wall
Street Journal, and shall be adjusted daily. For days on which The Wall Street
Journal is not published, the Prime Rate shall be the prime rate that would have
been published in The Wall Street Journal if it had been published on such day.
In the event the Prime Rate shall cease to be published on a daily basis by The
Wall Street Journal or the method of its determination shall be materially
changed, then the Prime Rate shall be a comparable index rate selected by the
holders of a majority in principal amount of Debentures then Outstanding,
provided that if the Debentures are then held by the Trust or a trustee of the
Trust, such selection shall require the prior written consent of the holders of
a majority in liquidation preference of Trust Securities of the Trust.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Regular Record Date" means the Business Day next preceding any Interest
Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee in its corporate trust administration who is responsible
for the administration of the Trust and whose name appears on the list of
Responsible Officers of the Trustee which shall be furnished by the Trustee to
the Corporation, as such list may be revised from time to time.
"Scheduled Maturity Date" means March 7, 2031.
"Securities Act" means the Securities Act of 1933, or any successor
statute, in each case as amended from time to time.
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"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures; provided, however, that Senior
Debt shall not be deemed to include (i) any Debt of the Corporation which when
incurred and without respect to any election under Section 1111 (b) of the
Bankruptcy Law was without recourse to the Corporation; (ii) any Debt of the
Corporation to any of its subsidiaries; (iii) any Debt to any employee of the
Corporation; and (iv) Debentures or Other Debentures, including Debentures sold
by the Corporation to the Trust.
"Senior Indebtedness" shall have the meaning set forth in Section 16.1.
"Special Event" means a Tax Event, an Investment Company Event or a Capital
Treatment Event.
"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other Debt of the Corporation (other than the Debentures), except that
Subordinated Debt shall not include: (i) any Debt of the Corporation which when
incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the
Corporation; (ii) any Debt of the Corporation to any of its Subsidiaries; (iii)
any Debt to any employee of the Corporation; (iv) Debentures or Other
Debentures, including Debentures sold by the Corporation to the Trust and (v)
any Debt which by its terms provides that it is not superior in right of payment
to the Debentures or to other Debt which is pari passu with, or subordinated to,
the Debentures.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries; (ii) any general
partnership, joint venture, trust or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries; and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
rendered by a law firm having a recognized tax and securities practice, to the
effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
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interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the Preferred Securities under the Trust Agreement, there is more
than an insubstantial risk that (i) the Trust is, or shall be within 90 days
after the date of such Opinion of Counsel, subject to United States federal
income tax with respect to income received or accrued on the Debentures; (ii)
interest payable by the Corporation on the Debentures is not, or within 90 days
after the date of such Opinion of Counsel, shall not be, deductible by the
Corporation, in whole or in part, for United States federal income tax purposes;
or (iii) the Trust is, or shall be within 90 days after the date of such Opinion
of Counsel, subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges. The Trust or the Corporation shall
request and receive such Opinion of Counsel with regard to such matters within a
reasonable period of time after the Trust or the Corporation shall have become
aware of the possible occurrence of any of the events described in clauses (i)
through (iii) above.
"Trust" means CBHI Capital Trust I, a Delaware statutory business trust
created by the Trust Agreement.
"Trust Agreement" means Amended and Restated Trust Agreement, dated March
7, 2001, of the Trust, as amended, modified or supplemented in accordance with
the applicable provisions thereof, among the trustees of the trust named
therein, the Corporation, as depositor, and the holders from time to time of
undivided beneficial ownership interests in the assets of the Trust, including
all exhibits thereto, including, for all purposes of the Trust Agreement, and
any such modification, amendment or supplement.
"Trustee" means Wilmington Trust Company, acting not in its individual
capacity but solely as trustee under this Indenture, and, subject to the
provisions of Article IX, shall also include its successors and assigns, and, if
at any time there is more than one Person acting in such capacity hereunder,
"Trustee" shall mean each such Person.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
subject to the provisions of Sections 11.1, 11.2, and 12.1 and any successor
statute thereto, in each case as amended from time to time.
"Trust Securities" means the Common Securities and Preferred Securities,
collectively.
"Voting Stock" as applied to stock of any Person, means shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person having ordinary voting power for the election of a majority of
the directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the
occurrence of a contingency.
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ARTICLE II.
ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION
AND EXCHANGE OF THE DEBENTURES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
There are hereby authorized Debentures designated the "variable rate
Interest Debentures due March 7, 2031," limited in aggregate principal amount to
not more than Three Million One Hundred Thousand Dollars ($3,100,000) which
amount shall be as set forth in any written order of the Corporation for the
authentication and delivery of Debentures pursuant to Section 2.5.
SECTION 2.2 MATURITY.
The Maturity Date shall be the Scheduled Maturity Date.
SECTION 2.3 FORM AND PAYMENT.
The Debentures shall be issued in certificated form without interest
coupons. Principal and interest on the Debentures issued in certificated form
shall be payable, the transfer of such Debentures shall be registrable and such
Debentures shall be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Trustee; provided, however, that
payment of interest may be made at the option of the Corporation by check mailed
to the holder at such address as shall appear in the Debenture Register or by
wire transfer to an account maintained by the holder as specified in the
Debenture Register, provided that the holder provides proper wire transfer
instructions by the Regular Record Date. Notwithstanding the foregoing, so long
as the holder of any Debentures is the Property Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Property Trustee shall be made
at such place and to such account as may be designated by the Property Trustee.
SECTION 2.4 INTEREST.
(a) Each Debenture shall bear interest at the Coupon Rate from the original
date of issuance until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
Coupon Rate, compounded quarterly, payable (subject to the provisions of Article
IV) quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date," commencing on March 31, 2001), to
the Person in whose name such Debenture or any Predecessor Debenture is
registered at the close of business on the Regular Record Date next preceding
such Interest Payment Date.
(b) The amount of interest payable for any period shall be computed on the
basis of a 360-day year of twelve 30-day months. Any change in the Coupon Rate
shall be effective on the date of such change for purposes of calculating
interest for any period. Except as provided in the
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following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, shall be computed on the
basis of the actual number of days elapsed in such period, based on a 360-day
year of twelve 30-day months. In the event that any date on which interest is
payable on the Debentures is not a Business Day, then payment of interest
payable on such date shall be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day (and
without any reduction of interest or any other payment in respect of any such
acceleration), in each case with the same force and effect as if made on the
date such payment was originally payable.
(c) If, at any time while the Property Trustee is the holder of any
Debentures, the Trust or the Property Trustee is required to pay any income or
other taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any case, the Corporation shall pay as additional interest
("Additional Interest") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges shall be equal to the amounts the
Trust and the Property Trustee would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
SECTION 2.4A DEFAULTED INTEREST.
Any interest on any Debenture that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date and (to the extent that
payment of such interest is enforceable) interest on any overdue installment of
interest at the Coupon Rate, compounded quarterly (herein called "Defaulted
Interest") shall, notwithstanding the provisions of Section 2.4(a), forthwith
cease to be payable to the holder on the relevant Regular Record Date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Corporation, at its election, as provided in clause (a) or clause (b) below:
(a) The Corporation may make payment of any Defaulted Interest on
Debentures to the Persons in whose names such Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Corporation shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such Debenture and the
date of the proposed payment, and at the same time the Corporation shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as herein provided. Thereupon the
Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 nor less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Corporation of such special record date and, in the name and at the expense
of the Corporation, shall cause notice of the proposed payment of such Defaulted
Interest and the
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special record date therefor to be mailed, first class postage prepaid, to each
Debentureholder at his or her address as it appears in the Debenture Register,
not less than 10 days prior to such special record date. Notice of the proposed
payment of such Defaulted Interest and the special record date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons
in whose names such Debentures (or their respective Predecessor Debentures) are
registered on such special record date and shall be no longer payable pursuant
to the following clause (b).
(b) The Corporation may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Debentures may be listed, and upon such
notice as may be required by such exchange if, after notice given by the
Corporation to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
SECTION 2.5 EXECUTION AND AUTHENTICATIONS.
(a) The Debenture(s) shall be signed on behalf of the Corporation by its
Chairman, President or one of its Vice Presidents, under its corporate seal
attested by its Secretary or one of its Assistant Secretaries. Signatures may be
in the form of a manual or facsimile signature. The Corporation may use the
facsimile signature of any Person who shall have been a Chairman, President or
Vice President thereof, or of any Person who shall have been a Secretary or
Assistant Secretary thereof, notwithstanding the fact that at the time the
Debentures shall be authenticated and delivered or disposed of such Person shall
have ceased to be the Chairman, President or a Vice President, or the Secretary
or an Assistant Secretary, of the Corporation (and any such signature shall be
binding on the Corporation). The seal of the Corporation may be in the form of a
facsimile of such seal and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures. The Debentures may contain such notations, legends
or endorsements as are required by law, stock exchange rule or usage. Each
Debenture shall be dated the date of its authentication by the Trustee.
(b) A Debenture shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
(c) At any time and from time to time after the execution and delivery of
this Indenture, the Corporation may deliver Debentures executed by the
Corporation to the Trustee for authentication, together with a written order of
the Corporation for the authentication and delivery of such Debentures signed by
its Chairman, President or any Vice President and its Secretary or any Assistant
Secretary, and the Trustee in accordance with such written order shall
authenticate and make available for delivery such Debentures.
(d) In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 9.1) shall be
fully protected in relying upon, an Opinion of Counsel stating
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that the form and terms thereof have been established in conformity with the
provisions of this Indenture.
(e) The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture shall affect the
Trustee's own rights, duties or immunities under the Debentures and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
SECTION 2.6 REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Debentures may be exchanged upon presentation thereof at the office or
agency of the Corporation designated for such purpose, for other Debentures in a
like aggregate principal amount, upon payment of a sum sufficient to cover any
tax or other governmental charge in relation thereto, all as provided in this
Section 2.6. In respect of any Debentures so surrendered for exchange, the
Corporation shall execute, the Trustee shall authenticate and such office or
agency shall deliver in exchange therefor the Debenture or Debentures that the
Debenture holder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.
