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EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE
between
MBNA CORPORATION
and
THE BANK OF NEW YORK
Dated as of June 27, 2002
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Table of Contents
Page
ARTICLE I Defined Terms...................................................1
Section 1.1. Definitions.......................................1
ARTICLE II General Terms And Conditions of The Debentures.................4
Section 2.1. Designation And Principal Amount..................4
Section 2.2. Maturity..........................................4
Section 2.3. Form And Payment..................................4
Section 2.4. Global Debenture..................................5
Section 2.5. Interest..........................................6
ARTICLE III Redemption of The Debentures..................................7
Section 3.1. Tax Event Redemption..............................7
Section 3.2. Capital Treatment Event of Redemption.............7
Section 3.3. Investment Company Event of Redemption............7
Section 3.4. Optional Redemption By Company....................8
Section 3.5. No Sinking Fund...................................8
ARTICLE IV Extension of Interest Payment Period...........................8
Section 4.1. Extension of Interest Payment Period..............8
Section 4.2. Notice of Extension...............................9
ARTICLE V Expenses........................................................9
Section 5.1. Payment of Expenses...............................9
ARTICLE VI Form of Debenture..............................................9
Section 6.1. Form of Debenture.................................9
ARTICLE VII Original Issue of Debentures.................................10
Section 7.1. Original Issue of Debentures.....................10
ARTICLE VIII Covenants...................................................10
Section 8.1. Limitation On Dividends..........................10
Section 8.2. Covenants As To The Trust........................11
ARTICLE IX Miscellaneous.................................................11
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Section 9.1. Ratification of Indenture........................11
Section 9.2. Acknowledgment of Rights.........................11
Section 9.3. Trustee Not Responsible For Recitals.............12
Section 9.4. Governing Law....................................12
Section 9.5. Separability.....................................12
Section 9.6. Counterparts.....................................12
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FIRST SUPPLEMENTAL INDENTURE, dated as of June 27, 2002 (the "First
Supplemental Indenture"), between MBNA Corporation, a Maryland corporation
(the "Company"), and The Bank of New York, a New York banking corporation, as
trustee (the "Trustee"), under the Indenture dated as of December 18, 1996
between the Company and the Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered
as provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its 8.125% Junior Subordinated Debentures, Series D, due 2032 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this First Supplemental Indenture;
WHEREAS, MBNA Capital D, a Delaware statutory business trust (the
"Trust"), has offered to the public $300,000,000 aggregate liquidation amount
of its 8.125% Trust Preferred Securities (TruPS(R)), Series D (the "Preferred
Securities"), representing beneficial ownership interests in the assets of the
Trust, and proposes to invest the proceeds from such offering, together with
the proceeds of the issuance and sale by the Trust to the Company of
$9,278,375 aggregate liquidation amount of its Common Securities, in the
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture pursuant to Sections 2.1, 3.1 and
9.1 of the Indenture and all requirements necessary to make this First
Supplemental Indenture a valid and binding instrument in accordance with its
terms, and to make the Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid and binding obligations
of the Company, have been performed, and the execution and delivery of this
First Supplemental Indenture has been duly authorized in all respects:
NOW THEREFORE, in consideration of the purchase of the Debentures by
the Holders thereof, and for the purpose of setting forth, as provided in the
Indenture, the form and substance of the Debentures and the additional terms,
provisions and conditions thereof, the Company covenants and agrees with the
Trustee as follows:
ARTICLE I
DEFINED TERMS Section 1.1. Definitions.
Unless the context otherwise requires:
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(a) a term defined in the Indenture has the same meaning when used
in this First Supplemental Indenture;
(b) a term defined anywhere in this First Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) a reference to a Section or Article is to a Section or Article
of this First Supplemental Indenture;
(e) headings are for convenience of reference only and do not affect
interpretation;
(f) the following terms have the meanings given to them in the Trust
Agreement: Administrative Trustee; Business Day; Clearing Agency; Common
Security; Delaware Trustee; Direct Action; Distributions; Federal Reserve;
Guarantee Preferred Security; Preferred Securities Certificate; Payment
Account; and Underwriting Agreement;
(g) the following terms have the meanings given to them in this
Section 1.1(g):
"Additional Interest" shall have the meaning set forth in Section
2.5(e).
