EXHIBIT 4.13
AMENDED AND RESTATED
TRUST AGREEMENT
OF
MFH FINANCIAL TRUST [ __ ]
DATED AS OF [ __ ]
TABLE OF CONTENTS
PAGE
ARTICLE I INTERPRETATION AND DEFINITIONS............................................................ 1
Section 1.1 Definitions.......................................................................... 1
ARTICLE II TRUST INDENTURE ACT....................................................................... 7
Section 2.1 Trust Indenture Act; Application..................................................... 7
Section 2.2 Lists of Holders of Securities....................................................... 7
Section 2.3 Reports by the Institutional Trustee................................................. 8
Section 2.4 Periodic Reports to Institutional Trustee............................................ 8
Section 2.5 Evidence of Compliance with Conditions Precedent..................................... 9
Section 2.6 Events of Default; Waiver............................................................ 9
Section 2.7 Event of Default; Notice............................................................. 11
ARTICLE III ORGANIZATION.............................................................................. 11
Section 3.1 Name................................................................................. 11
Section 3.2 Office............................................................................... 11
Section 3.3 Purposes............................................................................. 11
Section 3.4 Authority............................................................................ 12
Section 3.5 Title to Property of the Trust....................................................... 12
Section 3.6 Powers and Duties of the Regular Trustees............................................ 12
Section 3.7 Prohibition of Actions by the Trust and the Trustees................................. 14
Section 3.8 Powers and Duties of the Institutional Trustee....................................... 15
Section 3.9 Certain Duties and Responsibilities of the Institutional Trustee..................... 17
Section 3.10 Certain Rights of the Institutional Trustee.......................................... 19
Section 3.11 Delaware Trustee..................................................................... 20
Section 3.12 Execution of Documents............................................................... 21
Section 3.13 Not Responsible for Recitals or Issuance of Securities............................... 21
Section 3.14 Duration of Trust.................................................................... 21
Section 3.15 Mergers.............................................................................. 21
ARTICLE IV SPONSOR................................................................................... 22
Section 4.1 Sponsor's Purchase of Common Securities.............................................. 22
Section 4.2 Responsibilities of the Sponsor...................................................... 23
Section 4.3 Right to Proceed..................................................................... 23
Section 4.4 Expenses............................................................................. 23
ARTICLE V TRUSTEES.................................................................................. 24
Section 5.1 Number of Trustees................................................................... 24
Section 5.2 Delaware Trustee..................................................................... 24
Section 5.3 Institutional Trustee; Eligibility................................................... 25
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 5.4 Certain Qualifications of the Regular Trustees and the Delaware Trustee Generally.... 25
Section 5.5 Regular Trustees..................................................................... 26
Section 5.6 Appointment, Removal and Resignation of Trustees..................................... 26
Section 5.7 Vacancies among Trustees............................................................. 27
Section 5.8 Effect of Vacancies.................................................................. 28
Section 5.9 Meetings............................................................................. 28
Section 5.10 Delegation of Power.................................................................. 28
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.......................... 28
ARTICLE VI DISTRIBUTIONS............................................................................. 29
Section 6.1 Distributions........................................................................ 29
ARTICLE VII ISSUANCE OF SECURITIES.................................................................... 29
Section 7.1 General Provisions Regarding Securities.............................................. 29
Section 7.2 Paying Agent......................................................................... 30
ARTICLE VIII DISSOLUTION OF TRUST...................................................................... 31
Section 8.1 Dissolution of Trust................................................................. 31
ARTICLE IX TRANSFER OF INTERESTS..................................................................... 31
Section 9.1 Transfer of Securities............................................................... 31
Section 9.2 Transfer of Certificates............................................................. 32
Section 9.3 Deemed Security Holders.............................................................. 33
Section 9.4 Book-Entry Interests................................................................. 33
Section 9.5 Notices to Depository Institution.................................................... 34
Section 9.6 Appointment of Successor Depository Institution...................................... 34
Section 9.7 Definitive Preferred Security Certificates........................................... 34
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.................................... 35
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS...................... 36
Section 10.1 Liability............................................................................ 36
Section 10.2 Exculpation.......................................................................... 36
Section 10.3 Fiduciary Duty....................................................................... 36
Section 10.4 Indemnification...................................................................... 37
Section 10.5 Outside Businesses................................................................... 39
Section 10.6 Compensation; Fees................................................................... 40
ARTICLE XI ACCOUNTING................................................................................ 40
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 11.1 Fiscal Year.......................................................................... 40
Section 11.2 Certain Accounting Matters........................................................... 40
Section 11.3 Banking.............................................................................. 41
Section 11.4 Withholding.......................................................................... 41
ARTICLE XII AMENDMENTS AND MEETINGS................................................................... 41
Section 12.1 Amendments........................................................................... 41
Section 12.2 Meetings of the Holders of Securities; Action by Written Consent..................... 43
ARTICLE XIII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE............................. 44
Section 13.1 Representations and Warranties of Institutional Trustee.............................. 44
Section 13.2 Representations and Warranties of Delaware Trustee................................... 45
ARTICLE XIV MISCELLANEOUS............................................................................. 45
Section 14.1 Notices.............................................................................. 45
Section 14.2 Governing Law........................................................................ 47
Section 14.3 Intention of the Parties............................................................. 47
Section 14.4 Headings............................................................................. 47
Section 14.5 Successors and Assigns............................................................... 47
Section 14.6 Partial Enforceability............................................................... 47
Section 14.7 Counterparts......................................................................... 47
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CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
------------------- -----------
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
311(a) and (b) 5.3(c)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 2.5
314(f) Inapplicable
315(a) 3.9(b)
315(b) 2.7(a)
315(c) 3.9(a)
315(d) 3.9(b)
316(a) and (b) 2.6 and Annex I (Sections 5 and 6)
316(c) 3.6(e)
317(a) 3.8(c)
317(b) 3.8(h)
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED
TRUST AGREEMENT
OF
MFH FINANCIAL TRUST [ _ ]
THIS AMENDED AND RESTATED TRUST AGREEMENT ("DECLARATION") is dated and
effective as of [ _ ] by the Trustees (as defined herein), the Sponsor (as
defined herein), the Debenture [Issuer AND Guarantor] (as defined herein) and by
the holders, from time to time, of undivided beneficial interests in the Trust
to be issued pursuant to this Declaration.
WHEREAS, the Trustees (or their predecessors) and the Sponsor
established MFH Financial Trust [ _ ] (the "TRUST"), a statutory trust under the
Statutory Trust Act (as defined herein), pursuant to an Trust Agreement, dated
as of July 23, 2003 (the "ORIGINAL DECLARATION"), and a Certificate of Trust
filed with the Secretary of State of the State of Delaware (the "SECRETARY OF
State") on July 23, 2003, as amended to date (the "TRUST AGREEMENT") for the
sole purpose of issuing and selling certain Securities (as defined herein)
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Debentures (as defined herein) of the
Debenture Issuer [(as defined herein)]; and
WHEREAS, as of the date hereof, no Securities have been issued; and
WHEREAS, all of the Trustees, the Debenture [Issuer AND Guarantor] and
the Sponsor, by this Declaration, hereby amend and restate each and every term
and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act and that
this Declaration constitutes the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the Holders (as defined herein), subject to the
provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections, Annexes
and Exhibits are to Articles and Sections of, and Annexes and Exhibits to, this
Declaration;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"ADDITIONAL INTEREST" has the meaning set forth in Section 2(d) of
Annex I.
"AFFILIATE" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"AGENT" means any Paying Agent.
"AUTHORIZED OFFICER" of a Person means any executive officer,
president, vice-president, assistant vice-president, treasurer, assistant
treasurer, secretary, assistant secretary or other officer of such Person
generally authorized to bind such Person.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depository Institution as described in Section 9.4.
"BUSINESS DAY" has the meaning set forth in the Indenture.
"CERTIFICATE" means a Common Security Certificate or a Preferred
Security Certificate.
"TRUST AGREEMENT" has the meaning set forth in the first recital
hereto.
"CLOSING DATE" has the meaning set forth in the Underwriting Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" has the meaning set forth in Section 7.1(a).
"COMMON SECURITIES GUARANTEE" means the guarantee agreement dated as of
[ _ ] of the Sponsor in respect of the Common Securities.
"COMMON SECURITY CERTIFICATE" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"COMPOUND INTEREST" has the meaning set forth in Section 2(a) of Annex
I.
"CORPORATE TRUST OFFICE" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
"COVERED PERSON" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"COUPON RATE" has the meaning set forth in Section 2(a) of Annex I.
"CREDITOR" has the meaning set forth in Section 4.4.
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"DEBENTURE GUARANTOR" means Municipal Mortgage & Equity, LLC, a
Delaware limited liability company, or any successor entity in a merger,
consolidation or amalgamation, in its capacity as guarantor under the Indenture.
"DEBENTURE ISSUER" means Midland Financial Holdings, Inc., a Florida
corporation OR the Sponsor, in its capacity as issuer of the Debentures under
the Indenture.
"DEBENTURE ISSUER INDEMNIFIED PERSON" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"DEBENTURES" means the [-%] Junior Subordinated [Deferrable Interest]
Debentures due [ _ ] issued by the Debenture Issuer to the Institutional Trustee
on behalf of the Trust.
"DEBT TRUSTEE" means Wilmington Trust Company, not in its individual
capacity but solely as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"DECLARATION" has the meaning set forth in the preamble hereto.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE PREFERRED SECURITY CERTIFICATES" has the meaning set forth
in Section 9.4.
"DEPOSITORY INSTITUTION" shall mean DTC, another clearing agency, or
any successor registered as a clearing agency under the Exchange Act, or other
applicable statute or regulation, which, in each case, shall be designated by
the Debenture Issuer pursuant to either Section 2.03 or 2.11 of the Indenture.
"DEPOSITORY INSTITUTION PARTICIPANT" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Depository Institution effects book-entry transfers and pledges of securities
deposited with the Depository Institution.
"DIRECT ACTION" has the meaning set forth in Section 3.8(e).
"DISTRIBUTION" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DISTRIBUTION PAYMENT DATE" has the meaning set forth in Section 2(b)
of Annex I.
"DTC" means The Depository Trust Company, the initial Depository
Institution.
"EVENT OF DEFAULT" in respect of the Securities means an Event of
Default under the Indenture which has occurred and is continuing in respect of
the Debentures.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"EXTENSION PERIOD" has the meaning set forth in Section 2(b) of Annex
I.
"FIDUCIARY INDEMNIFIED PERSON" has the meaning set forth in Section
10.4(b).
"FISCAL YEAR" has the meaning set forth in Section 11.1.
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"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Statutory Trust Act.
"INDEMNIFIED PERSON" means a Debenture Issuer Indemnified Person or a
Fiduciary Indemnified Person.
"INDENTURE" means the Indenture dated as of [ _ ], among the Debenture
Issuer, the Debenture Guarantor and the Debt Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"INSTITUTIONAL TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"INSTITUTIONAL TRUSTEE ACCOUNT" has the meaning set forth in Section
3.8(c).
"INVESTMENT COMPANY" means an investment company as defined in the
Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"LIQUIDATION" has the meaning set forth in Section 3 of Annex I.
"LIQUIDATION DISTRIBUTION" has the meaning set forth in Section 3 of
Annex I.
"LIST OF HOLDERS" has the meaning set forth in Section 2.2(a).