(b) The Corporation shall keep, or cause to be kept, at its office or
agency designated for such purpose or such other location designated by the
Corporation a register or registers (herein referred to as the "Debenture
Register") in which, subject to such reasonable regulations as it may prescribe,
the Corporation shall register the Debentures and the transfers of Debentures as
in this Article II provided and which at all reasonable times shall be open for
inspection by the Trustee. The registrar for the purpose of registering
Debentures and transfer of Debentures as herein provided shall be appointed as
authorized by Board Resolution (the "Debenture Registrar"). Upon surrender for
transfer of any Debenture at the office or agency of the Corporation designated
for such purpose, the Corporation shall execute, the Trustee shall authenticate
and such office or agency shall make available for delivery in the name of the
transferee or transferees a new Debenture or Debentures for a like aggregate
principal amount. All Debentures presented or surrendered for exchange or
registration of transfer, as provided in this Section 2.6, shall be accompanied
(if so required by the Corporation or the Debenture Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Corporation
or the Debenture Registrar, duly executed by the registered holder or by such
holder's duly authorized attorney in writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial
redemption, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.7, Section 3.5(b) and Section 11.4 not involving any
transfer.
(d) The Corporation shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Debentures and ending at
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the close of business on the day of such mailing; nor (ii) to register the
transfer or exchange of any Debentures or portions thereof called for
redemption.
(e) Notwithstanding any other provision of this Indenture, transfers and
exchanges of Debentures, whether pursuant to this Article II, Section 3.5,
Article IX or otherwise, shall be made only in accordance with this Section 2.6.
SECTION 2.7 TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Corporation may
execute, and the Trustee shall authenticate and deliver, temporary Debentures
(printed, lithographed, or typewritten). Such temporary Debentures shall be
substantially in the form of the definitive Debentures in lieu of which they are
issued, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Corporation. Every
temporary Debenture shall be executed by the Corporation and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures. Without unnecessary delay the
Corporation shall execute and shall furnish definitive Debentures and thereupon
any or all temporary Debentures may be surrendered in exchange therefor (without
charge to the holders), at the office or agency of the Corporation designated
for such purpose, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Debentures an equal aggregate
principal amount of definitive Debentures, unless the Corporation advises the
Trustee to the effect that definitive Debentures need not be executed and
furnished until further notice from the Corporation. Until so exchanged, the
temporary Debentures shall be entitled to the same benefits under this Indenture
as definitive Debentures authenticated and delivered hereunder.
SECTION 2.8 MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.
(a) In case any temporary or definitive Debenture shall become mutilated or
be destroyed, lost or stolen, the Corporation (subject to the next succeeding
sentence) shall execute, and upon the Corporation's request the Trustee (subject
as aforesaid) shall authenticate and make available for delivery, a new
Debenture bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Debenture, or in lieu of and in substitution for
the Debenture so destroyed, lost or stolen. In every case the applicant for a
substituted Debenture shall furnish to the Corporation and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Corporation and the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the ownership
thereof. The Trustee may authenticate any such substituted Debenture and make
available for delivery the same upon the written request or authorization of any
officer of the Corporation. Upon the issuance of any substituted Debenture, the
Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Debenture that has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Corporation may, instead of
issuing a substitute Debenture, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for
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such payment shall furnish to the Corporation and the Trustee such security or
indemnity as they may require to save them harmless, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Corporation and
the Trustee of the destruction, loss or theft of such Debenture and of the
ownership thereof.
(b) Every replacement Debenture issued pursuant to the provisions of this
Section 2.8 shall constitute an additional contractual obligation of the
Corporation whether or not the mutilated, destroyed, lost or stolen Debenture
shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Debentures duly issued hereunder. All Debentures shall be held and
owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Debentures, and shall preclude (to the extent lawful) any and all other
rights or remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.9 CANCELLATION.
All Debentures surrendered for the purpose of payment, redemption, exchange
or registration of transfer shall, if surrendered to the Corporation or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be canceled by it, and no Debentures shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Corporation at the time of such surrender,
the Trustee shall deliver to the Corporation canceled Debentures held by the
Trustee. In the absence of such request the Trustee may dispose of canceled
Debentures in accordance with its standard procedures. If the Corporation shall
otherwise acquire any of the Debentures, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Debentures unless and until the same are delivered to the Trustee for
cancellation.
SECTION 2.10 BENEFIT OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or implied, shall
give or be construed to give to any Person, other than the parties hereto, the
holders of the Debentures and the holders of the Trust Securities as provided
herein (and, with respect to the provisions of Article XVI, the holders of
Senior Indebtedness) any legal or equitable right, remedy or claim under or in
respect of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions, and provisions being for the sole
benefit of the parties hereto, the holders of the Debentures and the holders of
the Trust Securities to the extent provided herein (and, with respect to the
provisions of Article XVI, the holders of Senior Indebtedness).
SECTION 2.11 AUTHENTICATING AGENT.
(a) So long as any of the Debentures remain Outstanding there may be an
Authenticating Agent for any or all such Debentures, which the Trustee shall
have the right to appoint. Said Authenticating Agent shall be authorized to act
on behalf of the Trustee to
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authenticate Debentures issued upon exchange, transfer or partial redemption
thereof, and Debentures so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. All references in this Indenture to the
authentication of Debentures by the Trustee shall be deemed to include
authentication by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Corporation and shall be a corporation that has a combined
capital and surplus, as most recently reported or determined by it, sufficient
under the laws of any jurisdiction under which it is organized or in which it is
doing business to conduct a trust business, and that is otherwise authorized
under such laws to conduct such business and is subject to supervision or
examination by federal or state authorities. If at any time any Authenticating
Agent shall cease to be eligible in accordance with these provisions, it shall
resign immediately.
(b) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Corporation. The Trustee may at
any time (and upon request by the Corporation shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Corporation. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Corporation. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
SECTION 2.12 RIGHT OF SET-OFF.
With respect to the Debentures initially issued to the Trust,
notwithstanding anything to the contrary herein, the Corporation shall have the
right to set-off any payment it is otherwise required to make in respect of any
such Debenture to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment under the Preferred
Securities Guarantee relating to such Debenture or to a holder of Preferred
Securities pursuant to an action undertaken under Section 7.8 of this Indenture.
SECTION 2.13 CUSIP NUMBERS.
The Corporation in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Debentureholders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission or such numbers. The Corporation will promptly
notify the Trustee of any change in the CUSIP numbers.
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ARTICLE III.
REDEMPTION OF DEBENTURES
SECTION 3.1 REDEMPTION.
Subject to the Corporation having received prior regulatory approval, if
then required under applicable capital guidelines or regulatory policies, the
Corporation may redeem the Debentures issued hereunder on and after the dates
set forth in and in accordance with the terms of this Article III.
SECTION 3.2 SPECIAL EVENT REDEMPTION.
Subject to the Corporation having received prior regulatory approval, if
then required under applicable capital guidelines or regulatory policies, if a
Special Event, as defined in Section 1.1 hereof, has occurred and is continuing,
then, notwithstanding Section 3.3, the Corporation shall have the right upon not
less than 30 days nor more than 60 days notice to the holders of the Debentures
to redeem the Debentures, in whole but not in part, for cash within 90 days
following the occurrence of such Special Event (the "90-Day Period") at a
redemption price equal to 100% of the principal amount to be redeemed plus any
accrued and unpaid interest thereon (including Compounded Interest, interest on
past due interest pursuant to ss. 2.4(a) of this Indenture, and Additional
Interest, if any) to the date of such redemption (the "Redemption Price"),
provided that if such Special Event is a Tax Event and at the time there is
available to the Corporation the opportunity to eliminate, within the 90-Day
Period, such Tax Event by taking some ministerial action (a "Ministerial
Action"), such as filing a form or making an election, or pursuing some other
similar reasonable measure which has no adverse effect on the Corporation, the
Trust or the holders of the Trust Securities, the Corporation shall pursue such
Ministerial Action in lieu of redemption, and, provided further, that the
Corporation shall have no right to redeem the Debentures while the Trust is
pursuing any Ministerial Action pursuant to its obligations under the Trust
Agreement. The Redemption Price shall be paid prior to 12:00 noon, Greensboro,
North Carolina time, on the date of such redemption or such earlier time as the
Corporation determines, provided that the Corporation shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m.,
Greensboro, North Carolina time, on the date such Redemption Price is to be
paid.
SECTION 3.3 OPTIONAL REDEMPTION BY CORPORATION.
(a) Except as otherwise may be specified in this Indenture but not in
limitation of Section 3.2, the Corporation shall have the right to redeem the
Debentures, in whole or in part, from time to time, on or after March 31, 2004,
at a Redemption Price equal to 100% of the principal amount to be redeemed plus
any accrued and unpaid interest thereon to the date of such redemption. Any
redemption pursuant to this Section 3.3 shall be (i) made in multiples of $1,000
and (ii) made upon not less than 30 days nor more than 60 days notice to the
holder of the Debentures, at the Redemption Price. If the Debentures are only
partially redeemed pursuant to this Section 3.3, the Debentures shall be
redeemed pro rata or by lot or in such other manner as the Trustee shall deem
appropriate and fair in its discretion. The Redemption Price shall be paid prior
to 12:00 noon, Greensboro, North Carolina time, on the date of such redemption
or at such
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earlier time as the Corporation determines provided that the Corporation shall
deposit with the Trustee an amount sufficient to pay the Redemption Price by
10:00 a.m., Greensboro, North Carolina time, on the date such Redemption Price
is to be paid.
SECTION 3.4 NOTICE OF REDEMPTION.
(a) In case the Corporation shall desire to exercise such right to redeem
all or a portion of the Debentures in accordance with the right reserved so to
do, the Corporation shall, or shall cause the Trustee to, upon receipt of 45
days written notice from the Corporation, give notice of such redemption to
holders of the Debentures to be redeemed by mailing, first class postage
prepaid, a notice of such redemption not less than 30 days and not more than 60
days before the date fixed for redemption to such holders at their last
addresses as they shall appear upon the Debenture Register unless a shorter
period is specified in the Debentures to be redeemed. Any notice that is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the registered holder receives the notice. In any case,
failure to duly give such notice to the holder of any Debenture designated for
redemption in whole or in part, or any defect in the notice, shall not affect
the validity of the proceedings for the redemption of any other Debentures. In
the case of any redemption of Debentures prior to the expiration of any
restriction on such redemption provided in the terms of such Debentures or
elsewhere in this Indenture, the Corporation shall furnish the Trustee with an
Officers' Certificate evidencing compliance with any such restriction. Each such
notice of redemption shall identify the Debenture to be redeemed (including
CUSIP numbers, if any) and shall specify the date fixed for redemption and the
Redemption Price and shall state that payment of the Redemption Price shall be
made at the office or agency of the Corporation or at the Corporate Trust
Office, upon presentation and surrender of such Debentures, that interest
accrued to the date fixed for redemption shall be paid as specified in said
notice and that from and after said date interest shall cease to accrue. If less
than all the Debentures are to be redeemed, the notice to the holders of the
Debentures shall specify the particular Debentures to be redeemed. If any
Debenture is to be redeemed in part only, the notice shall state the portion of
the principal amount thereof to be redeemed (which shall be $1,000 or a multiple
thereof) and shall state that on and after the redemption date, upon surrender
of such Debenture, a new Debenture or Debentures in principal amount equal to
the unredeemed portion thereof shall be issued.