"Capital Treatment Event" means the reasonable determination by the
Company that, as a result of (i) any amendment to, or change (including any
announced proposed change) in, the laws or regulations of the United States or
any political subdivision thereof or therein or other governmental agency or
regulatory authority, or (ii) any official administrative pronouncement or
action or judicial decision interpreting or applying such laws or regulations,
which, in the case of either clause (i) or (ii) is effective or is announced
on or after the date of issuance of the Preferred Securities, there is more
than an insubstantial risk that the Company will not be entitled to treat an
amount equal to the liquidation amount of the Preferred Securities as "Tier 1
Capital" (or the then equivalent thereof) under the risk-based capital
adequacy guidelines of the Federal Reserve, as then in effect and applicable
to the Company.
"Change in Investment Company Act Law" shall have the meaning set
forth in the definition of "Investment Company Event."
"Compounded Interest" shall have the meaning set forth in Section
4.1.
"Debentures" shall have the meaning set forth in the preamble of this
First Supplemental Indenture.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Depositary", with respect to the Debentures, means The Depository
Trust Company or such other successor Clearing Agency for the Preferred
Securities.
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"Dissolution Event" means the liquidation of the Trust pursuant to
the Trust Agreement and the distribution of the Debentures held by the
Property Trustee to the holders of the Trust Securities issued by the Trust
pro rata in accordance with the Trust Agreement.
"Extension Period" shall have the meaning set forth in Section 4.1.
"Global Debenture" shall have the meaning set forth in Section
2.4(a)(i).
"Interest Payment Date" shall have the meaning set forth in Section
2.5(d).
"Interest Period" means each period beginning on, and including, June
27, 2002, and ending on, but excluding, the first Interest Payment Date, and
each successive period beginning on, and including, an Interest Payment Date
and ending on, but excluding, the next succeeding Interest Payment Date.
"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.
"Investment Company Event" means that the Trust or the Company shall
have received an Opinion of Counsel which states that, as a result of the
occurrence of an amendment to, or change (including any announced proposed
change) in, the laws or regulations of the United States or any political
subdivision thereof or therein or any other governmental agency or regulatory
authority (a "Change in Investment Company Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an Investment
Company which is required to be registered under the Investment Company Act,
which Change in Investment Company Act Law becomes effective on or after the
date of issuance of the Preferred Securities.
"Maturity Date" shall mean October 1, 2032.
"Non Book-Entry Preferred Securities" shall have the meaning set
forth in Section 2.4(a)(ii).
"Paying Agent" shall mean the Trustee or any Person authorized by the
Trustee to calculate the amount of interest payable on the Debentures in
respect of each Interest Period.
"Redemption Price" shall mean, with respect to any redemption of the
Debentures pursuant to Article III hereof, an amount in cash equal to 100% of
the principal amount of Debentures to be redeemed plus any accrued and unpaid
interest thereon, including Compounded Interest and Additional Interest, if
any, to, but excluding, the date of such redemption.
"Security Registrar" shall have the meaning set forth in Section 2.3.
"Tax Event" means the receipt by the Trust or the Company of an
Opinion of Counsel to the effect that, as a result of (i) any amendment to, or
change (including any announced proposed change) in, the laws or regulations
of the United States or any political subdivision or taxing
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authority thereof or therein, or (ii) any official administrative
pronouncement or action or judicial decision interpreting or applying such
laws or regulations, which change or amendment is enacted or becomes
effective, or which proposed change, pronouncement, action or decision is
announced or occurs, on or after the date of issuance of the Preferred
Securities, there is more than an insubstantial risk that (A) the Trust is, or
within 90 days after the date of such Opinion of Counsel will be, subject to
United States federal income tax with respect to interest accrued or received
on the Debentures, (B) interest payable by the Company on the Debentures is
not, or within 90 days after the date of such Opinion of Counsel, will not be,
deductible by the Company, in whole or in part, for United States federal
income tax purposes or (C) the Trust is, or within 90 days after the date of
such Opinion of Counsel will be, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Trust" shall have the meaning set forth in the preamble of this
First Supplemental Indenture.