"MAJORITY IN LIQUIDATION AMOUNT OF PREFERRED SECURITIES" means, except
as provided in the terms of the Preferred Securities set forth in Annex I hereto
or by the Trust Indenture Act, Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"NYSE" means the New York Stock Exchange, Inc.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each Authorized 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 Authorized Officer in
rendering the Officers' Certificate;
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(c) a statement that each such Authorized Officer has made such
examination or investigation as, in such Authorized Officer's
opinion, is necessary to enable such Authorized 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
Authorized Officer, such condition or covenant has been
complied with.
"ORIGINAL DECLARATION" has the meaning set forth in the first recital
hereto.
"PAYING AGENT" has the meaning set forth in Section 7.2.
"PAYMENT AMOUNT" has the meaning set forth in Section 6.1.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PREFERRED GUARANTEE TRUSTEE" means Wilmington Trust Company, not in
its individual capacity but solely as trustee under the Preferred Securities
Guarantee until a successor is appointed thereunder, and thereafter means such
successor trustee.
"PREFERRED SECURITIES" has the meaning set forth in Section 7.1(a).
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement dated as
of [ _ ] of Municipal Mortgage & Equity, LLC in respect of the Preferred
Securities.
"PREFERRED SECURITY BENEFICIAL OWNER" means, with respect to a
Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry
Interest, as reflected on the books of the Depository Institution, or on the
books of a Person maintaining an account with such Depository Institution
(directly as a Depository Institution Participant or as an indirect participant,
in each case in accordance with the rules of such Depository Institution).
"PREFERRED SECURITY CERTIFICATE" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"PREPAYMENT PRICE" has the meaning set forth in Section 4(b) of Annex
I.
"PRO RATA" has the meaning set forth in Section 8 of Annex I.
"PROSPECTUS" means the prospectus included in the Shelf Registration
Statement at the time the Shelf Registration Statement was declared effective,
as amended or supplemented by any prospectus supplement and by all other
amendments, including post-effective amendments, and supplements thereto, and
all other material incorporated by reference therein.
"QUORUM" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"REDEMPTION/DISTRIBUTION NOTICE" has the meaning set forth in Section
4(f)(i) of Annex I.
"REDEMPTION PRICE" shall have the meaning set forth in Section 4(a) of
Annex I.
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"REGULAR TRUSTEE" has the meaning set forth in Section 5.1.
"RELATED PARTY" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"RESIGNATION REQUEST" has the meaning set forth in Section 5.6(c).
"RESPONSIBLE OFFICER" means, with respect to the Institutional Trustee
any officer within the Corporate Trust Office of the Institutional Trustee with
direct responsibility for the administration of this Declaration and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"RULE 3a-5" means Rule 3a-5 under the Investment Company Act.
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"SECURITIES GUARANTEES" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"SHELF REGISTRATION STATEMENT" means the registration statement (File
Nos. 333-[ _ ], 333-[ _ ]-01, 333-[ _ ]-02, and 333-[ _ ]-03) relating to the
registration for sale of the Securities that has been filed with the Commission,
and all amendments (including post-effective amendments) thereto, and all
exhibits and material incorporated by reference therein.
"SPECIAL EVENT" has the meaning set forth in Section 4(c) of Annex I.
"SPONSOR" means MFH Financial Holdings, Inc., a Florida corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"STATED MATURITY" has the meaning set forth in Section 4(a) of Annex I.
"STATUTORY TRUST ACT" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"SUCCESSOR DELAWARE TRUSTEE" has the meaning set forth in Section
5.6(b)(ii).
"SUCCESSOR ENTITY" has the meaning set forth in Section 3.15(b)(i).
"SUCCESSOR INSTITUTIONAL TRUSTEE" has the meaning set forth in Section
5.6(b)(i).
"SUCCESSOR SECURITIES" has the meaning set forth in Section
3.15(b)(i)(B).
"SUPER MAJORITY" has the meaning set forth in Section 2.6(a)(ii).
"TAX EVENT" has the meaning set forth in Section 4(c) of Annex I
hereto.
"10% IN LIQUIDATION AMOUNT" means, except as provided in the terms of
the Preferred Securities set forth in Annex I hereto or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting
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together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate in liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions
to the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"TRANSFER AGENT" has the meaning set forth in Section 9.2(e).
"TREASURY REGULATIONS" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"TRUST" has the meaning set forth in the first recital hereto.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"TRUSTEE" or "TRUSTEES" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement for the
offering and sale of Preferred Securities substantially in the form of Exhibit
C.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If, and to the extent that, any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, the duties imposed by the Trust Indenture
Act shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Institutional
Trustee may reasonably require, of the names and addresses of the Holders ("LIST
OF HOLDERS") as of such record date, provided that neither the Sponsor nor the
Regular Trustees on behalf of the Trust shall be obligated to provide such List
of Holders at any time the List of Holders does not
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differ from the most recent List of Holders given to the Institutional Trustee
by the Sponsor and the Regular Trustees on behalf of the Trust and (ii) at any
other time, within 30 days of receipt by the Trust of a written request for a
List of Holders as of a date no more than 15 days before such List of Holders is
given to the Institutional Trustee. The Institutional Trustee shall preserve, in
as current a form as is reasonably practicable, all information contained in the
Lists of Holders given to it or which it receives in its capacity as Paying
Agent (if acting in such capacity), provided that the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Institutional Trustee.
(a) The Institutional Trustee shall transmit to Holders such reports
concerning the Institutional Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust Indenture
Act, the Institutional Trustee shall, within sixty days after [each May 15]
following the date of this Declaration deliver to Holders a brief report 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 Holders, be filed by the Institutional Trustee with each stock exchange, if
any, upon which the Securities are listed, with the Commission and with the
Trust. The Trust will promptly notify the Institutional Trustee when the
Securities are listed on any stock exchange and of any delisting thereof.
Section 2.4 Periodic Reports to Institutional Trustee.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
covenants and agrees to file with the Institutional Trustee, within 15 days
after the Trust 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) which the Trust may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Trust is not required to file information, documents or reports pursuant
to either of such sections, then to file with the Institutional Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations.
(b) Each of the Sponsor and the Regular Trustees on behalf of the Trust
covenants and agrees to file with the Institutional Trustee and the Commission,
in accordance with the rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with respect to
compliance by the Trust with the conditions and covenants provided for in this
Declaration as may be required from time to time by such rules and regulations.
(c) Each of the Sponsor and the Regular Trustees on behalf of the Trust
covenants and agrees to transmit by mail to all Holders, as the names and
addresses of such Holders appear upon the security register, within 30 days
after the filing thereof with the Institutional Trustee, such summaries of any
information, documents and reports required to be filed by the Trust pursuant to
subsections (a) and (b) of this Section 2.4 as may be required by rules and
regulations prescribed from time to time by the Commission.
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(d) Each of the Sponsor and the Regular Trustees on behalf of the Trust
covenants and agrees to furnish to the Institutional Trustee within 120 days of
the end of each fiscal year, the compliance certificate required by Section
314(a)(4) of the Trust Indenture Act. The compliance certificate shall be
executed by two Authorized Officers of the Sponsor, at least one of whom shall
be the chief financial or accounting officer of the Sponsor.
(e) Delivery of such reports, information and documents to the
Institutional Trustee is for informational purposes only and the Institutional
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Trust's compliance with any of its covenants hereunder
(as to which the Institutional Trustee is entitled to rely exclusively on
Officers' Certificates).
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) Subject to Section 2.6(c), the Holders of a Majority in liquidation
amount of Preferred Securities may, by vote, on behalf of the Holders of all of
the Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the Debentures (a "SUPER
MAJORITY") to be waived under the Indenture, then the Event of Default
under the Declaration may be waived only by the vote of the Holders of
at least the proportion in liquidation amount of the Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding; or
(iii) requires the consent or vote of each holder of
Debentures to be waived under the Indenture, then the Event of Default
under the Declaration may be waived only by each Holder of Preferred
Securities.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.
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(b) Subject to Section 2.6(c), the Holders of a Majority in liquidation
amount of the Common Securities may, by vote, on behalf of the Holders of all of
the Common Securities, waive any past Event of Default with respect to the
Common Securities and its consequences, provided that, if the underlying Event
of Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), then the Event of Default under the Declaration shall also not
be waivable; or
(ii) (ii) requires the consent or vote of (A) a Super
Majority to be waived, then the Event of Default under the Declaration
may be waived only by the vote of the Holders of at least the
proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding or (B) each holder of Debentures to be
waived, then the Event of Default under the Declaration may only be
waived by each Holder of Preferred Securities, except where the Holders
of the Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below in this Section 2.6(b);
provided further, each Holder of Common Securities will be deemed to
have waived any such Event of Default and all Events of Default with
respect to the Common Securities and its consequences until all Events
of Default with respect to the Preferred Securities have been cured,
waived or otherwise eliminated, and until such Events of Default have
been so cured, waived or otherwise eliminated, the Institutional
Trustee will be deemed to be acting solely on behalf of the Holders of
the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities set forth in Annex I
hereto. If any Event of Default with respect to the Preferred
Securities is waived by the Holders of Preferred Securities as provided
in this Declaration, the Holders of Common Securities agree that such
waiver shall also constitute the waiver of such Event of Default with
respect to the Common Securities for all purposes under this
Declaration without any further act, vote or consent of the Holders of
the Common Securities. Subject to the foregoing provisions of this
Section 2.6(b), upon such waiver, any such default shall cease to exist
and any Event of Default with respect to the Common Securities arising
therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other
default or Event of Default with respect to the Common Securities or
impair any right consequent thereon. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections 316(a)(1)(A)
and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this
Section 2.6(b), upon such waiver, any such default shall cease to exist
and any Event of Default with respect to the Common Securities arising
therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no such waiver shall extend to any subsequent or other
default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(c) The right of any Holder to receive payment of Distributions in
accordance with this Declaration and the terms of the Securities set forth in
Annex I on or after the respective payment dates therefor, or to institute suit
for the enforcement of any such payment on or after such payment dates, shall
not be impaired without the consent of each such Holder.
(d) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the written direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(d) shall be in lieu of
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Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
Section 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders, notice of all defaults with respect to the Securities
actually known to a Responsible Officer, unless such defaults have been cured
before the giving of such notice (the term "defaults" for the purposes of this
Section 2.7(a) being hereby defined to be an Event of Default as defined in the
Indenture, not including any periods of grace provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of, premium, if any, or
interest on any of the Debentures or in the payment of any sinking fund
installment established for the Debentures, the Institutional Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer in
good faith determines that the withholding of such notice is in the interests of
the Holders; and provided further, that in the case of any default of the
character specified in Section 5.01(c) of the Indenture, no such notice to
Holders shall be given until at least 60 days after the occurrence thereof but
shall be given within 90 days after such occurrence.
(b) The Institutional Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.01(a) or (b) of the
Indenture; or
(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a Responsible Officer
charged with the administration of the Declaration shall have actual
knowledge.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust continued by this Declaration is named "MFH Financial Trust [
_ ]," as such name may be modified from time to time by the Regular Trustees
following written notice to the Holders. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o Municipal
Mortgage & Equity, LLC, 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx
00000. Upon ten (10) Business Days' written notice to the Holders of Securities,
the Regular Trustees may designate another principal office.
Section 3.3 Purposes.