(b) If less than all the Debentures are to be redeemed, the Corporation
shall give the Trustee at least 45 days notice in advance of the date fixed for
redemption as to the aggregate principal amount of Debentures to be redeemed,
and thereupon the Trustee shall select, in such manner as it shall deem
appropriate and fair in its discretion, the portion or portions of the
Debentures to be redeemed and shall thereafter promptly notify the Corporation
in writing of the numbers of the Debentures to be redeemed, in whole or in part.
The Corporation may, if and whenever it shall so elect pursuant to the terms
hereof, by delivery of instructions signed on its behalf by its Chairman,
President or any Vice President, instruct the Trustee or any paying agent to
call all or any part of the Debentures for redemption and to give notice of
redemption in the manner set forth in this Section 3.4, such notice to be in the
name of the Corporation or its own name as the Trustee or such paying agent may
deem advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Corporation shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
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case may be, such Debenture Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section 3.4.
SECTION 3.5 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed as
above provided, subject to the provisions of Section 3.2 the Debentures or
portions of Debentures to be redeemed specified in such notice shall become due
and payable on the date and at the place stated in such notice at the applicable
Redemption Price, and interest on such Debentures or portions of Debentures
shall cease to accrue on and after the date fixed for redemption, unless the
Corporation shall default in the payment of such Redemption Price with respect
to any such Debenture or portion thereof. On presentation and surrender of such
Debentures on or after the date fixed for redemption at the place of payment
specified in the notice, said Debentures shall be paid and redeemed at the
Redemption Price (but if the date fixed for redemption is an Interest Payment
Date, the interest installment payable on such date shall not be part of the
Redemption Price and shall be payable instead to the registered holder at the
close of business on the Regular Record Date next preceding the next succeeding
Interest Payment Date).
(b) Subject to the provisions of Article II, upon presentation of any
Debenture that is to be redeemed in part only, the Corporation shall execute and
the Trustee shall authenticate and the office or agency where the Debenture is
presented shall make available for delivery to the holder thereof, at the
expense of the Corporation, a new Debenture of authorized denomination in
principal amount equal to the unredeemed portion of the Debenture so presented.
SECTION 3.6 NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD.
So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right, at any time and from time to time during the
term of the Debentures, to defer payments of interest (other than Additional
Interest) by extending the interest payment period of such Debentures for a
period not exceeding 20 consecutive quarters (the "Extended Interest Payment
Period"), during which Extended Interest Payment Period no interest (other than
Additional Interest) shall be due and payable; provided that no Extended
Interest Payment Period may extend beyond the Maturity Date. Interest, which has
been deferred because of the extension of the interest payment period pursuant
to this Section 4.1, shall bear interest thereon at the Coupon Rate, compounded
quarterly during the Extended Interest Payment Period (the "Compounded
Interest"). At the end of the Extended Interest Payment Period, the Corporation
shall calculate (and deliver such calculation to the Trustee) and pay all
interest accrued and unpaid on the
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Debentures, including any Additional Interest and Compounded Interest in respect
of such period (together, "Deferred Interest") that shall be payable to the
holders of the Debentures in whose names the Debentures are registered in the
Debenture Register as of the close of business on the Regular Record Date
immediately preceding the end of the Extended Interest Payment Period. Before
the termination of any Extended Interest Payment Period, subject to the
foregoing requirements, the Corporation may further extend such period, provided
that such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters or extend beyond the Maturity Date of the
Debentures. The foregoing notwithstanding, any Extended Interest Payment Period
shall automatically expire upon the occurrence of an Event of Default. Upon the
termination of any Extended Interest Payment Period and upon the payment of all
Deferred Interest then due, the Corporation may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof, but the Corporation may prepay at any time all or any portion of the
interest accrued during an Extended Interest Payment Period, which prepayments
shall be payable to the holders of the Debentures in whose names the Debentures
are registered in the Debenture Register as of the close of business on the
Regular Record Date immediately preceding the date of prepayment.
SECTION 4.2 NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of the Debentures
at the time the Corporation selects an Extended Interest Payment Period, the
Corporation shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period at least one Business Day before the earlier of (i) the next
succeeding date on which Distributions (as such term is defined in the Trust
Agreement) on the Trust Securities issued by the Trust are payable; or (ii) the
date the Trust is required to give notice of the record date or the date such
Distributions are payable to the holders of the Preferred Securities issued by
the Trust, but in any event at least one Business Day before such record date.
(b) If the Property Trustee is not the only holder of the Debentures at the
time the Corporation selects an Extended Interest Payment Period, the
Corporation shall give the holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least one
Business Day before the earlier of (i) the next succeeding Interest Payment
Date; or (ii) the date the Corporation is required to give notice of the record
or payment date of such interest payment to holders of the Debentures, but in
any event at least one Business Day before such record date.
(c) The quarter in which any notice is given pursuant to paragraphs (a) or
(b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in
the Minimum Extended Interest Payment Period permitted under Section 4.1.
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SECTION 4.3 LIMITATION ON TRANSACTIONS.
If (i) there shall have occurred any event that would constitute an Event
of Default; (ii) the Corporation shall be in default with respect to its payment
of any obligations under the Preferred Securities Guarantee relating to the
Trust; or (iii) the Corporation shall have given notice of its election to defer
payments of interest on such Debentures by extending the interest payment period
as provided in this Indenture and such period, or any extension thereof, shall
be continuing, then (a) the Corporation will not and will not permit any
Subsidiary to declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Corporation's capital stock (other than (1) the reclassification of any class of
the Corporation's capital stock into another class of its capital stock; (2)
dividends or distributions payable in any class of the Corporation's common
stock, (3) any declaration of a dividend in connection with the implementation
of a shareholder rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(4) payments under the Preferred Securities Guarantee and (5) purchases of the
Corporation's common stock related to the rights under any of the Corporation's
stock benefit plans for its or its Subsidiaries' directors, officers or
employees); (b) the Corporation will not and will not permit any Subsidiary to
make any payment of interest, principal or premium, if any, or repay, repurchase
or redeem any debt securities issued by the Corporation (including Other
Debentures) which rank pari passu with or junior to the Debentures; or make any
guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any Subsidiary of the Corporation if such guarantee ranks pari
passu with or is junior to the Debentures; provided, however, that
notwithstanding the foregoing the Corporation may make payments pursuant to its
obligations under the Preferred Securities Guarantee; and (c) the Corporation
shall not redeem, purchase or acquire less than all of the outstanding
Debentures or any of the Preferred Securities.
ARTICLE V.
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 5.1 PAYMENT OF PRINCIPAL AND INTEREST.
The Corporation shall duly and punctually pay or cause to be paid the
principal of and interest on the Debentures at the time and place and in the
manner provided herein.
SECTION 5.2 MAINTENANCE OF AGENCY.
So long as any of the Debentures remain Outstanding, the Corporation shall
maintain an office or agency where (i) Debentures may be presented for payment;
(ii) Debentures may be presented as hereinabove authorized for registration of
transfer and exchange; and (iii) notice and demands to or upon the Corporation
in respect of the Debentures and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the
Corporation shall, by written notice signed by its Chairman, President or a Vice
President and delivered to the Trustee, designate some other office or agency
for such purposes or any of them. If at any time the Corporation shall fail to
maintain any such required office or agency or shall
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fail to furnish the Trustee with the address thereof, such presentations,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Corporation hereby appoints the Trustee as its agent to receive
all such presentations, notices and demands. In addition to any such office or
agency, the Corporation may from time to time designate one or more offices or
agencies where the Debentures may be presented for registration or transfer and
for exchange in the manner provided herein, and the Corporation may from time to
time rescind such designation as the Corporation may deem desirable or
expedient; provided, however, that no such designation or rescission shall in
any manner relieve the Corporation of its obligation to maintain any such office
or agency in the Place of Payment for such purposes. The Corporation shall give
the Trustee prompt written notice of any such designation or rescission thereof.
SECTION 5.3 PAYING AGENTS.
(a) If the Corporation shall appoint one or more paying agents for the
Debentures, other than the Trustee, the Corporation shall cause each such paying
agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 5.3:
(i) that it shall hold all sums held by it as such agent for the payment of
the principal of or interest on the Debentures (whether such sums have been paid
to it by the Corporation or by any other obligor of such Debentures) in trust
for the benefit of the Persons entitled thereto;
(ii) that it shall give the Trustee prompt written notice of any failure by
the Corporation (or by any other obligor of such Debentures) to make any payment
of the principal of or interest on the Debentures when the same shall be due and
payable;
(iii) that it shall, at any time during the continuance of any failure
referred to in the preceding paragraph (a)(ii) above, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
paying agent; and
(iv) that it shall perform all other duties of paying agent as set forth in
this Indenture.
(b) If the Corporation shall act as its own paying agent with respect to
the Debentures, it shall on or before each due date of the principal of or
interest on such Debentures, set aside, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay such principal
or interest so becoming due on Debentures until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of such action, or any failure (by it or any other obligor on such
Debentures) to take such action. Whenever the Corporation shall have one or more
paying agents for the Debentures, it shall, prior to each due date of the
principal of or interest on any Debentures, deposit with the paying agent a sum
sufficient to pay the principal or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal or interest,
and (unless such paying agent is the Trustee) the Corporation shall promptly
notify the Trustee of this action or failure so to act.
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(c) Notwithstanding anything in this Section 5.3 to the contrary, (i) the
agreement to hold sums in trust as provided in this Section 5.3 is subject to
the provisions of Section 13.3 and 13.4; and (ii) the Corporation may at any
time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or direct any paying agent to pay, to
the Trustee all sums held in trust by the Corporation or such paying agent, such
sums to be held by the Trustee upon the same terms and conditions as those upon
which such sums were held by the Corporation or such paying agent; and, upon
such payment by any paying agent to the Trustee, such paying agent shall be
released from all further liability with respect to such money.