"Trust Agreement" means the Amended and Restated Trust Agreement
among MBNA Corporation, as Depositor, The Bank of New York, as Property
Trustee, The Bank of New York (Delaware), as Delaware Trustee, The
Administrative Trustees named therein, and the Several Holders (as defined
therein), dated as of June 27, 2002, as amended from time to time.
"Trust Securities" shall mean the Preferred Securities and the Common
Securities, collectively.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
Section 2.1. Designation And Principal Amount.
There is hereby authorized a series of Securities designated the
"8.125% Junior Subordinated Debentures, Series D, due 2032" limited in
aggregate principal amount to $309,278,375 which amount shall be as set forth
in any written order of the Company for the authentication and delivery of
Debentures pursuant to Section 3.3 of the Indenture.
Section 2.2. Maturity.
The Maturity Date (which shall constitute the Stated Maturity of the
Debentures for purposes of the Indenture) shall be the date on which the
Debentures mature and on which the principal thereof shall be due and payable
together with all accrued and unpaid interest thereon (including Compounded
Interest and Additional Interest, if any).
Section 2.3. Form And Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons. Principal of,
premium, if any, and interest on (including Compounded Interest and Additional
Interest, if any) the Debentures issued in certificated form will be payable,
the transfer of such Debentures will be registrable and such
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Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
as set forth in the Indenture; provided, however, that payment of interest
with respect to Debentures (other than a Global Debenture) may be made at the
option of the Company (i) by check mailed to the Holder at such address as
shall appear in the Security Register or (ii) by transfer to an account
maintained by the Person entitled thereto, provided that proper transfer
instructions have been received in writing by the relevant record date. The
Company selects New York, New York as a place of payment where the principal
of, and premium, if any, and interest on the Debentures are payable as
specified in accordance herewith, and hereby appoints The Bank of New York,
the Trustee, as registrar for the Debentures (the "Security Registrar").
Notwithstanding the foregoing, so long as the Holder of any Debentures is the
Property Trustee, the payment of the principal of, premium, if any, and
interest (including Compounded Interest and Additional Interest, if any) on
such Debentures held by the Property Trustee will be made at such place and to
such account as may be designated by the Property Trustee.
Section 2.4. Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Debentures in certificated form may be presented
to the Trustee by the Property Trustee in exchange for a global
Debenture in an aggregate principal amount equal to the aggregate
principal amount of all outstanding Debentures (a "Global
Debenture"), to be registered in the name of the Depositary, or its
nominee, and delivered by the Trustee to or upon the order of the
Depositary for crediting to the accounts of its participants
pursuant to the instructions of the Administrative Trustees. The
Company upon any such presentation shall execute a Global Debenture
in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with the
Indenture. Payments on the Debentures issued as a Global Debenture
will be made to the Depositary; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Debentures in certificated form
may be presented to the Trustee by the Property Trustee and any
Preferred Security Certificate which represents Preferred Securities
other than Preferred Securities held by the Clearing Agency or its
nominee ("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in Debentures presented to the
Trustee by the Property Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of the Non Book-Entry
Preferred Securities until such Preferred Security Certificates are
presented to the Security Registrar for transfer or reissuance at
which time such Preferred Security Certificates will be cancelled
and a Debenture, registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder of
such Preferred Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate liquidation amount
of the Preferred Security Certificate cancelled, will be executed by
the Company and delivered to the Trustee for authentication and
delivery in accordance with the Indenture. Upon the issuance of such
Debentures, Debentures with an equivalent aggregate principal amount
that were presented by the Property Trustee to the Trustee will be
deemed to have been cancelled.