The exclusive purposes and functions of the Trust are (i) to issue (a)
its Preferred Securities pursuant to the Underwriting Agreement in exchange for
cash and (b) its Common Securities to the Sponsor in exchange for cash, and to
use the aggregate proceeds of the sale of the Securities to purchase the
Debentures, (ii) to enter into such agreements and arrangements as may be
necessary in connection with the issuance and sale of the Securities and to take
all actions, and exercise such discretion, as may be
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necessary or desirable in connection with the issuance and sale of the
Securities and to file such registration statements or make such other filings
under the Securities Act, the Exchange Act or State securities or "Blue Sky"
laws as may be necessary or desirable in connection with the offer and the
issuance and sale of the Securities, and (iii) except as otherwise limited
herein, to engage in only those other activities necessary or incidental
thereto. As more specifically provided in Section 3.7, the Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. Any
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and any action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust as a
separate legal entity. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in the
assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one series
of Preferred Securities and no more than one series of Common Securities; and,
provided further, that there shall be no interests in the Trust other than the
Securities;
(b) in connection with the issue of the Preferred Securities, to:
(i) execute and file with the Commission one or more
registration statements on Form S-3 prepared by the Sponsor, including
any and all amendments thereto, pertaining to the Preferred Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be necessary
in order to qualify or register all or part of the Preferred Securities
in any State in which the Sponsor has determined to qualify or register
such Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the NYSE or any other national stock exchange or The Nasdaq
Stock Market's National Market for listing or quotation upon notice of
issuance of any Preferred Securities;
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(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred Securities
under Section 12(b) of the Exchange Act;
(v) execute and enter into one or more purchase
agreements providing for the sale of the Common Securities and the
purchase of the Debentures; and
(vi) execute and deliver letters, documents or instruments
to DTC.
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Institutional Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities set forth in Annex
I hereto;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("LEGAL ACTION"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar, transfer
agent and paying agent for the Securities;
(m) to give prompt written notice to the Holders of any notice received
from the Debenture Issuer of its election to defer payments of interest on the
Debentures by extending the interest payment period under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
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(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to enable the Trust
to effect the purposes for which the Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the Investment
Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes, provided that such
actions do not adversely affect the interests of Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees shall exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Debenture Issuer.
The Regular Trustees shall take all actions on behalf of the Trust that
are not specifically required by this Declaration to be taken by any other
Trustee.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to, engage in any activity other than in
connection with the purposes of the Trust or other than as required or
authorized by this Declaration. In particular, the Trust shall not, and the
Trustees (including the Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
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(iii) possess Trust property for other than a Trust
purpose;
(iv) make any investments, other than investments
represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities;
(vii) incur any indebtedness for borrowed money; or
(viii) other than as provided in this Declaration or Annex I
hereto, (A) direct the time, method and place of exercising any trust
or power conferred upon the Debt Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures held in the Trust shall be due
and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures if such action would
cause the Trust to be classified for United States federal income tax
purposes as other than a grantor trust or would cause the Trust to be
deemed an Investment Company required to be registered under the
Investment Company Act.
Section 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders. The right, title and interest of the Institutional Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.6. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "INSTITUTIONAL TRUSTEE ACCOUNT") in the name
of and under the exclusive control of the Institutional Trustee on
behalf of the Holders and, upon the receipt of payments of funds made
in respect of the Debentures held by the Institutional Trustee, deposit
such funds into the Institutional Trustee Account and make payments to
the Holders from the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Securities to
the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders in accordance with
the provisions of the Indenture.
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(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises
out of or in connection with (i) an Event of Default of which a Responsible
Officer has actual knowledge or (ii) the Institutional Trustee's duties and
obligations under this Declaration or the Trust Indenture Act. If the
Institutional Trustee fails to enforce its rights under the Debentures after a
Holder of Preferred Securities has made a written request, such Holder may, to
the extent permitted by applicable law, institute a legal proceeding against the
Debenture Issuer to enforce the Institutional Trustee's rights under the
Debentures without first instituting any legal proceeding against the
Institutional Trustee or any other Person. Notwithstanding the foregoing, if an
Event of Default has occurred and is continuing and such event is attributable
to the failure of the Debenture Issuer (or the Debenture Guarantor on its
behalf) 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), then 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 (a "DIRECT
ACTION") on or after the respective due date specified in the Debentures.
Notwithstanding any payments made to such Holder of Preferred Securities by the
Debenture Issuer in connection with a Direct Action, the Debenture Issuer shall
remain obligated to pay the principal of or interest on the Debentures held by
the Trust or the Institutional Trustee of the Trust, and the Debenture Issuer
shall be subrogated to the rights of the Holder of such Preferred Securities
with respect to payments on the Preferred Securities. Except as provided in the
preceding sentences and in the Preferred Securities Guarantee, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders pursuant to the
terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed
and has accepted that appointment in accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer
occurs and is continuing, the Institutional Trustee shall, for the benefit of
Holders, enforce its rights as holder of the Debentures subject to the rights of
the Holders pursuant to the terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each,
a "PAYING AGENT") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Institutional Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Institutional Trustee, in each case without prior notice to the Holders.
The Paying Agent may perform such functions whenever the Institutional Trustee
may do so. Each reference in this Declaration to payment to the Holders by the
Institutional Trustee includes such payment by a Paying Agent. A Paying Agent
has the same rights as the Institutional Trustee to deal with the Sponsor or an
Affiliate, and itself may be the Trust, an Affiliate of the Trust or a Related
Party of the Sponsor. The Institutional Trustee is hereby appointed to initially
act as Paying Agent for the Securities.
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(i) The Institutional Trustee shall give prompt written notice to the
Holders of the Securities of any notice received by it from the Debenture Issuer
of the Debenture Issuer's election to defer payments of interest on the
Debentures by extending the interest payment period with respect thereto.
(j) The Institutional Trustee shall notify all Holders of the Preferred
Securities of any notice of default received from the Debt Trustee with respect
to the Debentures. Such notice shall state that such event of default under the
Indenture also constitutes an Event of Default hereunder.
(k) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Institutional Trustee shall exercise the powers set forth in this
Section 3.8 and in Sections 3.9 and 3.10 in a manner that is consistent with the
purposes and functions of the Trust set out in Section 3.3, and the
Institutional Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the
Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants or obligations shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer has actual knowledge, the Institutional Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions
of this Declaration and the Institutional Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
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(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Institutional Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk is not reasonably
assured to it;
(v) the Institutional Trustee's sole duty with respect to
the custody, safekeeping and physical preservation of the Debentures
and the Institutional Trustee Account shall be to deal with such
property in a similar manner as the Institutional Trustee deals with
similar property for its own account, subject to the protections and
limitations on liability afforded to the Institutional Trustee under
this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Institutional Trustee
need not be segregated from other funds held by it except in relation
to the Institutional Trustee Account maintained by the Institutional
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law;
(viii) the Institutional Trustee shall not be responsible
for monitoring the compliance by the Regular Trustees or the Sponsor
with their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor;
(ix) without prejudice to any other rights available to
the Institutional Trustee under applicable law, when the Institutional
Trustee incurs expenses or renders services in connection with a
bankruptcy event involving any obligor on the Securities or the
Debentures, such expenses (including the fees and expenses of its
counsel) and the compensation for such services are intended to
constitute expenses of administration under any bankruptcy law or law
relating to creditors rights generally; and
(x) any action taken hereunder by the Institutional
Trustee or its agents shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to act or as its compliance with
any of the terms and provisions of this Declaration, both of which
shall be conclusively evidenced by the Institutional Trustee's or its
agent's taking such action.
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Section 3.10 Certain Rights of the Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor or
the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see
to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of
its selection or other experts of its selection and the advice or
opinion of such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion, which counsel may be counsel to
the Sponsor or any of its Affiliates, and may include any of its
employees. The Institutional Trustee shall have the right at any time
to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Declaration at the request, order or direction of any Holder, unless
such Holder shall have provided to the Institutional Trustee security
and indemnity satisfactory to the Institutional Trustee against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Institutional Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Institutional Trustee; provided that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond, debenture, coupon or other paper or
document, but the Institutional Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it
may see fit at the sole cost of the Debenture Issuer and shall incur no
liability or additional liability of any kind by reason of such inquiry
or investigation;
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(viii) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees or attorneys and
the Institutional Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(ix) any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders; and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall be conclusively
evidenced by the Institutional Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Institutional Trustee (i) may request
instructions from the Holders which instructions may only be given by
the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee
under the terms of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received and (iii) shall
be protected in conclusively relying on or acting in accordance with
such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration;
(xii) the Institutional Trustee may request that the Trust
deliver an Officers' Certificate setting forth the names of individuals
and/or titles of officers authorized at such time to take specified
actions pursuant to this Declaration, which Officers' Certificate may
be signed by any person authorized to sign an Officers' Certificate,
including any person specified as so authorized in any such certificate
previously delivered and not superseded; and
(xiii) the rights, privileges, protections, immunities and
benefits given to the Institutional Trustee, including, without
limitation, its rights to be indemnified, are extended to, and shall be
enforceable by, the Institutional Trustee in each of its capacities
hereunder, and to each agent, custodian or other Person employed to act
hereunder.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Statutory Trust Act. Notwithstanding anything herein to the contrary, the
Delaware Trustee shall not be liable for the acts or omissions to act of the
Trust
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or of the Regular Trustees except for such acts as the Delaware Trustee is
expressly obligated or authorized to undertake under this Declaration or the
Statutory Trust Act and except for the gross negligence or willful misconduct of
the Delaware Trustee.
Section 3.12 Execution of Documents.
Except as otherwise required by the Statutory Trust Act or applicable
law, any one of the Regular Trustees is authorized to execute on behalf of the
Trust any documents which the Regular Trustees have the power and authority to
execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall dissolve on July 23, 2038.
Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c), and Section 8.1 hereof or Section 4 of
Annex I hereto.
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees, and without the
consent of the Holders, the Institutional Trustee or the Delaware Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust organized
as such under the laws of any State of the United States; provided that:
(i) if the Trust is not the survivor, such successor
entity (the "SUCCESSOR ENTITY") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Preferred Securities other
securities having substantially the same terms as the
Preferred Securities (the "SUCCESSOR SECURITIES") so long as
the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee
of the Successor Entity that possesses the same powers and duties as
the Institutional Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with
another organization on which the Preferred Securities are then listed
or quoted;
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(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Successor Entity);
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Debenture Issuer has received an opinion of a
nationally recognized independent counsel to the Trust experienced in
such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders (including any Successor
Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the Successor
Entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will be treated as a grantor trust for United States
federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee and the Common
Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the
total capital of the Trust, at the same time as the Preferred Securities are
issued pursuant to the Underwriting Agreement.
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Section 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare for filing by the Trust with the Commission one or more
registration statements on Form S-3 in relation to the Preferred Securities,
including any amendments thereto;
(b) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
states;
(c) if so determined by the Sponsor, to prepare for filing by the Trust
an application to the NYSE or any other national stock exchange or The Nasdaq
National Market for listing or quotation upon notice of issuance of the
Preferred Securities;
(d) if so determined by the Sponsor, to prepare for filing by the Trust
with the Commission a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the Exchange
Act, including any amendments thereto; and
(e) to negotiate the terms of and execute and deliver the Underwriting
Agreement providing for the issuance of the Preferred Securities.
Section 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders to institute a
Direct Action as set forth in Section 3.8(e) hereto.
Section 4.4 Expenses.