SECTION 5.4 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Corporation, whenever necessary to avoid or fill a vacancy in the
office of Trustee, shall appoint, in the manner provided in Section 9.11, a
Trustee that meets the requirements of Section 9.10, so that there shall at all
times be a Trustee hereunder.
SECTION 5.5 COMPLIANCE WITH CONSOLIDATION PROVISIONS.
The Corporation shall not, while any of the Debentures remain outstanding,
consolidate with, or merge into, or merge into itself, or convert into a
different type of entity, or convey, transfer or lease all or substantially all
of its property and assets to any other entity and no entity shall consolidate
with or merge into the Corporation or convey, transfer or lease substantially
all of its properties and assets to the Corporation, unless the provisions of
Article XII hereof are complied with.
SECTION 5.6 LIMITATION ON TRANSACTIONS.
If Debentures are issued to the Trust or a trustee of the Trust in
connection with the issuance of Trust Securities by the Trust and (i) there
shall have occurred any event that would constitute an Event of Default; (ii)
the Corporation shall be in default with respect to its payment of any
obligations under the Preferred Securities Guarantee relating to the Trust; or
(iii) the Corporation shall have given notice of its election to defer payments
of interest on such Debentures by extending the interest payment period as
provided in this Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Corporation will not and will not permit any Subsidiary
to declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
Corporation's capital stock (other than (1) the reclassification of any class of
the Corporation's capital stock into another class of capital stock, (2)
dividends or distributions payable in any class of the Corporation's common
stock, (3) any declaration of a dividend in connection with the implementation
of a shareholder rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(4) payments under the Preferred Securities Guarantee and (5) purchases of the
Corporation's common stock related to the rights under any of the Corporation's
stock benefit plans for its or its Subsidiaries' directors, officers or
employees); (b) the Corporation will not and will not permit any Subsidiary to
make any payment of interest, principal or premium, if any, or repay, repurchase
or redeem any debt securities issued by the Corporation (including Other
Debentures) which rank pari passu with or junior to the Debentures; or make any
guarantee payments with respect to any
24
guarantee by the Corporation of the debt securities of any Subsidiary of the
Corporation if such guarantee ranks pari passu with or junior to the Debentures;
provided, however, that, notwithstanding the foregoing the Corporation may make
payments pursuant to its obligations under the Preferred Securities Guarantee;
and (c) the Corporation shall not redeem, purchase or acquire less than all of
the outstanding Debentures or any of the Preferred Securities.
SECTION 5.7 COVENANTS AS TO THE TRUST.
For so long as such Trust Securities of the Trust remain outstanding, the
Corporation shall (i) maintain 100% direct or indirect ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Corporation under this Indenture may succeed to the Corporation's ownership of
the Common Securities; (ii) not voluntarily dissolve, wind up or liquidate the
Trust, except upon prior regulatory approval if then so required under
applicable capital guidelines or regulatory policies, and use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with a distribution of Debentures, the redemption of all of the Trust Securities
of the Trust or certain mergers, consolidations or amalgamations, each as
permitted by the Trust Agreement; and (b) to otherwise continue not to be
treated as an association taxable as a corporation or partnership for United
States federal income tax purposes; and (iii) use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an individual
beneficial interest in the Debentures.
SECTION 5.8 COVENANTS AS TO PURCHASES.
Prior to March 31, 2004, the Corporation shall not purchase any Debentures,
in whole or in part, from the Trust, except as otherwise permitted by Section
3.2.
SECTION 5.9 RESERVE FOR INTEREST PAYMENTS.
For so long as the Debentures remain outstanding, the Corporation will not:
(i) declare or pay cash dividends on, or purchase, redeem or acquire for value
any shares of the capital stock of the Corporation, (ii) return any capital to
holders of the capital stock of the Corporation, or (iii) make any distribution
of assets to holders of the capital stock of the Corporation, unless the
Corporation retains cash, cash equivalents or marketable securities (as
determined in accordance with Generally Accepted Accounting Principles) in an
amount sufficient to pay the next succeeding eight consecutive quarterly
interest payments on the Debentures.
ARTICLE VI.
DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE CORPORATION AND THE TRUSTEE
SECTION 6.1 CORPORATION TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
DEBENTUREHOLDERS.
The Corporation shall furnish or cause to be furnished to the Trustee a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of the Debentures
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as of each January 1 and June 30 of each year and at such other times as the
Trustee may request in writing within 30 days after receipt by the Corporation;
provided that the Corporation shall not be obligated to furnish or cause to
furnish such list at any time that the list shall not differ in any respect from
the most recent list furnished to the Trustee by the Corporation; provided,
however, that, in either case, no such list need be furnished if the Trustee
shall be the Debenture Registrar, or if the Trust is the sole Debentureholder.
SECTION 6.2 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH DEBENTUREHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 6.1 and as to the names and addresses of holders of Debentures received
by the Trustee in its capacity as registrar for the Debentures (if acting in
such capacity) or in any other capacity in respect of the Debentures.
(b) The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
SECTION 6.3 REPORTS BY THE CORPORATION.
(a) The Corporation covenants and agrees to file with the Trustee, within
15 days after the Corporation is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Corporation may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Corporation is not required to file information,
documents or reports pursuant to either of such Sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 of the Exchange Act.
(b) The Corporation covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Corporation with the conditions and covenants
provided for in this Indenture as may be required from time to time by such
rules and regulations.
(c) The Corporation covenants and agrees to transmit to the
Debentureholders, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Corporation pursuant to subsections (a) and (b) of this Section 6.3
as may be required by rules and regulations prescribed from time to time by the
Commission.
(d) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive
26
notice of any information contained therein or determinable from information
contained therein, including the Corporation's compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 6.4 REPORTS BY THE TRUSTEE.
(a) The Trustee shall transmit to Debentureholders, if any, such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to Section 313 of the Trust Indenture Act, if applicable, at the times
and in the manner provided pursuant thereto. If required by Section 313(a) of
the Trust Indenture Act, the Trustee shall, within sixty days after each May 15
following the date of this Indenture deliver to Debentureholders a brief report,
dated as of such May 15, which complies with the provisions of such Section
313(a).
(b) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with each stock exchange, if any, upon
which the Debentures are listed, with the Commission and with the Corporation.
The Corporation will promptly notify the Trustee when any Debentures become
listed on any stock exchange.
SECTION 6.5 STATEMENTS AS TO DEFAULT.
(a) The Corporation will deliver to the Trustee annually, within 120 days
after the end of each of its fiscal years, a certificate, from its principal
executive officer, principal financial officer or principal accounting officer,
stating whether or not to the best knowledge of the signer thereof the
Corporation is in compliance (without regard to periods of grace or notice
requirements) with all conditions and covenants under this Indenture, and if the
Corporation shall not be in compliance, specifying such non-compliance and the
nature and status thereof of which such signer may have knowledge.
(b) The Corporation shall deliver to the Trustee, as soon as possible and
in any event within five days after the Corporation becomes aware of the
occurrence of any Event of Default or an event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or Default and the action
which the Corporation proposes to take with respect thereto.
ARTICLE VII.
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
(a) Whenever used herein with respect to the Debentures,
"Event of Default" means any one or more of the following events that has
occurred and is continuing:
(i) the Corporation defaults in the payment of any installment of
interest (including Additional Interest, Compounded Interest or interest on past
due interest pursuant to (S)
27
2.4, if any) upon any of the Debentures, as and when the same shall become due
and payable, and continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period by the Corporation
in accordance with the terms of Article IV of this Indenture shall not
constitute a default in the payment of interest for this purpose;
(ii) the Corporation defaults in the payment of the principal on
the Debentures as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise;
(iii) the Corporation fails to observe or perform any other of its
covenants or agreements with respect to the Debentures for a period of 90 days
after the earlier of (A) the date on which written notice of such failure,
requiring the same to be remedied and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Corporation by the Trustee, by
registered or certified mail, or to the Corporation and the Trustee by the
holders of at least 25% in aggregate principal amount of the Debentures at the
time Outstanding or (B) the date by which the Corporation is required to provide
an Officer's Certificate as to such Default pursuant to Section 6.5(b);
(iv) the Corporation pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry of an
order for relief against it in an involuntary case; (iii) consents to the
appointment of a Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit of its creditors;
(v) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Corporation in an involuntary
case; (ii) appoints a Custodian of the Corporation for all or substantially all
of its property; or (iii) orders the liquidation of the Corporation, and the
order or decree remains unstayed and in effect for 60 days;
(vi) the Trust shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence except in connection
with (i) the distribution of Debentures to holders of Trust Securities in
liquidation of their interests in the Trust; (ii) the redemption of all of the
outstanding Trust Securities of the Trust; or (iii) certain mergers,
consolidations or amalgamations, each as permitted by the Trust Agreement;
(vii) the Corporation defaults on any Senior Indebtedness and the
holder of such Senior Indebtedness either demands payment of any portion thereof
prior to its stated maturity and/or takes action to foreclose, sell or otherwise
realize on any property securing such Senior Indebtedness; or
(viii) the Corporation defaults under the Assignment of Life
Insurance as Collateral made to Peoples Bancorp of North Carolina, Inc. and such
default is not cured within ten (10) days after the Corporation receives notice
of default from Peoples Bancorp of North Carolina, Inc. or its successor or
assign.
28
(b) In each and every such case, unless the principal of all the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debentures
then Outstanding hereunder, by notice in writing to the Corporation (and to the
Trustee if given by such Debentureholders) may declare the principal of all the
Debentures to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, notwithstanding
anything contained in this Indenture or in the Debentures.
(c) At any time after the principal of the Debentures shall have been so
declared due and payable, and before any judgment or decree for the payment of
the monies due shall have been obtained or entered as hereinafter provided, the
holders of a majority in aggregate principal amount of the Debentures then
Outstanding hereunder, by written notice to the Corporation and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Corporation
has paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including Additional Interest, Compounded Interest and
interest on past due interest pursuant to Section 2.4, if any) upon all the
Debentures and the principal of any and all Debentures that shall have become
due otherwise than by acceleration (and, without duplication of any of the
foregoing, interest upon such principal, and upon overdue installments of
interest, at the rate per annum expressed in the Debentures to the date of such
payment or deposit) and the amount payable to the Trustee under Section 9.7; and
(ii) any and all Events of Default under this Indenture, other than the
nonpayment of principal on Debentures that shall not have become due by their
terms, shall have been remedied or waived as provided in Section 7.6. No such
rescission and annulment shall extend to or shall affect any subsequent default
or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and in
every such case the Corporation and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Corporation and the Trustee shall continue as though no such
proceedings had been taken.