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(b) A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
Section 2.5. Interest.
(a) Each Debenture will bear interest at a rate of 8.125% per annum
from June 27, 2002, until the principal thereof becomes due and payable, and
on any overdue principal at a rate of 8.125% per annum and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at a rate of 8.125% per annum, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on the
1st day of January, April, July and October of each year, commencing on
October 1, 2002, to the Person in whose name such Debenture or any predecessor
Debenture is registered, at the close of business on the regular record date
for such interest installment, which, in respect of any Debentures of which
the Property Trustee is the Holder or in the case of a Global Debenture, shall
be the close of business on the Business Day next preceding that Interest
Payment Date (as defined below). Notwithstanding the foregoing sentence, if
the Debentures are no longer in book-entry only form, except if the Debentures
are held by the Property Trustee, the record dates shall be the close of
business on the December 15, March 15, June 15 and September 15 immediately
preceding the relevant Interest Payment Date, whether or not a Business Day.
(b) Unless otherwise provided by the Trustee, the Paying Agent will
calculate the amount of interest payable on the Debentures in respect of each
Interest Period. The amount of interest payable for any Interest Period will
be computed on the basis of a 360-day year consisting of twelve 30-day months
and rounding the resulting figure to the nearest cent (with one-half cent or
more being rounded upwards). The amount of interest payable for any partial
Interest Period will be computed on the basis of the actual number of days
elapsed during any such 30-day month. The determination of the amount of
interest payable by Paying Agent will (in the absence of willful default, bad
faith or manifest error) be final, conclusive and binding on all concerned.
(c) All certificates, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or obtained for
the purposes of the provisions relating to the payment and calculation of
interest on the Debentures, whether by the Trustee or Paying Agent, will (in
the absence of willful default, bad faith or manifest error) be binding on the
Trust, the Company, the Trustee and all of the holders of the Debentures, and
no liability will (in the absence of willful default, bad faith or manifest
error) attach to the Trustee or Paying Agent in connection with the exercise
or non-exercise by any of them of their powers, duties and discretion.
(d) In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which is a Business Day, 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 (each date on which
interest is actually payable, an "Interest Payment Date").
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(e) If at any time the Trust 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 the
Company will pay such Additional Interest ("Additional Interest") on the
Debentures held by the Property Trustee as shall be required so that the net
amounts received and retained by the Trust after paying such taxes, duties,
assessments or other governmental charges will be equal to the amounts the
Trust would have received had the Trust not been subject to such taxes,
duties, assessments or other government charges imposed.
(f) All percentages resulting from any calculations referred to in
this First Supplemental Indenture will be rounded, if necessary, to the
nearest multiple of 1/100 of 1% and all U.S. dollar amounts used in or
resulting from such calculations will be rounded to the nearest cent (with
one-half cent or more being rounded upwards).
ARTICLE III
REDEMPTION OF THE DEBENTURES
Section 3.1. Tax Event Redemption.
Subject to the prior approval of the Federal Reserve, if such
approval is then required under applicable law, rules, guidelines or policies,
if at any time a Tax Event shall occur and be continuing, the Company shall
have the right upon not less than 30 nor more than 60 days' notice, to redeem
the Debentures, in whole, but not in part, for cash within 90 days following
the occurrence of such Tax Event (or, if the approval of the Federal Reserve
is then required for such redemption, on such later date as promptly
practicable after such approval is obtained) at the Redemption Price.
Section 3.2. Capital Treatment Event of Redemption.
Subject to the prior approval of the Federal Reserve, if such
approval is then required under applicable law, rules, guidelines or policies,
if at any time a Capital Treatment Event shall occur and be continuing, the
Company shall have the right, upon not less than 30 nor more 60 days' notice,
to redeem the Debentures, in whole, but not in part, for cash within 90 days
following the occurrence of such Capital Treatment Event (or, if the approval
of the Federal Reserve is then required for such redemption, on such later
date as promptly as practicable after such approval is obtained) at the
Redemption Price.