In connection with the offering, sale and issuance of the Debentures to
the Trust and in connection with the sale of the Securities by the Trust, the
Debenture Issuer, in its capacity as borrower with respect to the Debentures,
shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and compensation, reimbursement and
indemnification of the Debt Trustee under the Indenture in accordance with the
provisions of Section 6.06 of the Indenture;
(b) be responsible for and shall pay all debts and obligations (other
than with respect to the Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the organization,
maintenance and dissolution of the Trust, the offering, sale and issuance of the
Securities (including commissions to the underwriters in connection therewith),
the fees and expenses (including reasonable counsel fees and expenses) of the
Institutional Trustee, the Delaware Trustee and the Regular Trustees (including
any amounts payable under Article X of this Declaration), the costs and expenses
relating to the operation of the Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the
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acquisition, financing and disposition of Trust assets and the enforcement by
the Institutional Trustee of the rights of the Holders of the Preferred
Securities);
(c) be primarily liable for any indemnification obligations arising
with respect to this Declaration; and
(d) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and expenses
with respect to such taxes of the Trust.
The Debenture Issuer's obligations under this Section 4.4 shall be for
the benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a "CREDITOR") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Debenture Issuer's obligations under this Section 4.4 directly against the
Debenture Issuer and the Debenture Issuer irrevocably waives any right of remedy
to require that any such Creditor take any action against the Trust or any other
Person before proceeding against the Debenture Issuer. The Debenture Issuer
agrees to execute such additional agreements as may be necessary or desirable in
order to give full effect to the provisions of this Section 4.4.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees.
(a) The number of Trustees initially shall be four. At any time before
the issuance of any Securities, the Sponsor may, by written instrument, increase
or decrease the number of Trustees.
After the issuance of any Securities, the number of Trustees may be increased or
decreased by vote of the Holders of a majority in liquidation amount of the
Common Securities voting as a class at a meeting of the Holders of the Common
Securities; provided, however, that, the number of Trustees shall in no event be
less than two; and provided further that (i) one Trustee, in the case of a
natural person, shall be a person who is a resident of the State of Delaware or
that, if not a natural person, is an entity which has its principal place of
business in the State of Delaware (the "DELAWARE TRUSTEE"); (ii) there shall be
at least one Trustee who is an employee or officer of, or is affiliated with the
Sponsor (a "REGULAR TRUSTEE"); and (iii) one Trustee shall be the Institutional
Trustee for so long as this Declaration is required to qualify as an indenture
under the Trust Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements.
(b) Any action taken by Holders of Common Securities pursuant to this
Article V shall be taken at a meeting of Holders of Common Securities convened
for such purpose or by written consent of such Holders.
(c) Except as otherwise provided herein, no amendment may be made to
this Section 5.1 which would change any rights with respect to the number,
existence or appointment and removal of Trustees, except with the consent of
each Holder of Common Securities.
Section 5.2 Delaware Trustee.
If required by the Statutory Trust Act, one Trustee (the "DELAWARE
TRUSTEE") shall be:
(a) a natural person who is a resident of the State of Delaware; or
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(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law, provided that, if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
The initial Delaware Trustee shall be Wilmington Trust Company until
removed or replaced in accordance with Section 5.6.
Section 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor or the Debenture
[Issuer AND Guarantor]; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least $50,000,000 (US), 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 supervising or examining authority
referred to above, then for the purposes of this Section 5.3(a)(ii),
the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Institutional Trustee shall cease to be eligible
to so act under Section 5.3(a), the Institutional Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act or
becomes a creditor of the Sponsor or the Debenture [Issuer AND Guarantor] during
the time periods specified in Section 311 of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) and 311 of the Trust
Indenture Act, as applicable.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be Wilmington Trust Company
until removed or replaced in accordance with Section 5.6.
Section 5.4 Certain Qualifications of the Regular Trustees and
the Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
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Section 5.5 Regular Trustees.
The initial Regular Trustees shall be Xxxxxxx X. Xxxxxxx, Xxxxxxx X.
Xxxxxxxx and Xxxx X. Xxxxxx.
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Statutory Trust Act or applicable law, any one of the
Regular Trustees is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to execute pursuant to
Section 3.6.
(c) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
Section 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and be
continuing after the issuance of any Securities, by vote of the Holders
of a Majority in liquidation amount of the Common Securities voting as
a class at a meeting of the Holders of the Common Securities; and
(iii) if an Event of Default shall have occurred and be
continuing, with respect to:
(A) the Regular Trustees, by the vote of the Holders
of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common
Securities; and
(B) the Institutional Trustee and the Delaware
Trustee, by the vote of the Holders of a Majority in
liquidation amount of the Preferred Securities voting as a
class at a meeting of the Holders of the Preferred Securities.
(b) The Trustee that acts as:
(i) Institutional Trustee shall not be removed in
accordance with Section 5.6(a) until a successor Institutional Trustee
possessing the qualifications to act as Institutional Trustee under
Section 5.3(a) (a "SUCCESSOR INSTITUTIONAL TRUSTEE") has been appointed
and has accepted such appointment by written instrument executed by
such Successor Institutional Trustee and delivered to the Regular
Trustees, the Sponsor and the Institutional Trustee being removed; and
(ii) Delaware Trustee shall not be removed in accordance
with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"SUCCESSOR DELAWARE TRUSTEE") has been appointed and has accepted such
appointment by
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written instrument executed by such Successor Delaware Trustee and
delivered to the Regular Trustees, the Sponsor and the Delaware Trustee
being removed.
(c) A Trustee appointed to office shall hold office until its successor
shall have been appointed or until its death, dissolution, termination, removal
or resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument (a "RESIGNATION REQUEST") in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered
to the Trust, the Sponsor and the resigning Institutional
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the Holders; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Institutional Trustee or Successor Delaware
Trustee as the case may be if the Institutional Trustee or the Delaware Trustee
delivers a Resignation Request in accordance with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of a notice of removal or a Resignation
Request, the Institutional Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition, at the expense of the Sponsor, any court
of competent jurisdiction for appointment of a Successor Institutional Trustee
or Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Institutional Trustee or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
Section 5.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees, shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
Section 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul, dissolve or terminate the Trust.
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Whenever a vacancy in the number of Regular Trustees shall occur, until such
vacancy is filled by the appointment of a Regular Trustee in accordance with
Section 5.6, the Regular Trustees in office, regardless of their number, shall
have all the powers granted to the Regular Trustees and shall discharge all the
duties imposed upon the Regular Trustees by this Declaration.
Section 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) to each Regular
Trustee not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) to each Regular Trustee not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Regular Trustees may be taken at a meeting
by vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees. In the event there is only one Regular Trustee, any and all
action of such Regular Trustee shall be evidenced by a written consent of such
Regular Trustee.
Section 5.10 Delegation of Power.
The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the extent such delegation is not prohibited by applicable law or contrary to
the provisions of the Trust, as set forth herein.
Section 5.11 Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities as set forth in Annex I. If and to the
extent that the Debenture Issuer (or the Debenture
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Guarantor on its behalf) makes a payment of interest (including Compound
Interest and Additional Interest), premium and/or principal on the Debentures
held by the Institutional Trustee (the amount of any such payment being a
"PAYMENT AMOUNT"), the Institutional Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"DISTRIBUTION") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of preferred securities (the "PREFERRED SECURITIES"), representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (which terms are incorporated by reference in, and made a part
of, this Declaration as if specifically set forth herein) and one class of
common securities (the "COMMON SECURITIES"), representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in Annex
I (which terms are incorporated by reference in, and made a part of, this
Declaration as if specifically set forth herein). The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the Trust by any
Regular Trustee. Such signature shall be the manual or facsimile signature of
any present or any future Regular Trustees. Typographical and other minor errors
or defects in any such reproduction of any such signature shall not affect the
validity of any Security. In case any Regular Trustee of the Trust who shall
have signed any of the Securities shall cease to be such Regular Trustee before
the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the Regular Trustees may deem appropriate, or as may be required
to comply with any law or with any rule or regulation of any stock exchange on
which Securities may be listed, or to conform to usage. Pending the preparation
of definitive Preferred Securities, the Regular Trustees on behalf of the Trust
may execute and, upon written order of any Regular Trustee, the Institutional
Trustee shall authenticate, temporary Preferred Securities (printed,
lithographed or typewritten), substantially in the form of the definitive
Preferred Securities in lieu of which they are issued, but with such omissions,
insertions and variations as may be appropriate for temporary Preferred
Securities all as may be determined by the Regular Trustees on behalf of the
Trust upon the same conditions and in substantially the same manner, and with
like effect, as definitive Preferred Securities. Without unnecessary delay, the
Regular Trustees on behalf of the Trust will execute and furnish and, upon
written order of any Regular Trustee, the Institutional Trustee shall
authenticate, definitive Preferred Securities and thereupon any or all temporary
Preferred Securities may be surrendered to the transfer agent and registrar in
exchange therefor (without charge to the Holders).
(c) At the time of the delivery of the Preferred Securities, the
Regular Trustees shall cause Certificates to be authenticated by the
Institutional Trustee on behalf of the Trust and delivered to or upon the
written order of the Trust, signed by any Regular Trustee without further
corporate action by the Sponsor, in authorized denominations as directed by the
Regular Trustees. A Preferred Security shall not be valid until authenticated by
the manual signature of an authorized officer of the Institutional Trustee.
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The signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Each Preferred Security shall be dated the date of its authentication.
The Institutional Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Institutional Trustee
may do so. Each reference in this Declaration to authentication by the
Institutional Trustee includes authentication by such agent. An authenticating
agent has the same rights as the Institutional Trustee to deal with the Sponsor
or an Affiliate, and may itself be an Affiliate of the Trust or a Related Party
of the Sponsor.
(d) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(e) Upon issuance of the Preferred Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and nonassessable. Upon issuance of the Common Securities as provided
in this Declaration, the Securities so issued shall be deemed to be validly
issued and fully paid.
(f) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
Section 7.2 Paying Agent.
In the event that the Preferred Securities are not in book-entry only
form, the Trust shall maintain in the Borough of Manhattan, The City of New
York, State of New York, an office or agency where the Preferred Securities may
be presented for payment ("PAYING AGENT"). The Trust may appoint the Paying
Agent and may appoint one or more additional paying agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
paying agent. The Trust may change any Paying Agent without prior notice to any
Holder. The Trust shall notify the Institutional Trustee of the name and address
of any Agent not a party to this Declaration. If the Trust fails to appoint or
maintain another entity as Paying Agent, the Institutional Trustee shall act as
such. The Trust or any of its Affiliates may act as Paying Agent. The
Institutional Trustee shall initially act as Paying Agent for the Preferred
Securities and the Common Securities. Any successor Paying Agent or any
additional Paying Agent shall execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Trustees that as Paying Agent, such successor Paying Agent or additional
Paying Agent will hold all sums, if any, held by it for payment to the Holders
in trust for the benefit of the Holders entitled thereto until such sums shall
be paid to such Holders, will give the Institutional Trustee notice of any
default by the Trust (or any other obligor on the Securities) in the making of
any payment on the Securities and will, at any time during the continuance of
any such default, upon the written request of the Institutional Trustee,
forthwith pay to the Institutional Trustee all sums so held in trust by such
Paying Agent. The Paying Agent shall return all unclaimed funds to the
Institutional Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Institutional Trustee. Any
reference in this Declaration to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
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ARTICLE VIII
DISSOLUTION OF TRUST
Section 8.1 Dissolution of Trust.