SECTION 7.2 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
(a) The Corporation covenants that (1) in case it shall default in the
payment of any installment of interest (including Additional Interest and
Compounded Interest) on any of the Debentures, and such default shall have
continued for a period of 90 Business Days; or (2) in case it shall default in
the payment of the principal of any of the Debentures when the same shall have
become due and payable, whether upon maturity of the Debentures or upon
redemption or upon declaration or otherwise, then, upon demand of the Trustee,
the Corporation shall pay to the Trustee, for the benefit of the holders of the
Debentures, the whole amount that then shall have been become due and payable on
all such Debentures for principal or interest, or both, as the case may be, with
interest upon the overdue principal and (if the Debentures are held by the Trust
or a trustee of the Trust, without duplication of any other amounts paid by the
Trust or
29
trustee in respect thereof) upon overdue installments of interest at the rate
per annum expressed in the Debentures; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection, and
the amount payable to the Trustee and its counsel under Section 9.7.
(b) If the Corporation shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Corporation or other obligor upon the
Debentures and collect the monies adjudged or decreed to be payable in the
manner provided by law out of the property of the Corporation or other obligor
upon the Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Corporation or the creditors or property of either, the Trustee
shall have power to intervene in such proceedings and take any action therein
that may be permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the holders of the Debentures allowed for the entire amount due
and payable by the Corporation under this Indenture at the date of institution
of such proceedings and for any additional amount that may become due and
payable by the Corporation after such date, and to collect and receive any
monies or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee and
its counsel under Section 9.7; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the holders of the
Debentures to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to such
Debentureholders, to pay to the Trustee any amount due it under Section 9.7.
(d) All rights of action and of asserting claims under this Indenture, or
under any of the terms established with respect to Debentures, may be enforced
by the Trustee without the possession of any of such Debentures, or the
production thereof at any trial or other proceeding relating thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 9.7, be
for the ratable benefit of the holders of the Debentures. In case of an Event of
Default hereunder, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law. Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement, adjustment or
composition affecting
30
the Debentures or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Debentureholder in any such proceeding.
SECTION 7.3 APPLICATION OF MONIES COLLECTED.
Any monies or other assets collected by the Trustee pursuant to this
Article VII with respect to the Debentures shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such monies or other assets on account of principal or interest,
upon presentation of the Debentures, and notation thereon of the payment, if
only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 9.7;
SECOND: To the payment of all Senior Indebtedness of the Corporation if
and to the tent required by Article XVI; and
THIRD: To the payment of the amounts then due and unpaid upon the
Debentures for principal and interest, in respect of which or for the benefit of
which such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Debentures for
principal and interest, respectively.
FOURTH: Any remaining balance to the Corporation.
SECTION 7.4 LIMITATION ON SUITS.
(a) No holder of any Debenture shall have any right by virtue or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Debentures specifying such Event of Default, as hereinbefore
provided; (ii) the holders of not less than 25% in aggregate principal amount of
the Debentures then Outstanding shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as trustee
hereunder; (iii) such holder or holders shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; (iv) the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
failed to institute any such action, suit or proceeding; and (v) during such 60
day period, the holders of the Debentures do not give the Trustee a direction
inconsistent with the request.
(b) Notwithstanding anything contained herein to the contrary or any
other provisions of this Indenture, the right of any holder of the Debentures to
receive payment of the principal of and interest on the Debentures, as therein
provided, on or after the respective due dates expressed in such Debenture (or
in the case of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates (or redemption
date), shall
31
not be impaired or affected without the consent of such holder and by accepting
a Debenture hereunder it is expressly understood, intended and covenanted by the
taker and holder of every Debenture with every other such taker and holder and
the Trustee, that no one or more holders of Debentures shall have any right in
any manner whatsoever by virtue or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of the holders of any other
of such Debentures, or to obtain or seek to obtain priority over or preference
to any other such holder, or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and common benefit of
all holders of Debentures. For the protection and enforcement of the provisions
of this Section 7.4, each and every Debentureholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 7.5 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER.
(a) All powers and remedies given by this Article VII to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to the
Trustee or the holders of the Debentures, by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements
contained in this Indenture or otherwise established with respect to such
Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 7.4, every power and remedy
given by this Article VII or by law to the Trustee or the Debentureholders may
be exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Debentureholders.
SECTION 7.6 CONTROL BY DEBENTUREHOLDERS.
The holders of a majority in aggregate principal amount of the Debentures
at the time Outstanding, determined in accordance with Section 10.4, shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee; provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture. Subject to the provisions of
Section 9.1, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures at the time Outstanding affected thereby,
determined in accordance with Section 10.4, may on behalf of the holders of all
of the Debentures waive any past default in the performance of any of the
covenants contained herein and its consequences, except (i) a default in the
payment of the principal of or interest on, any of the Debentures as and when
the same shall become due by the terms of such Debentures otherwise than by
acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal, other than principal maturing
because of the acceleration, has been deposited with the Trustee (in accordance
with Section 7.1(c)); (ii) a
32
default in the covenants contained in Section 4.3; or (iii) in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of the holder of each Outstanding Debenture affected; provided, however,
that if the Debentures are held by the Trust or a trustee of the Trust, such
waiver or modification to such waiver shall not be effective until the holders
of a majority in liquidation preference of Preferred Securities of the Trust
shall have consented to such waiver or modification to such waiver; provided
further, that if the consent of the holder of each Outstanding Debenture is
required, such waiver shall not be effective until each holder of the Preferred
Securities of the Trust shall have consented to such waiver. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Corporation, the Trustee and the holders of the
Debentures shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default
or impair any right consequent thereon.
SECTION 7.7 UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any Debentures
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 7.7 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 25% in aggregate principal amount of any
Outstanding Debentures, or to any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of or interest on the Debentures, on
or after the respective due dates expressed in such Debenture or established
pursuant to this Indenture.
SECTION 7.8 DIRECT ACTION BY HOLDERS OF PREFERRED SECURITIES.
Notwithstanding the provisions of ss. 2.10 of this Indenture, any
registered holder of the Preferred Securities issued by the Trust shall have the
right, upon the occurrence of an Event of Default described in Section 7.1(a)(i)
or 7.1(a)(ii), to institute a suit directly against the Corporation for
enforcement of payment to such holder of principal of and (subject to Sections
2.4 and 4.1) interest (including any Additional Interest, Compounded Interest,
and interest on past due interest pursuant to ss. 2.4, if any) on the Debentures
having a principal amount equal to the aggregate Liquidation Amount (as defined
in the Trust Agreement) of such Preferred Securities held by such holder. The
Corporation may not amend this Indenture to remove this right to institute a
suit directly against the Corporation without the prior written consent of the
holders of all the Preferred Securities.
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ARTICLE VIII.
FORM OF DEBENTURE AND ORIGINAL ISSUE
SECTION 8.1 FORM OF DEBENTURE.
The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A
attached hereto and incorporated herein by reference.
SECTION 8.2 ORIGINAL ISSUE OF DEBENTURES.
Debentures in the aggregate principal amount of up to Three Million One
Hundred Thousand Dollars $3,100,000 may, upon execution of this Indenture, be
executed by the Corporation and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and make available for delivery said
Debentures upon the written order of the Corporation, signed by its Chairman,
its President, or any Vice President and its Treasurer, an Assistant Treasurer,
its Secretary or Assistant Secretary without any further action by the
Corporation.
ARTICLE IX.
CONCERNING THE TRUSTEE
SECTION 9.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform with respect to the Debentures such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
shall be read into this Indenture against the Trustee. In case an Event of
Default has occurred that has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred:
(i) the duties and obligations of the Trustee shall, with respect to
the Debentures, be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable with respect to the Debentures
except for the performance of such duties and obligations as are
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specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Indenture conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of the
Debentures at the time outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Indenture with respect
to the Debentures; and
(4) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 9.2 NOTICE OF DEFAULTS.
The Trustee shall transmit by mail to all holders of the Debentures in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, notice of any Default hereunder, within 90 days after the occurrence
thereof; provided, however, that, except in the case of any default in the
payment of the principal or interest (including Additional Interest, Compounded
Interest, and interest on past due interest, if any) on any Debenture, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of the
directors and/or Responsible Officers of the Trustee determines in good faith
that the withholding of such notice is in the interests of the holders of such
Debentures.
SECTION 9.3 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 9.1 or elsewhere in this
Indenture:
(a) The Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
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consent, order, approval, bond, security or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties;
(b) Any request, direction, order or demand of the Corporation mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Corporation by the Chairman, President or any Vice
President and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer thereof (unless other evidence in respect thereof is
specifically prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a Default or an
Event of Default, other than an Event of Default specified in Section 7.1(a)(i)
or (ii), unless and until a responsible officer of the Trustee has actual
knowledge of such Default or Event of Default or it receives notification of
such Default or Event of Default from the Corporation or by holders of at least
25% of the aggregate principal amount of the Debentures at the time Outstanding
or of at least 25% of the liquidation preference of Trust Securities;
(d) The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted hereunder in good faith and in reliance thereon;
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders, pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (that has not been cured or waived) to exercise with respect to the
Debentures such of the rights and powers vested in it by this Indenture, and to
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs;
(f) The Trustee shall not be liable for any action taken or omitted to be
taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, but the Trustee in its discretion may make such
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Corporation,
personally or by agent or attorney; and
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
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SECTION 9.4 TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.
(a) The Recitals contained herein and in the Debentures, except the
certificates of authentication, shall be taken as the statements of the
Corporation, and the Trustee assumes no responsibility for the correctness of
the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by
the Corporation of any of the Debentures or of the proceeds of such Debentures,
or for the use or application of any monies paid over by the Trustee in
accordance with any provision of this Indenture, or for the use or application
of any monies received by any paying agent other than the Trustee.
SECTION 9.5 MAY HOLD DEBENTURES.