Section 3.3. Investment Company Event of Redemption.
Subject to the prior approval of the Federal Reserve, if such
approval is then required under applicable law, rules, guidelines or policies,
if at any time an Investment Company Event shall occur and be continuing, the
Company shall have the right, upon not less than 30 nor more 60 days' notice,
to redeem the Debentures, in whole, but not in part, for cash within 90 days
following the occurrence of such Investment Company Event (or, if the approval
of the Federal Reserve is then required for such redemption, on such later
date as promptly as practicable after such approval is obtained) at the
Redemption Price.
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Section 3.4. Optional Redemption By Company.
(a) Subject to the prior approval of the Federal Reserve, if such
approval is then required under applicable law, rules, guidelines or policies,
the Company shall have the right to redeem the Debentures, in whole or in
part, from time to time, on or after October 1, 2007, upon not less than 30
nor more than 60 days' notice at the Redemption Price.
(b) If the Debentures are only partially redeemed pursuant to this
Section 3.4, the Debentures will be redeemed pro rata or by lot or by any
other method utilized by the Security Registrar; provided, that if at the time
of redemption the Debentures are registered as a Global Debenture, the
Depositary shall determine, in accordance with its procedures, the principal
amount of such Debentures beneficially held by each Holder of Debentures to be
redeemed.
Section 3.5. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1. Extension of Interest Payment Period.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the
term of the Debentures, to defer payments of interest on the Debentures by
extending the interest payment period of such Debentures for a period not
exceeding 20 consecutive quarterly periods (the "Extension Period"), during
which Extension Period no interest shall be due and payable; provided that no
Extension Period shall end on a date other than an Interest Payment Date or
extend beyond the Maturity Date. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of
the interest payment period pursuant to this Section 4.1, will bear interest
thereon at a rate of 8.125% per annum compounded quarterly for each quarterly
period of the Extension Period ("Compounded Interest"). At the end of the
Extension Period, the Company shall pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded Interest
(together, "Deferred Interest") that shall be payable to the Holders in whose
names the Debentures are registered in the Security Register on the record
date relating to the Interest Payment Date on which the Extension Period ends.
Before the termination of any Extension Period, the Company may further defer
payments of interest by further extending such period, provided that such
period, together with all such previous and further extensions within such
Extension Period, shall not exceed 20 consecutive quarterly periods or extend
beyond the Maturity Date of the Debentures. Upon the termination of any
Extension Period and the payment of all Deferred Interest then due, the
Company may commence a new Extension Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. The provisions of this Section 4.1 and Section 4.2
shall apply to the Debentures in lieu of Section 3.11 of the Indenture.
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Section 4.2. Notice of Extension.
(a) If the Property Trustee is the only registered Holder at the
time the Company selects an Extension Period, the Company shall give written
notice to the Administrative Trustees, the Property Trustee and the Trustee of
its selection of such Extension Period one Business Day before the earlier of
(i) the next succeeding date on which Distributions on the Trust Securities
issued by the Trust are payable, or (ii) the date the Trust is required to
give notice of the record date, or the date such Distributions are payable, to
any national securities exchange or interdealer quotation system or to holders
of the Preferred Securities issued by the Trust, but in any event at least one
Business Day before such record date.
(b) If the Property Trustee is not the only Holder at the time the
Company selects an Extension Period, the Company shall give the Holders and
the Trustee written notice of its selection of such Extension Period at least
one Business Day before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give notice of the
record or payment date of such interest payment to any national securities
exchange or interdealer quotation system or to the Holders.
(c) The quarterly period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 4.2 shall be counted as one of the 20
quarterly periods permitted in the maximum Extension Period permitted under
Section 4.1.