(a) The Trust shall dissolve:
(i) on the expiration of the term of the Trust set forth
in Section 3.14;
(ii) upon the bankruptcy of the Sponsor, the Debenture
[Issuer AND Guarantor] or the Trust;
(iii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the Debenture [Issuer AND
Guarantor] after having obtained the consent of the Holders of at least
a Majority in liquidation amount of the Securities voting together as a
single class to dissolve the Trust, or the revocation of the Sponsor's
or Debenture [Issuer AND Guarantor]'s charter and the expiration of 90
days after the date of revocation without a reinstatement thereof;
(iv) upon the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Debenture [Issuer AND
Guarantor], the Sponsor or the Trust;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof, including
any Additional Interest or Compound Interest, shall have been paid to
the Holders in accordance with the terms of the Securities;
(vi) upon the distribution of all of the Debentures to the
Holders in exchange for all of the Securities in accordance with the
terms of the Securities; or
(vii) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), after satisfaction of liabilities to creditors of the
Trust, if any, the Regular Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
dissolution and termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall, to the fullest extent
permitted by law, be null and void.
(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
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(c) The Sponsor may not transfer the Common Securities, provided,
however, the Sponsor may transfer Common Securities (i) in connection with a
consolidation or merger of the Sponsor into another Person or any conveyance,
transfer or lease by the Sponsor of its properties and assets substantially as
an entirety to any Person, pursuant to Article X of the Indenture or (ii) to an
Affiliate of the Sponsor in compliance with applicable law. The Regular Trustee
shall cause each Common Security Certificate to contain a legend stating "TO THE
EXTENT PERMITTED BY APPLICABLE LAW THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT
IN COMPLIANCE WITH SECTION 9.1 OF THE DECLARATION OF TRUST".
Section 9.2 Transfer of Certificates.
(a) The Regular Trustees shall provide (or direct the Institutional
Trustee to provide) for the registration of Certificates and of transfers of
Certificates, which will be effected without charge but only upon payment (with
such indemnity as the Regular Trustees may require) in respect of any tax or
other government charges that may be imposed in relation to it. Upon surrender
for registration of transfer of any Certificate, the Regular Trustees shall
cause (or direct the Institutional Trustee to cause) one or more new
Certificates to be issued and authenticated by the Institutional Trustee or
authentication agent in the name of the designated transferee or transferees.
Every Certificate surrendered for registration of transfer shall be accompanied
by a written instrument of transfer in form satisfactory to the Regular Trustees
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer shall be
canceled by the Regular Trustees (or, at the direction of the Regular Trustees,
the Institutional Trustee). A transferee of a Certificate shall be entitled to
the rights and subject to the obligations of a Holder hereunder upon the receipt
by such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
(b) Upon receipt by the Regular Trustees of a Definitive Preferred
Security Certificate, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Regular Trustees, requesting transfer of
such Definitive Preferred Security Certificate for a beneficial interest in a
Global Certificate, the Regular Trustees shall cancel such Definitive Preferred
Security Certificate and cause, or direct the Depository Institution to cause,
the aggregate number of Preferred Securities represented by the appropriate
Global Certificate to be increased accordingly. If no Global Certificates are
then outstanding, the Trust shall issue and the Institutional Trustee shall
authenticate and deliver, upon written order of any Regular Trustee, an
appropriate number of Preferred Securities in global form.
(c) Upon receipt by the Regular Trustees from the Depository
Institution or its nominee on behalf of any Person having a beneficial interest
in a Global Certificate of written instructions or such other form of
instructions as is customary for the Depository Institution or the Person
designated by the Depository Institution, requesting transfer of a beneficial
interest in a Global Certificate for a Definitive Preferred Security
Certificate, then the Regular Trustees (or, at the direction of the Regular
Trustees, the Institutional Trustee) or the securities custodian, at the
direction of the Institutional Trustee, will cause, in accordance with the
standing instructions and procedures existing between the Depository Institution
and the securities custodian, the aggregate principal amount of the Global
Certificate to be reduced on its books and records and, following such
reduction, the Trust will execute and the Institutional Trustee will
authenticate and deliver to the transferee a Definitive Preferred Security
Certificate.
Definitive Preferred Security Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Depository Institution, pursuant to
instructions from its Depository Institution Participants or indirect
participants or otherwise, shall instruct the Institutional Trustee. The Trust
shall issue and the Institutional Trustee shall
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authenticate and deliver such Preferred Securities to the persons in whose names
such Preferred Securities are so registered in accordance with the instructions
of the Depository Institution.
(d) Notwithstanding any other provisions of this Declaration, a Global
Certificate may not be transferred as a whole except by the Depository
Institution to a nominee of the Depository Institution or another nominee of the
Depository Institution or by the Depository Institution or any such nominee to a
successor Depository Institution or a nominee of such successor Depository
Institution.
(e) The Regular Trustees may appoint a transfer agent and registrar
("TRANSFER AGENT") acceptable to the Trust to perform the functions set forth in
this Section 9.2. The Transfer Agent may perform such functions whenever the
Regular Trustees may do so. Each reference in this Declaration to registration
and transfer of Preferred Securities by the Regular Trustees includes such
activities by the Transfer Agent. The Transfer Agent has the same rights as the
Regular Trustees to deal with the Sponsor or an Affiliate. The Regular Trustees
hereby appoint the Institutional Trustee to initially act as Transfer Agent for
the Preferred Securities.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
Section 9.4 Book-Entry Interests.
Unless otherwise specified in the terms of the Preferred Securities set
forth in Annex I, the Preferred Securities Certificates, on original issuance,
will be executed and issued by the Trust and authenticated by the Institutional
Trustee in the form of one or more, fully-registered, global Preferred Security
Certificates (each a "GLOBAL CERTIFICATE"), to be delivered to DTC, the initial
Depository Institution, by, or on behalf of, the Trust. Such Global Certificates
shall initially be registered on the books and records of the Trust in the name
of DTC or its nominee, and no Preferred Security Beneficial Owner will receive a
Definitive Preferred Security Certificate representing such Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Preferred Security
Certificates (the "DEFINITIVE PREFERRED SECURITY CERTIFICATES") have been issued
to the Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Depository Institution, with respect to such Preferred Security Beneficial
Owners, for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of such Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to such Preferred
Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and
(d) the rights of such Preferred Security Beneficial Owners shall be
exercised only through the Depository Institution and shall be limited to those
established by law and agreements between such
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Preferred Security Beneficial Owners and the Depository Institution and/or the
Depository Institution Participants. The Depository Institution will make
book-entry transfers among the Depository Institution Participants and receive
and transmit payments of Distributions on the Global Certificates to such
Depository Institution Participants.
Depository Institution Participants shall have no rights under this
Declaration with respect to any Global Certificate held on their behalf by the
Depository Institution or by the Institutional Trustee as the custodian of the
Depository Institution or under such Global Certificate, and the Depository
Institution may be treated by the Trust, the Institutional Trustee and any agent
of the Trust or the Institutional Trustee as the absolute owner of such Global
Certificate for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Trust, the Institutional Trustee or any agent of the
Trust or the Institutional Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository
Institution or impair, as between the Depository Institution and its Depository
Institution Participants, the operation of customary practices of such
Depository Institution governing the exercise of the rights of a holder of a
beneficial interest in any Global Certificate.
At such time as all beneficial interests in a Global Certificate have
either been exchanged for Definitive Preferred Security Certificates to the
extent permitted by this Declaration or redeemed, repurchased or canceled in
accordance with the terms of this Declaration, such Global Certificate shall be
returned to the Depository Institution for cancellation or retained and canceled
by the Institutional Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Certificate is exchanged for Definitive
Preferred Security Certificates, or if Definitive Preferred Security
Certificates are exchanged for a beneficial interest in a Global Certificate,
Preferred Securities represented by such Global Certificate shall be reduced or
increased and an adjustment shall be made on the books and records of the
Institutional Trustee (if it is then the securities custodian for such Global
Certificate) with respect to such Global Certificate, by the Regular Trustees or
the Institutional Trustee as securities custodian, to reflect such reduction or
increase.
Section 9.5 Notices to Depository Institution.
Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until Definitive
Preferred Security Certificates shall have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Preferred
Security Holders to the Depository Institution, and shall have no notice
obligations to the Preferred Security Beneficial Owners.
Section 9.6 Appointment of Successor Depository Institution.
If any Depository Institution elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Depository
Institution with respect to such Preferred Securities.
Section 9.7 Definitive Preferred Security Certificates.
If:
(a) a Depository Institution elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a successor
Depository Institution is not appointed within 90 days after such discontinuance
pursuant to Section 9.6;
(b) a Depository Institution ceases to be a clearing agency under the
Exchange Act; or
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(c) the Sponsor elects in its sole discretion to terminate the
book-entry system through the Depository Institution with respect to some or all
of the Preferred Securities,
then:
(d) Definitive Preferred Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(e) upon surrender of the Global Certificates by the Depository
Institution, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions of the
Depository Institution. Neither the Trustees nor the Trust shall be liable for
any delay in delivery of such instructions and each of them may conclusively
rely on and shall be protected in relying on, said instructions of the
Depository Institution. The Definitive Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Preferred Securities may be listed, or to conform to usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees, the Institutional
Trustee or any authenticating agent such security or indemnity as may be
required by them to keep each of them harmless, then, in the absence of actual
notice that such Certificate shall have been acquired by a protected purchaser
(within the meaning of Article 8 of the Uniform Commercial Code), any Regular
Trustee on behalf of the Trust shall execute and deliver and, upon written order
of any Regular Trustee, the Institutional Trustee shall authenticate, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 9.8, the Regular Trustees may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section shall constitute conclusive evidence of an
ownership interest in the relevant Securities, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of the Holders which
shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder any
deficit upon dissolution of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than with respect to the Securities) to the
extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders
shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
Section 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage,
expense or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage,
expense or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Institutional Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in conclusively
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
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(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
Section 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Debenture Issuer Indemnified Person who was or is
a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Debenture
Issuer Indemnified Person against expenses (including reasonable
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action,
suit or proceeding except that no Debenture Issuer Indemnified Person
will be indemnified for such Debenture Issuer Indemnified Person's own
gross negligence or willful misconduct. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Debenture Issuer Indemnified Person did
not act in good faith and in a manner which he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Debenture Issuer Indemnified Person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of
the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Debenture Issuer Indemnified
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Person against expenses (including reasonable attorneys' fees) actually
and reasonably incurred by him in connection with the defense or
settlement of such action or suit except that no Debenture Issuer
Indemnified Person will be indemnified for such Debenture Issuer
Indemnified Person's own gross negligence or willful misconduct and
except that no such indemnification shall be made in respect of any
claim, issue or matter as to which such Debenture Issuer Indemnified
Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court
in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Debenture Issuer Indemnified
Person shall be successful on the merits or otherwise (including
dismissal of an action without prejudice or the settlement of an action
without admission of liability) in defense of any action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section
10.4(a), or in defense of any claim, issue or matter therein, such
Debenture Issuer Indemnified Person shall be indemnified, to the full
extent permitted by law, against expenses (including reasonable
attorneys' fees) actually and reasonably incurred by such Debenture
Issuer Indemnified Person in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Debenture Issuer Indemnified
Person is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion or (3) by the Common Security Holder of the Trust.