The Trustee or any paying agent or registrar for the Debentures, in its
individual or any other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 9.9 and 9.14, may otherwise deal with the Corporation
with the same rights it would have if it were not Trustee, paying agent or
Debenture Registrar.
SECTION 9.6 MONIES HELD IN TRUST.
Subject to the provisions of Section 13.5, all monies received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any monies received by it hereunder except such as it
may agree in writing with the Corporation to pay thereon.
SECTION 9.7 COMPENSATION AND REIMBURSEMENT.
The Corporation agrees:
(1) to pay to the Trustee from time to time such compensation as the
Corporation and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustees upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture (including the compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith; and
37
(3) to the fullest extent permitted by law, to indemnify each Trustee or
any predecessor Trustee and their agents for, and to hold them harmless against,
any and all loss, damage, claims, actions, suits, liability or expense,
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) of any nature whatsoever, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent that such loss, damage, claim, liability
or expense is due to its own negligence or bad faith.
The Trustee shall have a lien prior to the Debentures as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 9.7, except with respect to funds held in trust
for the benefit of the holders of particular Debentures. When the Trustee incurs
expenses or renders services in connection with an Event of Default specified in
Section 7.1(a)(iv), Section 7.1(a)(v) or 7.1(a)(vi), the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture and the resignation or removal of the Trustee.
SECTION 9.8 RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in Section 9.1, whenever in the administration
of the provisions of this Indenture the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering or
omitting to take any action hereunder, then, solely for purposes of determining
whether the Trustee is in breach of its obligations, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established for the purposes of such administration by
an Officers' Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
SECTION 9.9 DISQUALIFICATION: CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Corporation shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act; provided, however, that for purposes of the first
proviso contained in Section 310 (b) of the Trust Indenture Act, the Trust
Agreement and Preferred Securities Guarantee shall be deemed to be specifically
described in this Indenture.
SECTION 9.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee with respect to the Debentures issued
hereunder which shall at all times be a corporation organized and doing business
under the laws of the United
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States of America or any State or Territory thereof or of the District of
Columbia or a corporation or other Person permitted to act as trustee by the
Commission, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by federal, state, territorial, or District of
Columbia authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 9.10, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. The Corporation may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Corporation, serve
as Trustee. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 9.10, the Trustee shall resign
immediately in the manner and with the effect specified in Section 9.11.
SECTION 9.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any time
resign by giving written notice thereof to the Corporation and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. Upon receiving such notice of resignation, the Corporation shall
promptly appoint a successor trustee with respect to Debentures by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition at the expense of the
Corporation any court of competent jurisdiction for the appointment of a
successor trustee with respect to Debentures, or any Debentureholder who has
been a bona fide holder of a Debenture or Debentures for at least six months
may, subject to the provisions of Section 9.9, on behalf of himself and all
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon after such notice, if any, as it may
deem proper, appoint a successor trustee.
(b) In case at any time any one of the following shall occur,
(i) the Trustee shall fail to comply with the provisions of Section
9.9 after written request therefor by the Corporation or by any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at least six
months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 9.10 and shall fail to resign after written request
therefor by the Corporation or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or commence a voluntary bankruptcy proceeding,
or a receiver of the Trustee or of its property shall be appointed or consented
to, or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Corporation may remove the Trustee with
respect to all Debentures and appoint a successor trustee by written instrument,
in duplicate, executed by
39
order of the Board of Directors, one copy of which instrument shall be delivered
to the Trustee so removed and one copy to the successor trustee, or, subject to
the provisions of Section 9.9, unless the Trustee's duty to resign is stayed as
provided herein, any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months may, on behalf of that holder
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee by so
notifying the Trustee and the Corporation and may appoint a successor Trustee
with the consent of the Corporation. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after such notification,
the Trustee may petition at the expense of the Corporation any court of
competent jurisdiction for the appointment of a successor trustee with respect
to Debentures, or any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months may, subject to the provisions
of Section 9.9, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
appoint a successor trustee.
(d) No resignation or removal of the Trustee and no appointment of a
successor trustee with respect to the Debentures pursuant to any of the
provisions of this Section 9.11 shall become effective until acceptance of
appointment by the successor trustee as provided in Section 9.12.
SECTION 9.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor trustee with
respect to the Debentures, every successor trustee so appointed shall execute,
acknowledge and deliver to the Corporation and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Corporation or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) Upon request of any successor trustee, the Corporation shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, powers and trusts referred to in
paragraph (a) of this Section 9.12.
(c) No successor trustee shall accept its appointment unless at the time
of such acceptance such successor trustee shall be qualified and eligible under
this Article IX.
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(d) Upon acceptance of appointment by a successor trustee as provided in
this Section 9.12, the Corporation shall transmit notice of the succession of
such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Corporation fails to transmit such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Corporation.
SECTION 9.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that
such corporation shall be qualified under the provisions of Section 9.9 and
eligible under the provisions of Section 9.10, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. In case any Debentures shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Debentures so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Debentures.
SECTION 9.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE CORPORATION.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE X.
CONCERNING THE DEBENTUREHOLDERS
SECTION 10.1 EVIDENCE OF ACTION BY HOLDERS.
(a) Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Debentures
may take any action (including the making of any demand or request, the giving
of any notice, consent or waiver or the taking of any other action), the fact
that at the time of taking any such action the holders of such majority or
specified percentage have joined therein may be evidenced by any instrument or
any number of instruments of similar tenor executed by such holders of
Debentures in Person or by agent or proxy appointed in writing.
(b) If the Corporation shall solicit from the Debentureholders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Corporation may, at its
41
option, as evidenced by an Officers' Certificate, fix in advance a record date
for the determination of Debentureholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Corporation shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
action may be given before or after the record date, but only the
Debentureholders of record at the close of business on the record date shall be
computed to be Debentureholders for the purposes of determining whether
Debentureholders of the requisite proportion of Outstanding Debentures have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Debentures shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Debentureholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
SECTION 10.2 PROOF OF EXECUTION BY DEBENTUREHOLDERS.
Subject to the provisions of Section 9.1, proof of the execution of any
instrument by a Debentureholder (such proof shall not require notarization) or
his agent or proxy and proof of the holding by any Person of any of the
Debentures shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture Register
of such Debentures or by a certificate of the Debenture Registrar thereof.
(c) The Trustee may require such additional proof of any matter referred
to in this Section 10.2 as it shall deem necessary.
SECTION 10.3 WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of any Debenture,
the Corporation, the Trustee, any paying agent, any Authenticating Agent and any
Debenture Registrar may deem and treat the Person in whose name such Debenture
shall be registered upon the books of the Corporation as the absolute owner of
such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of and interest on such Debenture (subject to Section
2.3) and for all other purposes; and neither the Corporation nor the Trustee nor
any paying agent nor any Authenticating Agent nor any Debenture Registrar shall
be affected by any notice to the contrary.
SECTION 10.4 CERTAIN DEBENTURES OWNED BY CORPORATION DISREGARDED.
In determining whether the holders of the requisite aggregate principal
amount of Debentures have concurred in any direction, consent or waiver under
this Indenture, the
42
Debentures that are owned by the Corporation or any other obligor on the
Debentures or by any Person directly or indirectly controlling or controlled by,
or under common control with, the Corporation or any other obligor on the
Debentures shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination, except that for the purpose of determining whether
the Trustee shall be protected in relying on any such direction, consent or
waiver, only Debentures that a Responsible Officer of the Trustee actually knows
are so owned shall be so disregarded. The Debentures so owned that have been
pledged in good faith may be regarded as Outstanding for the purposes of this
Section 10.4, if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right so to act with respect to such Debentures and that the
pledgee is not a Person directly or indirectly, controlling or controlled by, or
under direct or indirect common control with, the Corporation or any such other
obligor. In case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee.
SECTION 10.5 ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.1, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures specified
in this Indenture in connection with such action, any holder of a Debenture that
is shown by the evidence to be included in the Debentures the holders of which
have consented to such action may, by filing written notice with the Trustee,
and upon proof of holding as provided in Section 10.2, revoke such action so far
as concerns such Debenture. Except as aforesaid any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Debentures specified in this
Indenture in connection with such action shall be conclusively binding upon the
Corporation, the Trustee and the holders of all the Debentures.
ARTICLE XI.
SUPPLEMENTAL INDENTURES
SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF DEBENTUREHOLDERS.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Corporation and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto without the consent of
the Debentureholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein or in the
Debentures;
(b) to comply with Article XII;
43
(c) to provide for uncertificated Debentures in addition to or in place
of certificated Debentures;
(d) to add to the covenants of the Corporation for the benefit of the
holders of all or any of the Debentures or to surrender any right or power
herein conferred upon the Corporation;
(e) to evidence the succession of another corporation to the Corporation,
and the assumption by any such successor of the covenants of the Corporation
herein and in the Debentures contained;
(f) to convey, transfer, assign, mortgage or pledge to or with the
Trustee any property or assets which the Corporation may desire to convey,
transfer, assign, mortgage or pledge;
(g) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Debentures, as herein set forth, unless such
addition, deletion, or revision shall adversely affect the rights of any
Debentureholder in any material respect;
(h) to make any change that does not adversely affect the rights of any
Debentureholder in any material respect; or
(i) to provide for the issuance of and establish the form and terms and
conditions of the Debentures, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or of the
Debentures, or to add to the rights of the holders of the Debentures.
The Trustee is hereby authorized to join with the Corporation in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise. Any supplemental indenture authorized by the provisions
of this Section 11.1 may be executed by the Corporation and the Trustee without
the consent of the holders of any of the Debentures at the time Outstanding,
notwithstanding any of the provisions of Section 11.2. The foregoing
notwithstanding, during any time the Debentures are held by the Trust or a
trustee of the Trust and the Trust's Preferred Securities are then held by five
or fewer Persons, any and all supplemental indentures otherwise permitted by
this Section 11.1 shall not become effective except with the prior written
consent of the Holders of a majority in liquidation preference of such Preferred
Securities.
SECTION 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.
With the consent (evidenced as provided in Section 10.1) of the holders of
not less than a majority in aggregate principal amount of the Debentures at the
time Outstanding, the Corporation, when authorized by Board Resolutions, and the
Trustee may from time to time and
44
at any time enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner not covered by Section 11.1 the rights of the holders of
the Debentures under this Indenture; provided, however, that no such
supplemental indenture shall without the consent of the holders of each
Debenture then Outstanding and affected thereby, (i) extend the fixed maturity
of any Debentures, reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon (other than the Corporation's
right to defer interest pursuant to this Indenture), without the consent of the
holder of each Debenture so affected; or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture; provided further, that if the Debentures are held by the
Trust or a trustee of the Trust, such supplemental indenture shall not be
effective until the holders of a majority in liquidation preference of Trust
Securities of the Trust shall have consented in writing to such supplemental
indenture; provided further, that if the consent of the holder of each
Outstanding Debenture is required, such supplemental indenture shall not be
effective until each holder of the Trust Securities of the Trust shall have
consented in writing to such supplemental indenture. It shall not be necessary
for the consent of the Debentureholders affected thereby under this Section 11.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.
SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article XI, this Indenture shall be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Corporation and the holders of Debentures shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 11.4 DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.
Debentures affected by a supplemental indenture that are authenticated and
delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article XI may bear a notation in form approved by the
Corporation, as to any matter provided for in such supplemental indenture. If
the Corporation shall so determine, new Debentures so modified as to conform, in
the opinion of the Board of Directors of the Corporation, to any modification of
this Indenture contained in any such supplemental indenture may be prepared by
the Corporation, authenticated by the Trustee and delivered in exchange for the
Debentures then Outstanding.
SECTION 11.5 EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) Upon the request of the Corporation, accompanied by Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders required
to consent thereto as aforesaid, the Trustee shall join with the Corporation in
the execution of such supplemental indenture
45
unless such supplemental indenture adversely affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion but shall not be obligated to enter into such
supplemental indenture. The Trustee, subject to the provisions of Section 9.1,
may receive an Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Article XI is authorized or permitted by,
and conforms to, the terms of this Article XI and that it is proper for the
Trustee under the provisions of this Article XI to join in the execution
thereof.
(b) Promptly after the execution by the Corporation and the Trustee of
any supplemental indenture pursuant to the provisions of this Section 11.5, the
Trustee shall transmit by mail, first class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders as their names and addresses appear upon the Debenture
Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE XII.
SUCCESSOR CORPORATION
SECTION 12.1 CORPORATION MAY CONSOLIDATE, ETC.
Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation, conversion or merger of the Corporation with or into
any other corporation or corporations (whether or not affiliated with the
Corporation, as the case may be), or successive consolidations, conversions or
mergers in which the Corporation, as the case may be, or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Corporation, as the case
may be, or its successor or successors as an entirety, or substantially as an
entirety, to any other corporation (whether or not affiliated with the
Corporation, as the case may be, or its successor or successors) authorized to
acquire and operate the same; provided, however, the Corporation hereby
covenants and agrees that, (i) upon any such consolidation, conversion, merger,
sale, conveyance, transfer or other disposition, the due and punctual payment,
in the case of the Corporation, of the principal of and interest on all of the
Debentures, according to their tenor and the due and punctual performance and
observance of all the covenants and conditions of this Indenture and the
Debentures to be kept or performed by the Corporation as the case may be, shall
be expressly assumed, by supplemental indenture (which shall conform to the
provisions of the Trust Indenture Act, as then in effect) satisfactory in form
to the Trustee executed and delivered to the Trustee by the entity formed by
such consolidation, or into which the Corporation, as the case may be, shall
have been merged or converted, or by the entity which shall have acquired such
property; (ii) in case the Corporation consolidates with, merges into or
converts to another Person or conveys or transfers its properties and assets
substantially then as an entirety to any Person, the successor Person is
organized under the laws of the United States or any state or the District of
Columbia; and (iii) immediately after giving effect thereto, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing.
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SECTION 12.2 SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, conversion, merger, sale,
conveyance, transfer or other disposition and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of, in the case of the
Corporation, the due and punctual payment of the principal of and interest on
all of the Debentures Outstanding and the due and punctual performance of all of
the covenants and conditions of this Indenture and the Debentures to be
performed by the Corporation, as the case may be, such successor corporation
shall succeed to and be substituted for the Corporation, with the same effect as
if it had been named as the Corporation herein, and thereupon the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Debentures.
(b) In case of any such consolidation, conversion, merger, sale,
conveyance, transfer or other disposition such changes in phraseology and form
(but not in substance) may be made in the Debentures thereafter to be issued as
may be appropriate.
(c) Nothing contained in this Indenture or in any of the Debentures
shall prevent the Corporation from merging into itself or acquiring by purchase
or otherwise all or any part of the property of any other Person (whether or not
affiliated with the Corporation).
SECTION 12.3 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of Section 9.1, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation,
conversion, merger, sale, conveyance, transfer or other disposition, and any
such assumption, comply with the provisions of this Article XII.
ARTICLE XIII.
SATISFACTION AND DISCHARGE
SECTION 13.1 SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Corporation shall have delivered to the Trustee
for cancellation all Debentures theretofore authenticated (other than any
Debentures that shall have been destroyed, lost or stolen and that shall have
been replaced or paid as provided in Section 2.8 and Debentures for whose
payment money or Governmental Obligations have theretofore been deposited in
trust or segregated and held in trust by the Corporation (and thereupon repaid
to the Corporation or retained by Corporation and discharged from such trust, as
provided in Section 13.5)); or (b) all such Debentures not theretofore delivered
to the Trustee for cancellation shall have become due and payable, or are by
their terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Corporation shall deposit or cause
to be deposited with the Trustee as trust funds the entire amount in monies or
Governmental Obligations, or a combination thereof, sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in
written certification thereof delivered to the Trustee, to pay at maturity
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or upon redemption all Debentures not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such date
of maturity or date fixed for redemption, as the case may be, and if the
Corporation shall also pay or cause to be paid all other sums payable hereunder
by the Corporation; then this Indenture shall thereupon cease to be of further
effect except for the provisions of Sections 2.2, 2.3, 2.4, 2.6, 2.8, 5.1, 5.2,
5.3 and 9.10, that shall survive until the date of maturity or redemption date,
as the case may be, and Sections 9.7 and 13.5, that shall survive to such date
and thereafter, and the Trustee, on demand of the Corporation and at the cost
and expense of the Corporation, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.
SECTION 13.2 DISCHARGE OF OBLIGATIONS.
If at any time all Debentures not heretofore delivered to the Trustee
for cancellation or that have not become due and payable as described in Section
13.1 shall have been paid by the Corporation by depositing irrevocably with the
Trustee as trust funds monies or an amount of Governmental Obligations
sufficient to pay at maturity or upon redemption all Debentures not theretofore
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity or date fixed for redemption, as the
case may be, and if the Corporation shall also pay or cause to be paid all other
sums payable hereunder by the Corporation, then after the date such monies or
Governmental Obligations, as the case may be, are deposited with the Trustee,
the obligations of the Corporation under this Indenture shall cease to be of
further effect except for the provisions of Sections 2.2, 2.3, 2.4, 2.6, 2.8,
5.1, 5.2, 5.3, 9.7, 9.10 and 13.5 hereof that shall survive until such
Debentures shall mature and be paid. Thereafter, Sections 9.7 and 13.5 shall
survive.
SECTION 13.3 DEPOSITED MONIES TO BE HELD IN TRUST.
All monies or Governmental Obligations deposited with the Trustee
pursuant to Sections 13.1 or 13.2 shall be held in trust and shall be available
for payment as due, either directly or through any paying agent (including the
Corporation acting as its own paying agent), to the holders of the Debentures
for the payment or redemption of which such Monies or Governmental Obligations
have been deposited with the Trustee.
The Corporation shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 13.1 or the principal and interest received in
respect thereof, other than any such tax, fee or other charge which by law is
for the account of the holders of Outstanding Debentures.
SECTION 13.4 PAYMENT OF MONIES HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this Indenture,
all monies or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Corporation, be paid to
the Trustee and thereupon such paying agent shall be released from all further
liability with respect to such monies or Governmental Obligations.
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SECTION 13.5 REPAYMENT TO CORPORATION.
Any monies or Governmental Obligations deposited with any paying agent or
the Trustee, or then held by the Corporation in trust, for payment of principal
of or interest on the Debentures that are not applied but remain unclaimed by
the holders of such Debentures for at least two years after the date upon which
the principal of or interest on such Debentures shall have respectively become
due and payable, shall be repaid to the Corporation or retained by Corporation,
as the case may be, on May 31 of each year and shall be discharged from such
trust; and thereupon the paying agent and the Trustee shall be released from all
further liability with respect to such monies or Governmental Obligations and
the holder of any of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Corporation for
the payment thereof.
ARTICLE XIV.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.1 NO RECOURSE.
(a) No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of the Debentures, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Corporation or of any predecessor or successor corporation, either directly or
through the Corporation or any such predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Corporation or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obliga1tions, covenants or agreements contained in
this Indenture or in any of the Debentures or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Debentures.
(b) No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of the Debentures, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Trustee or of any predecessor or successor corporation, either directly or
through the Trustee or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly
49
understood that the Indenture obligations of the Trustee are solely corporate
obligations of the Trustee, and that no such personal liability whatever shall
attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Trustee or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debentures or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture by the Trustee.
ARTICLE XV.
MISCELLANEOUS PROVISIONS
SECTION 15.1 EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Corporation shall bind its respective
successors and assigns, whether so expressed or not.
SECTION 15.2 ACTIONS BY SUCCESSOR.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Corporation shall and may be done and performed with like force and effect by
the corresponding board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Corporation.
SECTION 15.3 SURRENDER OF CORPORATION POWERS.
The Corporation by instrument in writing executed by appropriate authority
of its Board of Directors and delivered to the Trustee may surrender any of the
powers reserved to the Corporation, and thereupon such power so surrendered
shall terminate both as to the Corporation, as the case may be, and as to any
successor corporation.
SECTION 15.4 NOTICES.
Except as otherwise expressly provided herein any notice or demand that by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Debentures to or on the Corporation may be
given or served by being deposited first class postage prepaid in a post-office
letter box addressed (until another address is filed in writing by the
Corporation with the Trustee), as follows: Carolina Bank Holdings, Inc.,
Attention: Chief Executive Officer, 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx
Xxxxxxxx, 00000. Any notice, election, request or demand by the Corporation or
any Debentureholder to or upon the Trustee
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shall be deemed to have been sufficiently given or made, for all purposes, if
given or made in writing at the Corporate Trust Office of the Trustee.