(v) Expenses (including reasonable attorneys' fees)
incurred by a Debenture Issuer Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a) shall be
paid by the Debenture Issuer in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Debenture Issuer Indemnified Person to repay such amount
if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made (i)
by the Regular Trustees by a majority vote of a quorum of disinterested
Regular Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (iii) by the
Sponsor, that, based upon the facts known to the Regular Trustees,
counsel or the Sponsor, as the case may be, at the time such
determination is made, such Debenture Issuer Indemnified Person's
actions constituted gross negligence or willful misconduct. In no event
shall any advance be made in instances where the Regular Trustees,
independent legal counsel or the Sponsor reasonably determine that such
person deliberately breached his duty to the Trust or its Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or Preferred Security Holders or otherwise,
both as to action in his official capacity and as to action in another
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capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract
between the Debenture Issuer and each Debenture Issuer Indemnified
Person who serves in such capacity at any time while this Section
10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Debenture
Issuer Indemnified Person against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status
as such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any Person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a Person
who has ceased to be a Debenture Issuer Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of such
a Person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents of
the Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "FIDUCIARY INDEMNIFIED PERSON") for, and to
hold each Fiduciary Indemnified Person harmless against, any and all loss,
liability, damage, claim, action, suit, cost or expense (including taxes)
incurred without gross negligence (or, in the case of the Institutional Trustee,
negligence) or willful misconduct on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against or investigating any claim (regardless of who has
asserted such claim) or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The obligation to indemnify as set
forth in this Section 10.4(b) shall survive the resignation or removal of the
Institutional Trustee or the Delaware Trustee, as the case may be, and the
satisfaction and discharge of this Declaration.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee (subject to Section 5.3(c)) may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Delaware Trustee or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust,
- 39 -
could be taken by the Trust, and any Covered Person, the Sponsor, the Delaware
Trustee and the Institutional Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Institutional Trustee may engage or be interested in
any financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the Sponsor
or its Affiliates.
Section 10.6 Compensation; Fees.
The Debenture Issuer agrees:
(a) to pay to the Trustees from time to time such compensation as the
Debenture Issuer and the Trustees shall agree to in writing for all services
rendered by them hereunder (which compensation shall not be limited by any
provision of law in regard to compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to their respective negligence or
bad faith; and
(c) the provisions of Sections 10.4 and 10.6 shall survive the
termination of this Declaration and the resignation or removal of the Trustees.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("FISCAL YEAR") of the Trust shall be the calendar
year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees. The books and records of the Trust, together with a
copy of the Declaration and a certified copy of the Trust Agreement, and any
amendment thereto shall at all times be maintained at the principal office of
the Trust and shall be open for inspection for any examination by any Holder or
its duly authorized representative for any purpose reasonably related to its
interest in the Trust during normal business hours.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders, within 90 days after the end of each Fiscal Year of the
Trust, annual financial statements of the Trust, including a balance sheet of
the Trust as of the end of such Fiscal Year, and the related statements of
income or loss.
- 40 -
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders, any annual United States federal income tax information
statement, required by the Code, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations. Notwithstanding any right under the Code to deliver any such
statement at a later date, the Regular Trustees shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed with
the appropriate taxing authority, an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
Section 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
Section 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, State and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the
Institutional Trustee; and
- 41 -
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee;
Neither the Institutional Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Declaration that affects its own
rights, duties or immunities under this Declaration.
(b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities) and that all conditions
precedent to the execution and delivery of such amendment have been
satisfied;
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities) and that all conditions precedent to
the execution and delivery of such amendment have been
satisfied; and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities) and that all conditions precedent to
the execution and delivery of such amendment have been
satisfied; and
(iii) to the extent the result of such amendment would be
to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Institutional Trustee in contravention of the Trust
Indenture Act; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act.
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder may be effected only with such additional requirements
as may be set forth in the terms of such Securities;
(d) Sections 4.4, 9.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;
- 42 -
(f) The rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove Trustees shall not
be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities;
(g) Notwithstanding Section 12.1(c), this Declaration may be amended by
the Sponsor and the Trustees without the consent of the Holders to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of
the Sponsor;
(iv) conform to any change in Rule 3a-5 or written change
in interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the right, preferences or
privileges of the Holders; and
(v) preserve the status of the Trust as a grantor trust
for federal income tax purposes; and
(h) Notwithstanding Section 12.1(c), this Declaration may be amended by
the Sponsor, the Debenture [Issuer AND Guarantor] and the Trustees without the
consent of the Holders to add to the covenants, restrictions or obligations of
the Debenture [Issuer AND Guarantor].
Section 12.2 Meetings of the Holders of Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Preferred Securities
are listed or admitted for trading. The Regular Trustees shall call a meeting of
the Holders of such class if directed to do so by the Holders of at least 10% in
liquidation amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating that
the signing Holders wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders calling a
meeting shall specify in writing the Certificates held by the Holders exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders:
(i) notice of any such meeting shall be given to all the
Holders having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent
or approval of the Holders is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders. Any action that may
be taken at a meeting of the Holders may be taken without a meeting and
without prior notice if a consent in writing setting forth the action
so taken is signed by the Holders owning not less than the minimum
amount of Securities in liquidation amount that would be necessary to
authorize or
- 43 -
take such action at a meeting at which all Holders having a right to
vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders entitled to vote
who have not consented in writing. The Regular Trustees may specify
that any written ballot submitted to the Holders for the purpose of
taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder may authorize any Person to act for it by
proxy on all matters in which a Holder is entitled to participate,
including waiving notice of any meeting, or voting or participating at
a meeting. No proxy shall be valid after the expiration of 11 months
from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder executing it.
Except as otherwise provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and
judicial interpretations thereunder, as if the Trust were a Delaware
corporation and the Holders were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders shall be conducted by the
Regular Trustees or by such other Person that the Regular Trustees may
designate; and
(iv) unless the Statutory Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Preferred Securities are then listed
or trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings
of Holders, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders, waiver of
any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Institutional
Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a corporation with trust powers, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, with corporate power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. This Declaration has been duly
executed and delivered by the Institutional Trustee, and constitutes the legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
- 44 -
(c) the execution, delivery and performance of this Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee;
(d) no consent, approval or authorization of, or registration with or
notice to, any State or federal banking authority having jurisdiction over the
trust powers of the Institutional Trustee is required for the execution,
delivery or performance by the Institutional Trustee, of this Declaration; and
(e) the Institutional Trustee satisfies the qualifications set forth in
Section 5.3(a).
Section 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee is a corporation with trust powers, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, with corporate power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Trust Agreement and this Declaration. The Declaration under Delaware
law constitutes a legal, valid and binding obligation of the Delaware Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority having jurisdiction over the
trust powers of the Delaware Trustee is required for the execution, delivery or
performance by the Delaware Trustee, of this Declaration; and
(d) the Delaware Trustee satisfies the qualifications set forth in
Section 5.2.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Trustees and the Holders):
MFH Financial Trust [ ]
c/o Municipal Mortgage & Equity, LLC
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Phone:
- 45 -
Fax:
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as the Delaware Trustee may give notice of to the
Trustees and the Holders):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Phone:
Fax:
(c) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders):
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Phone:
Fax:
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trustees and the Trust):
Midland Financial Holdings, Inc.
c/o Municipal Mortgage & Equity, LLC
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Phone:
Fax:
(e) if given to the Debenture Guarantor, at the mailing address set
forth below (or such other address as the Debenture Guarantor may give notice to
the Trustees and the Trust):
Municipal Mortgage & Equity, LLC
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Phone:
Fax:
(f) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given,
- 46 -
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 14.2 Governing Law.
THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
Section 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
Section 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 14.7 Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
__________________________________________
Xxxxxxx X. Xxxxxxx, as Regular Trustee
__________________________________________
Xxxxxxx X. Xxxxxxxx, as Regular Trustee
__________________________________________
Xxxx X. Xxxxxx, as Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
By: ______________________________________
Name:
Title: Authorized Signatory
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: ______________________________________
Name:
Title: Authorized Signatory
MIDLAND FINANCIAL HOLDINGS, INC., as
Sponsor [and Debenture Issuer]
By: ______________________________________
Name:
Title:
MUNICIPAL MORTGAGE & EQUITY, LLC.,
as Debenture Guarantor
By: ______________________________________
Name:
Title:
ANNEX I
TERMS OF [ _ ] PREFERRED SECURITIES
TERMS OF [ _ ] COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Trust Agreement,
dated as of [ _ ] (as amended from time to time, the "Declaration"), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Securities are set out below (each capitalized term used but
not defined herein has the meaning set forth in the Declaration or, if not
defined in the Declaration, as defined in the Prospectus):
1. Designation and Number.
(a) Preferred Securities. Up to [ _ ] Preferred Securities of the Trust
with an aggregate stated liquidation amount with respect to the assets of the
Trust of up to [ _ ] and a stated liquidation amount with respect to the assets
of the Trust of [ _ ] per preferred security, are hereby designated for the
purposes of identification only as [ _ ] Preferred Securities (the "Preferred
Securities"). The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form of Exhibit A-1 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice or to conform to the rules of any
stock exchange on which the Preferred Securities are listed.
(b) Common Securities. Up to [ _ ] Common Securities of the Trust with
an aggregate stated liquidation amount with respect to the assets of the Trust
of up to [ _ ] and a stated liquidation amount with respect to the assets of the
Trust of [ _ ] per common security, are hereby designated for the purposes of
identification only as [ _ ] Common Securities (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
(c) The Preferred Securities and the Common Securities represent
undivided beneficial interests in the assets of the Trust.
(d) In connection with the purchase of the Securities, the Debenture
Issuer will deposit in the Trust, and the Trust will purchase, respectively, as
trust assets, Debentures of the Debenture Issuer having an aggregate principal
amount of up to [ _ ], and bearing interest at an annual rate equal to the
annual Distribution rate on the Preferred Securities and Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and Common Securities.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of [-%] (the "Coupon Rate") of the stated liquidation amount of [ _ ] per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate
("Compound Interest") (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest (including Additional Interest and Compound Interest) payable unless
otherwise stated. A Distribution will be made by the Institutional Trustee only
to the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Trust has funds available in the
Institutional Trustee Account. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day
A-1
months, and for any period shorter than a full quarterly Distribution period for
which Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per calendar month (but not to exceed 30 days
in any month).
(b) Distributions on the Securities will be cumulative, will accrue
from [ _ ] and, except as otherwise described below, will be payable quarterly
in arrears, on [ _ ], [ _ ] , [ _ ] and [ _ ] of each year, commencing on [ _ ]
when, as and if available for payment, except as otherwise described below
(each, a "Distribution Payment Date"). So long as the Debenture Issuer shall not
be in default in the payment of interest on the Debentures, the Debenture Issuer
has the right under the Indenture to defer payments of interest on the
Debentures by extending the interest payment period from time to time on the
Debentures for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, provided that no Extension Period shall last beyond
the Stated Maturity of the Debentures. As a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly (to the
extent permitted by applicable law) during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period, together with
all such previous and further extensions thereof, may not exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Debentures. Any interest
accrued on the Debentures during an Extension Period shall be paid Pro Rata to
holders of Debentures on the first payment date following the Extension Period
and the Payment Amount shall be paid Pro Rata to the Holders on the first
Distribution Payment Date following the Extension Period. Upon the termination
of any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
In the event that the Debenture Issuer exercises this right, then (i) neither
the Debenture Issuer nor the Debenture Guarantor shall declare or pay any
dividend on, make any distribution relating to, or redeem, purchase, acquire, or
make a liquidation payment relating to, any of its capital stock or make any
guarantee payments with respect thereto (other than (a) repurchases, redemptions
or other acquisitions of shares of capital stock of the Debenture [Issuer AND
Guarantor] in connection with the satisfaction by the Debenture [Issuer AND
Guarantor] of its obligations under any employee benefit plans or any other
contractual obligation of the Debenture [Issuer AND Guarantor] (other than a
contractual obligation ranking pari passu with or junior to the Debentures), (b)
as a result of a reclassification of the capital stock of the Debenture Issuer
or the Debenture Guarantor or the exchange or conversion of one class or series
of the capital stock of the Debenture Issuer or the Debenture Guarantor for
another class or series of the capital stock of the Debenture Issuer or the
Debenture Guarantor, (c) the purchase of fractional interests in shares of the
capital stock of the Debenture Issuer or the Debenture Guarantor pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, or (d) dividends and distributions made upon the capital
stock of the Debenture Issuer or the Debenture Guarantor or rights to acquire
that capital stock with the Debenture Issuer's or Debenture Guarantor's capital
stock or rights to acquire that capital stock), (ii) the Debenture Issuer and
the Debenture Guarantor shall not make any payment of interest, principal or
premium, if any, on, or repay, repurchase or redeem any debt securities issued
by the Debenture Issuer or the Debenture Guarantor that rank pari passu with or
junior to such Debentures and (iii) the Debenture Issuer and the Debenture
Guarantor shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Preferred Securities Guarantee or the guarantee
under the Indenture).
(c) Distributions on the Securities will be payable promptly by the
Institutional Trustee upon receipt of immediately available funds to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which will be, as long as the Preferred Securities remain in
book-entry form, one Business Day prior to the relevant payment date and, in the
event the Preferred Securities are not in book-entry form, the [ _ ], [ _ ], [ _
] and [ _ ] next preceding each payment date. The record dates and distribution
dates shall be the same as the record dates and payment dates on the Debentures.
A-2
Distributions payable on any Securities that are not punctually paid on any
Distribution Payment Date, as a result of the Debenture Issuer (or the Debenture
Guarantor on its behalf) having failed to make the corresponding interest
payment on the Debentures, will forthwith cease to be payable to the Person in
whose name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date established by the Regular
Trustees, which record date shall correspond to the special record date or other
specified date determined in accordance with the Indenture; provided, however,
that Distributions shall not be considered payable on any Distribution Payment
Date falling within an Extension Period unless the Debenture Issuer (or the
Debenture Guarantor on its behalf) has elected to make a full or partial payment
of interest accrued on the Debentures on such Distribution Payment Date.
Distributions on the Securities will be paid by the Trust. All Distributions
paid with respect to the Securities shall be paid on a Pro Rata basis to Holders
thereof entitled thereto. If any date on which Distributions are payable on the
Securities is not a Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) If at any time while the Institutional Trustee is the Holder of any
Debentures, the Trust or the Institutional Trustee is required to pay any 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 such case, the Debenture Issuer (or the Debenture Guarantor on its
behalf) will pay as additional interest ("Additional Interest") on the
Debentures held by the Institutional Trustee, such amounts as shall be required
so that the net amounts received and retained by the Trust and the Institutional
Trustee after paying any such taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust and the Institutional Trustee
would have received had no such taxes, duties, assessments or other governmental
charges been imposed.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata among the Holders.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution (except with
respect to Sections 8.1(a)(v), 8.1(a)(vi) and 8.1(a)(vii) of the Declaration) of
the Trust (each a "Liquidation"), the Holders on the date of the Liquidation
will be entitled to receive Pro Rata out of the assets of the Trust available
for distribution to Holders after satisfaction of liabilities of creditors
distributions in an amount equal to the aggregate of the stated liquidation
amount of [ _ ] per Security plus accrued and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"), unless,
in connection with such Liquidation, Debentures in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of such Securities, with
an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
Securities, shall be distributed on a Pro Rata basis to the Holders in exchange
for such Securities.
4. Redemption and Distribution.
(a) Redemption of the Securities will occur simultaneously with any
repayment of the Debentures. The Debentures will mature on [ _ ] (the "Stated
Maturity"), and are prepayable as set forth in this Section 4. Upon the
repayment of the Debentures in whole or in part, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall be simultaneously
applied to redeem Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the
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Debentures so repaid or redeemed at the Redemption Price. Securities redeemed
upon maturity of the Debentures will be redeemed at a redemption price of [ _ ]
per Security plus an amount equal to accrued and unpaid Distributions thereon at
the date of redemption, payable in cash (the "Redemption Price"). If fewer than
all the outstanding Securities are to be so redeemed, the Securities will be
redeemed Pro Rata and the Preferred Securities to be redeemed will be as
described in Section 4(f)(ii) below.
(b) The Debentures are prepayable prior to the Stated Maturity at the
option of the Debenture Issuer (i) in whole or in part, from time to time, on or
after [ _ ] or (ii) at any time prior to [ _ ], in whole but not in part, upon
the occurrence and continuation of a Special Event, in either case at a
prepayment price (the "Prepayment Price") equal to 100% of the principal amount
thereof, plus accrued and unpaid interest thereon (including Additional Interest
and Compound Interest, if any) to the date of prepayment.
(c) The following terms used herein shall be defined as follows:
"Investment Company Event" means that the Debenture Issuer shall have
received an opinion of independent legal counsel experienced in such matters 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, courts, governmental agency or regulatory authority on or
after the date of original issuance of the preferred securities by the Trust,
the Trust is or will be considered an "investment company" that is required to
be registered under the Investment Company Act.
"Special Event" means a Tax Event or an Investment Company Event, as
the case may be.
"Tax Event" means that the Regular Trustees and the Institutional
Trustee shall have received an opinion of a nationally recognized independent
tax counsel experienced in such matters to the effect that, as a result of (a)
any amendment to, or change (including any announced prospective change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein or (b) any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of the original
issuance of the Securities, there is more than an insubstantial risk that (i)
the Trust is, or will be within 90 days of the date of such opinion, subject to
United States federal income tax with respect to income received or accrued on
the Debentures, (ii) interest payable on the Debentures is not, or within 90
days of the date thereof will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes or (iii) the Trust is, or
will be within 90 days of the date thereof, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(e) The Debenture Issuer will have the right at any time to dissolve
the Trust and, after satisfaction of liabilities to creditors of the Trust, if
any, cause the Debentures to be distributed to the Holders. If the Debentures
are distributed to the Holders and the Preferred Securities are then listed on
an exchange, the Debenture Issuer will use its best efforts to cause the
Debentures to be listed on the NYSE or on such other exchange as the Preferred
Securities are then listed.
On the date fixed for any distribution of Debentures upon dissolution
of the Trust, (i) the Preferred Securities will no longer be deemed to be
outstanding, (ii) the Depository Institution or its nominee, as the record
holder of the Preferred Securities, will receive a registered global certificate
or certificates representing the Debentures to be delivered upon such
distribution and (iii) any certificates
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representing Preferred Securities not held by the Depository Institution or its
nominee will be deemed to represent Debentures having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accrued and unpaid distributions on, such Preferred Securities until
such certificates are presented to the Debenture Issuer or its agent for
transfer or reissuance.
(f) The following procedures apply to a Redemption or Distribution of
the Debentures.
(i) Notice of any redemption of the Debentures, or notice
of distribution of Debentures in exchange for the
Securities (a "Redemption/Distribution Notice") will
be given by the Trust by mail to each Holder of
Securities to be redeemed or exchanged not fewer than
30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on
which notices are given pursuant to this Section
4(f)(i), a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is first
mailed by first-class mail, postage prepaid, to
Holders. Each Redemption/Distribution Notice shall be
addressed to the Holders at the address of each such
Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of
the redemption or exchange proceedings with respect
to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be
redeemed shall be redeemed Pro Rata from each Holder,
it being understood that, in respect of Preferred
Securities registered in the name of and held of
record by the Depository Institution or its nominee,
the distribution of the proceeds of such redemption
will be made to each Depository Institution
Participant (or Person on whose behalf such nominee
holds such securities) in accordance with the
procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, which notice may
only be issued if the Debentures are redeemed as set
out in this Section 4 (which notice will be
irrevocable), then by 10:00 a.m., New York City time,
on the redemption date, the Debenture Issuer will
deposit with one or more paying agents an amount of
money sufficient to redeem on the redemption date all
the Securities so called for redemption at the
Redemption Price. If a Redemption/Distribution Notice
shall have been given and funds deposited as
required, if applicable, then immediately prior to
the close of business on the date of such deposit, or
on the redemption date, as applicable, distributions
will cease to accrue on the Securities so called for
redemption and all rights of Holders of such
Securities so called for redemption will cease,
except the right of the Holders of such Securities to
receive the Redemption Price, but without interest on
such Redemption Price. On presentation and surrender
of such Securities at a place of payment specified in
said notice, the said Securities or the specified
portions thereof shall be paid and redeemed by the
Trust at the Redemption Price. Neither the Regular
Trustees nor the Trust shall be required to register
or cause to be registered the transfer of any
Securities that have been so called for redemption.
If any date fixed for redemption of Securities is not
a Business Day, then payment of the Redemption Price
payable on such date will
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be made on the next succeeding day that is a Business
Day (and without any interest or other payment in
respect of any such delay) except that, if such
Business Day falls in the next calendar year, such
payment will be made on the immediately preceding
Business Day, in each case with the same force and
effect as if made on such date fixed for redemption.
If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not
paid either by the Institutional Trustee or by the
Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such
Securities will continue to accrue from the original
redemption date to the actual date of payment, in
which case the actual payment date will be considered
the date fixed for redemption for purposes of
calculating the Redemption Price.
(iv) The Trust shall not be required to (i) issue, or
register the transfer or exchange of, any Securities
during a period beginning at the opening of business
15 days before the mailing of a notice of redemption
of Securities and ending at the close of business on
the day of the mailing of the relevant notice of
redemption and (ii) register the transfer or exchange
of any Securities so selected for redemption, in
whole or in part, except the unredeemed portion of
any Securities being redeemed in part.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) Subject to the requirements set forth in the immediately following
paragraph, the Holders of a majority in aggregate liquidation amount of the
Preferred Securities, voting separately as a class, have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Institutional Trustee, or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available to it under the Indenture as holder of the
Debentures, (ii) waive any past Event of Default and its consequences that is
waivable under Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable or (iv) consent to any amendment, modification or termination of
the Indenture or the Debentures where such consent shall be required; provided,
however, that, where a consent or action under the Indenture would require the
consent or act of a Super Majority, only the Holders of at least such Super
Majority in aggregate liquidation amount of the Preferred Securities may direct
the Institutional Trustee to give such consent or take such action; and provided
further, that where a consent or action under the Indenture is only effective
against each holder of Debentures who has consented thereto, such consent or
action will only be effective against a Holder of Preferred Securities who
directs the Institutional Trustee to give such consent or take such action. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. If the
Institutional Trustee fails to enforce its rights under the Debentures after a
holder of record of Preferred Securities has made a written request, to the
fullest extent permitted by law, such holder of record of Preferred Securities
may institute a legal proceeding directly against the Debenture Issuer to
enforce the Institutional Trustee's rights under the Debentures without first
instituting any legal
A-6
proceeding against the Institutional Trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
(or the Debenture Guarantor on its behalf) 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), then a Holder of Preferred
Securities may institute a Direct Action for enforcement of payment to such
Holder of the principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder on or after the respective due date specified in the Debentures.
Notwithstanding any payments made to such Holder of Preferred Securities by the
Debenture Issuer in connection with a Direct Action, the Debenture Issuer shall
remain obligated to pay the principal of or interest on the Debentures held by
the Trust or the Institutional Trustee of the Trust, and the Debenture Issuer
shall be subrogated to the rights of the Holder of such Preferred Securities
with respect to payments on the Preferred Securities to the extent of any
payments made by the Debenture Issuer to such Holder in any Direct Action.