SECTION 15.5 GOVERNING LAW.
This Indenture and each Debenture shall be deemed to be a contract made
under the laws of the State of North Carolina and for all purposes shall be
construed in accordance with the laws of said State without regard to conflicts
of law principles.
SECTION 15.6 TREATMENT OF DEBENTURES AS DEBT.
It is intended that the Debentures shall be treated as indebtedness and not
as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.
SECTION 15.7 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application, request or demand by the Corporation to the
Trustee to take any action under any of the provisions of this Indenture,
including but not limited to actions which relate to the authentication and
delivery of the Debentures and to the satisfaction and discharge of the
Indenture, the Corporation shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action (including any covenants compliance with which constitutes a
condition precedent) have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with.
(b) Each certificate or opinion of the Corporation provided for in this
Indenture with respect to compliance with a condition or covenant in this
Indenture (other than the certificates provided for in Section 6.3(d)) shall
include (1) a statement that the Person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of such Person, he has made such examination or investigation as, in the
opinion of such Person, is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
SECTION 15.8 PAYMENTS ON BUSINESS DAYS.
In any case where the date of maturity of interest or principal of any
Debenture or the date of redemption of any Debenture shall not be a Business
Day, then payment of interest or principal may (subject to Section 2.4) be made
on the next succeeding Business Day with the same force and effect as if made on
the nominal date of maturity or redemption, and no interest shall accrue for the
period after such nominal date.
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SECTION 15.9 TRUST INDENTURE ACT: CONFLICTS WITH TRUST INDENTURE ACT
(a) This Indenture is not subject to the provisions of the Trust Indenture
Act pursuant to the exemption provided in sections 304(a)(9) and 304(b) of such
act. However, notwithstanding the foregoing, the parties hereto agree to be
governed by the provisions of the Trust Indenture Act as they apply to the
rights and obligations of the parties.
(b) If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties that are agreed, under Section 15.9(a),
to be imposed by Sections 310 through 317 inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 15.10 COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 15.11 SEVERABILITY.
In case any one or more of the provisions contained in this Indenture or in
the Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Debentures,
but this Indenture and the Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 15.12 ASSIGNMENT.
The Corporation shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Corporation, provided that, in the event of any
such assignment, the Corporation shall remain liable for all such obligations.
Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties hereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto.
SECTION 15.13 ACKNOWLEDGMENT OF RIGHTS.
The provisions of Section 2.10 of this Indenture notwithstanding, the
Corporation acknowledges and agrees that, with respect to any Debentures held by
the Trust or a trustee of the Trust, if the Property Trustee fails to enforce
its rights under this Indenture as the holder of the Debentures held as the
assets of the Trust, any holder of Preferred Securities may institute legal
proceedings directly against the Corporation to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any
52
other person or entity. Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Corporation to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on the
redemption date), the Corporation acknowledges and agrees that a holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such holder. This Section 15.13 may not be amended without the
prior written consent of the holders of all the Preferred Securities.
SECTION 15.14 ADDITIONAL PROVISIONS FOR THE PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the Debentures to the
Trust and in connection with the sale of the Trust Securities by the Trust, the
Corporation, in its capacity as borrower with respect to the Debentures, and not
in limitation of the provisions contained in the "Expense Agreement" (as such
term is defined in the Trust Agreement) or the other provisions contained
herein, agrees to pay the following:
(a) All debts and other obligations (other than with respect to the
Preferred Securities) of the Trust and all costs and expenses of the Trust
(including costs and expenses relating to the organization of the Trust, the
fees and expenses of the Property Trustee and the other costs and expenses
relating to the operation of the Trust); and
Any and all taxes and all costs and expenses with respect thereto (other than
United States withholding taxes) to which the Trust might become subject.
The foregoing obligations of the Corporation are for the benefit of, and shall
be enforceable by, any person to whom such debts, obligations, costs, expenses
and liabilities are owed (a "Creditor") whether or not such Creditor has
received notice thereof. Not in limitation of the provisions of the Expense
Agreement, any such Creditor may enforce such obligations of the Corporation
directly against the Corporation, and the Corporation irrevocably waives any
right or remedy to require that any such Creditor take any action against the
Trust or any other person before proceeding against the Corporation. The
Corporation also agrees to execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing.
ARTICLE XVI.
SUBORDINATION OF DEBENTURES
SECTION 16.1 AGREEMENT TO SUBORDINATE.
The Corporation covenants and agrees, and each holder of Debentures issued
hereunder by such holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
XVI; and each holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Corporation of the principal of and interest on
all
53
Debentures issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to the prior payment
in full of all Senior Debt and Subordinated Debt (collectively, "Senior
Indebtedness") to the extent provided herein, whether outstanding at the date of
this Indenture or thereafter incurred. No provision of this Article XVI shall
prevent the occurrence of any default or Event of Default hereunder.
SECTION 16.2 DEFAULT ON SENIOR DEBT OR SUBORDINATED DEBT.
In the event and during the continuation of any default by the Corporation
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Corporation, or in the event that the maturity of any
Senior Indebtedness of the Corporation has been accelerated because of a
default, then, in either case, no payment shall be made by the Corporation with
respect to the principal (including redemption payments) of or interest on the
Debentures. In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the preceding
sentence of this Section 16.2, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Corporation or the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.
SECTION 16.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment by the Corporation or distribution of assets of the
Corporation of any kind or character, whether in cash, property or securities,
to creditors upon any liquidation, dissolution or winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Corporation, all amounts due upon all
Senior Indebtedness of the Corporation shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Corporation on account of the principal or interest on the
Debentures; and upon any such liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors, marshaling of assets,
any payment by the Corporation, or distribution of assets of the Corporation of
any kind or character, whether in cash, property or securities, to which the
holders of the Debentures or the Trustee would be entitled to receive from the
Corporation, except for the provisions of this Article XVI, shall be paid by the
Corporation or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the holders of
the Debentures or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness of the Corporation (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness held
by such holders, as calculated by the Corporation) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent
54
necessary to pay such Senior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the holders of Debentures or to the Trustee.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Corporation of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Indebtedness of the Corporation is paid in full,
or provision is made for such payment in money in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Corporation, for application to the payment of all Senior Indebtedness of
the Corporation, as the case may be, remaining unpaid to the extent necessary to
pay such Senior Indebtedness in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
benefit of the holders of such Senior Indebtedness.
(c) For purposes of this Article XVI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Corporation as
reorganized or readjusted, or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
XVI with respect to the Debentures to the payment of all Senior Indebtedness of
the Corporation, as the case may be, that may at the time be outstanding,
provided that (i) such Senior Indebtedness is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment; and (ii) the rights
of the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Corporation with, or the merger of the Corporation into, another corporation
or the liquidation or dissolution of the Corporation following the conveyance or
transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XII
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 16.3 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article XII. Nothing in Section 16.2 or in this Section 16.3 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
9.7.
SECTION 16.4 SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness of the
Corporation, the rights of the holders of the Debentures shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Corporation, as the case
may be, applicable to such Senior Indebtedness until the principal of and
interest on the Debentures shall be paid in full; and for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article XVI, and no payment over pursuant to the provisions of this Article
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XVI to or for the benefit of the holders of such Senior Indebtedness by holders
of the Debentures or the Trustee, shall, as between the Corporation, its
creditors other than holders of Senior Indebtedness of the Corporation, and the
holders of the Debentures, be deemed to be a payment by the Corporation to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XVI are and are intended solely for the purposes of defining the
relative rights of the holders of the Debentures, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
(b) Nothing contained in this Article XVI or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Corporation,
its creditors (other than the holders of Senior Indebtedness of the
Corporation), and the holders of the Debentures, the obligation of the
Corporation, which is absolute and unconditional, to pay to the holders of the
Debentures the principal of and interest on the Debentures as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the holders of the Debentures and
creditors of the Corporation, as the case may be, other than the holders of
Senior Indebtedness of the Corporation, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XVI of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Corporation, as
the case may be, received upon the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Corporation referred
to in this Article XVI, the Trustee, subject to the provisions of Article IX,
and the holders of the Debentures shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Corporation, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XVI.
SECTION 16.5 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each holder of Debentures by such holder's acceptance thereof authorizes
and directs the Trustee on such holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XVI and appoints the Trustee such holder's attorney-in-fact for any and
all such purposes.
SECTION 16.6 NOTICE BY THE CORPORATION.
(a) The Corporation shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Corporation that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XVI. Notwithstanding the
provisions of this Article XVI or any other provisions of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
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would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Article XVI, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Corporation or a holder or holders of Senior
Indebtedness or from any trustee therefor, and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 9.1, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 16.6 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Debenture), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any notice
to the contrary that may be received by it within two Business Days prior to
such date.
(b) The Trustee, subject to the provisions of Section 9.1, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the
Corporation (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or a trustee on
behalf of any such holder or holders. In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XVI, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XVI, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 16.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
(a) The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XVI in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. The Trustee's right to compensation and reimbursement
of expenses as set forth in Section 9.7 shall not be subject to the
subordination provisions of this Article XVI.
(b) With respect to the holders of Senior Indebtedness of the Corporation,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVI, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to have any fiduciary duty to the holders of such Senior Indebtedness
and, subject to the provisions of Section 9.1, the Trustee shall not be liable
to any holder of such Senior Indebtedness if it shall in good faith mistakenly
pay over or deliver to holders of Debentures, the Corporation or any other
Person money or assets to which any holder of such Senior Indebtedness shall be
entitled by virtue of this Article XVI or
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otherwise.
SECTION 16.8 SUBORDINATION MAY NOT BE IMPAIRED.
(a) No right of any present or future holder of any Senior Indebtedness of
the Corporation to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Corporation or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Corporation with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
(b) Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Corporation may, at any time and from
time to time, without the consent of or notice to the Trustee or the holders of
the Debentures, without incurring responsibility to the holders of the
Debentures and without impairing or releasing the subordination provided in this
Article XVI or the obligations hereunder of the holders of the Debentures to the
holders of such Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in
any manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable in
any manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Corporation and any other Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed all as of the day and year first above written.
CAROLINA BANK HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------
Title: President
---------------------------
WILMINGTON TRUST COMPANY, AS TRUSTEE
By: /s/ Xxxxxx X. XxxXxxxxx
-------------------------------
Name: Xxxxxx X. XxxXxxxxx
----------------------------
Title: Vice President
---------------------------
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