Except as provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Institutional Trustee shall not take
any of the actions described in clauses (i) through (iv) above unless the
Institutional Trustee has obtained an opinion of a nationally-recognized tax
counsel experienced in such matters to the effect that, as a result of such
action, the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote to be
mailed to each Holder of record of Preferred Securities. Each such notice will
include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies.
No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
Holders of the Preferred Securities will have no rights to appoint or
remove the Trustees, who may be appointed, removed or replaced solely by the
Sponsor, as Holder of all of the Common Securities; provided, however, that if
an Event of Default shall have occurred and be continuing, the Institutional
Trustee and the Delaware Trustee may be removed by the vote of a Majority in
liquidation amount of the Preferred Securities voting as a class at a meeting of
the Holders of the Preferred Securities.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), (c) and 7 and as otherwise
required by law and the Declaration, the Holders of the Common Securities will
have no voting rights.
A-7
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the Event
of Default with respect to the Preferred Securities has been cured, waived, or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the Debt
Trustee, or exercising any trust or power conferred on the Debt Trustee with
respect to the Debentures, (ii) waive any past default and its consequences that
is waivable under Section 5.07 of the Indenture or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable; provided that, where a consent or action under the Indenture
would require the consent or act of a Super Majority of holders of Debentures
affected thereby the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding; and
provided further, that where a consent or action under the Indenture would
require the consent or action of each holder of Debentures, each Holder of
Preferred Securities must direct the Institutional Trustee to give such consent
or take such action. Pursuant to this Section 6(c), the Institutional Trustee
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities. Except with respect to directing the time,
method and place of conducting a proceeding for a remedy, the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Common Securities under this paragraph unless the Institutional
Trustee has received an opinion of a nationally recognized tax counsel
experienced in such matters to the effect that, as a result of such action, the
Trust will not fail to be classified as a grantor trust for United States
federal income tax purposes. If the Institutional Trustee fails to enforce its
rights under the Declaration, to the fullest extent permitted by law, any Holder
of Common Securities may institute a legal proceeding directly against any
Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust. The Regular
Trustees will cause a notice of any meeting at which Holders of Common
Securities are entitled to vote to be mailed to each Holder of record of Common
Securities. Each such notice will include a statement setting forth (i) the date
of such meeting, (ii) a description of any resolution proposed for adoption at
such meeting on which such Holders are entitled to vote and (iii) instructions
for the delivery of proxies.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding
A-8
Securities voting together as a single class will be entitled to vote on such
amendment or proposal (but not on any other amendment or proposal) and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in liquidation amount of the Securities affected
thereby, provided that, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional Trustee, as the
holder of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination on the Indenture, the Institutional
Trustee shall request the written direction of the Holders of the Securities
with respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a Majority
in liquidation amount of the Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of a Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding; and
provided, further, that where a consent or action under the Indenture is only
effective against each holder of Debentures who has consented thereto, such
consent or action will only be effective against a holder of Preferred
Securities who directs the Institutional Trustee to give such consent or take
such action; and provided, further, that the Institutional Trustee shall not
take any action in accordance with the directions of the Holders of the
Securities under this Section 7(b) unless the Institutional Trustee has obtained
an opinion of a nationally recognized tax counsel experienced in such matters to
the effect that for the purposes of United States federal income tax the Trust
will not be classified as other than a grantor trust on account of such action.
(c) Notwithstanding the foregoing, no amendment or modification may be
made to the Declaration if such amendment or modification would (i) cause the
Trust to be classified for purposes of United States federal income taxation as
other than a grantor trust, (ii) reduce or otherwise adversely affect the powers
of the Institutional Trustee or (iii) cause the Trust to be deemed an
"investment company" which is required to be registered under the Investment
Company Act.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
according to the aggregate stated liquidation amount of the Securities held by
the relevant Holder in relation to the aggregate stated liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate stated liquidation
amount of Preferred Securities held by the relevant Holder relative to the
aggregate stated liquidation amount of all Preferred Securities outstanding, and
only after satisfaction of all amounts owed to the Holders of the Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate stated liquidation amount of Common Securities held by the relevant
Holder relative to the aggregate stated liquidation amount of all Common
Securities outstanding.
9. Ranking.
The Preferred Securities rank pari passu, and payment thereon shall be
made Pro Rata, with the Common Securities except that, where an Event of Default
occurs and is continuing, the rights of Holders
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of the Common Securities to receive payment of periodic Distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the Holders of the Preferred Securities.
10. Listing.
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the NYSE.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein, and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders shall have no preemptive or similar rights to subscribe for any
additional Securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate)
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
X-00
XXXXXXX X-0
IF THE PREFERRED SECURITY IS A GLOBAL CERTIFICATE, INSERT-[THIS PREFERRED
SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION OF TRUST
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITORY") OR A NOMINEE OF THE DEPOSITORY. THIS PREFERRED
SECURITY IS EXCHANGEABLE FOR PREFERRED SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE DECLARATION OF TRUST AND NO TRANSFER OF THIS
PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE
BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THE PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL BECAUSE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
FORM OF PREFERRED SECURITY CERTIFICATE
Certificate Number [ ] Number of Preferred Securities [ ] CUSIP No. [ ]
Certificate Evidencing Preferred Securities
of
MFH FINANCIAL TRUST [ _ ]
[-%] Trust Preferred Securities
(liquidation amount [$-] per Preferred Security)
MFH FINANCIAL TRUST [ _ ], a statutory trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ______________ (the
"Holder") is the registered owner of _______ preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the [-%] Trust Preferred Securities (liquidation amount [$-] per
Preferred Security) (the "Preferred Securities"). The Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Trust Agreement of the Trust dated as of
[ _ ], as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Preferred Securities as set forth
in Annex I to the Declaration. Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration. The Holder is entitled to
the benefits of the Preferred Securities Guarantee to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
A1-1
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
In addition, the Holder is deemed to have (i) agreed to the terms of
the Indenture and the Debentures, including that the Debentures are subordinate
and junior in right of payment to all present and future Senior Indebtedness and
Other Financial Obligations (as defined in the Indenture) as and to the extent
provided in the Indenture and (ii) agreed to the terms of the Preferred
Securities Guarantee, including that the Preferred Securities Guarantee is
subordinate and junior in right of payment to all other liabilities of the
Sponsor, including the Debentures, except those made pari passu or subordinate
by their terms, and pari passu with the most senior preferred or preference
stock now or hereafter issued by the Sponsor and with any guarantee now or
hereafter entered into by the Sponsor in respect of any preferred or preference
stock of any Affiliate of the Sponsor.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
Unless the Institutional Trustee's Certificate of Authentication hereon
has been properly executed, these Preferred Securities shall not be entitled to
any benefit under the Declaration or be valid or obligatory for any purpose.
A1-2
IN WITNESS WHEREOF, the Trust has executed this certificate.
MFH FINANCIAL TRUST [___]
By: ______________________________________
Name:
Title: Regular Trustee
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
dated _____________, ________
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: ______________________________________
Authorized Signatory
A1-3
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed at a
rate per annum of [-%] (the "Coupon Rate") of the stated liquidation amount of
[$-] per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate ("Compound Interest") (to the extent permitted by applicable law).
The term "Distributions" as used herein includes such cash distributions and any
such interest (including Additional Interest and Compound Interest) payable
unless otherwise stated. A Distribution will be made by the Institutional
Trustee only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available in the Institutional Trustee Account. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per calendar month (but not to exceed 30 days in
any month).
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from [ _ ] and will be payable
quarterly in arrears on [ _ ], [ _ ], [ _ ] and [ _ ] of each year, commencing
on [ _ ] to Holders of record on the relevant record dates, which will be, as
long as the Preferred Securities remain in book-entry form, one Business Day
prior to the relevant payment date and, in the event the Preferred Securities
are not in book-entry form, the [ _ ], [ _ ], [ _ ] and [ _ ] next preceding
each payment date. Such payment dates shall correspond to the interest payment
dates on the Debentures. The Debenture Issuer has the right under the Indenture
to defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding 20 consecutive quarters
(each an "Extension Period"), provided that no Extension Period shall last
beyond the date of the maturity of the Debentures and, as a consequence of such
deferral, quarterly Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity of the Debentures. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on the first record
date after the end of the Extension Period. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-4
[FORM OF ASSIGNMENT]
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
_______________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ______________________________________
Signature: _________________________________
(Sign exactly as your name appears
on the other side of this Preferred
Security Certificate)
(Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Trustee, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Trustee in addition to or in substitution for STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
X0-0
XXXXXXX X-0
XXXX XX XXXXXX SECURITY CERTIFICATE
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH
SECTION 9.1 OF THE DECLARATION OF TRUST
Certificate Number [ ] Number of Common Securities [ ]
Certificate Evidencing Common Securities
of
MFH FINANCIAL TRUST [___]
[___%] Common Securities
(liquidation amount [$___] per Common Security)
MFH FINANCIAL TRUST [ _ ], a statutory trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Midland Financial
Holdings, Inc. (the "Holder") is the registered owner of _______ common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the [-%] Common Securities (liquidation amount
[$-] per Common Security) (the "Common Securities"). Except as provided in the
Declaration, the Common Securities are not transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of [ _ ], as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Common Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the Common
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
In addition, the Holder is deemed to have (i) agreed to the terms of
the Indenture and the Debentures, including that the Debentures are subordinate
and junior in right of payment to all present and future Senior Indebtedness and
Other Financial Obligations (as defined in the Indenture) as and to the extent
provided in the Indenture and (ii) agreed to the terms of the Common Securities
Guarantee, including that the Common Securities Guarantee is subordinate and
junior in right of payment to all other liabilities of the Sponsor, including
the Debentures, except those made pari passu or subordinate by their terms, and
pari passu with the most senior preferred or preference stock now or hereafter
issued by the Sponsor and with any guarantee now or hereafter entered into by
the Sponsor in respect of any preferred or preference stock of any Affiliate of
the Sponsor.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
A2-1
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of __________.
MFH FINANCIAL TRUST [___]
By: ____________________________________
Name:
Title: Regular Trustee
A2-2
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum of [-%] (the "Coupon Rate") of the stated liquidation amount of [$-]
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate ("Compound Interest") (to the extent permitted by applicable law).
The term "Distributions" as used herein includes such cash distributions and any
such interest (including Additional Interest and Compound Interest) payable
unless otherwise stated. A Distribution will be made by the Institutional
Trustee only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available in the Institutional Trustee Account. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per calendar month (but not to exceed 30 days in
any month).
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from [ _ ] and will be payable
quarterly in arrears, on [ _ ], [ _ ], [ _ ] and [ _ ] of each year, commencing
on [ _ ] to Holders of record on the relevant record dates, which will be, as
long as the Preferred Securities remain in book-entry form, one Business Day
prior to the relevant payment date and, in the event the Preferred Securities
are not in book-entry form, the [ _ ], [ _ ], [ _ ] and [ _ ] next preceding
each payment date. Such payment dates shall correspond to the interest payment
dates on the Debentures. The Debenture Issuer has the right under the Indenture
to defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding 20 consecutive quarters
(each an "Extension Period"), provided that no Extension Period shall last
beyond the date of the maturity of the Debentures and, as a consequence of such
deferral, quarterly Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity date of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-3
[FORM OF ASSIGNMENT]
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Common Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: ______________________________________
Signature: _________________________________
(Sign exactly as your name appears
on the other side of this Common
Security Certificate)
(Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Trustee, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Trustee in addition to or in substitution for STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
A2-4
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
EXHIBIT C
UNDERWRITING AGREEMENT