ARTICLE V
EXPENSES
Section 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures
to the Trust and in connection with the sale of the Trust Securities by the
Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall pay (i) all costs and expenses relating to the offering,
sale and issuance of the Debentures and the Trust Securities, (ii) the
compensation of the Trustee and (iii) all costs and expenses relating to the
organization, operation and dissolution of the Trust in accordance with the
provisions of Sections 6.7 and 10.6 of the Indenture.
ARTICLE VI
FORM OF DEBENTURE
Section 6.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms set forth in Exhibit A
hereto.
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ARTICLE VII
ORIGINAL ISSUE OF DEBENTURES
Section 7.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $309,278,375 may,
upon execution of this First Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication as provided in
Sections 3.1 and 3.3 of the Indenture.
ARTICLE VIII
COVENANTS
Section 8.1. Limitation On Dividends.
The Company will not, and will not permit any Subsidiary to, (i)
declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock, (ii) make any payment of principal of, or premium, if any, or
interest on, or repay, repurchase or redeem any debt securities of the Company
that rank pari passu with, or junior in right of payment to, the Debentures or
(iii) make any guarantee payment with respect to any guarantee by the Company
of the debt securities of any Subsidiary of the Company if such guarantee
ranks pari passu with, or junior in right of payment to, the Debentures (other
than (a) dividends, distributions, redemptions, purchases or acquisitions made
by the Company by way of issuance of its capital stock (or options, warrants
or other rights to subscribe therefor), (b) any declaration of a dividend in
connection with the implementation of a shareholder's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) the purchase of fractional interests in shares resulting from a
reclassification of the Company's capital stock, (e) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (f) purchases of Common Stock related to the issuance
of Common Stock or rights under any of the Company's benefit plans for its
directors, officers or employees and (g) obligations under any dividend
reinvestment plan or stock purchase plan of the Company), if at such time (1)
there shall have occurred any event of which the Company has actual knowledge
that with the giving of notice, or the lapse of time, or both, would
constitute an Event of Default (as defined in the Indenture) and in respect of
which the Company shall not have taken reasonable steps to cure, (2) if such
Debentures are held by the Property Trustee, the Company shall be in default
with respect to its payment obligations under the Guarantee or (3) the Company
shall have given notice of its selection of an Extension Period and shall not
have rescinded such notice or such Extension Period and such Extension Period
shall be continuing. The provisions of this Section 8.1 shall apply to the
Debentures in lieu of the first paragraph of Section 10.7 of the Indenture.
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Section 8.2. Covenants As To The Trust.
In the event Debentures are issued to the Trust or a trustee of such
trust in connection with the issuance of Trust Securities by the Trust, for so
long as such Trust Securities remain outstanding, the Company (i) will
maintain 100% direct or indirect ownership of the Common Securities of the
Trust; provided, however, that any successor of the Company, permitted
pursuant to Article X of the Indenture, may succeed to the Company's ownership
of such Common Securities, (ii) will use commercially reasonable efforts to
cause the Trust (a) to remain a grantor trust, except in connection with a
distribution of Debentures to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities of the Trust, or
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration, and (b) to otherwise continue to be classified as a grantor trust
and not an association taxable as a corporation for United States federal
income tax purposes and (iii) will not cause, as sponsor of the Trust, or
permit, as holder of the Common Securities, the dissolution, winding-up or
termination of the Trust, except in connection with a distribution of the
Debentures as provided in the Declaration and in connection with certain
mergers, consolidations or amalgamations. The provisions of this Section 8.2
shall apply to the Debentures in lieu of the second paragraph of Section 10.7
of the Indenture.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Ratification of Indenture.
The Indenture, as supplemented by this First Supplemental Indenture,
is in all respects ratified and confirmed, and this First Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the
extent herein and therein provided.
Section 9.2. Acknowledgment of Rights.
The Company acknowledges that, with respect to any Debentures held
by the Trust or a trustee thereof, if the Property Trustee of such Trust fails
to enforce its rights under this First Supplemental Indenture or the Indenture
as the Holder of the Debentures held as the assets of the Trust, any holder of
Preferred Securities may institute legal proceedings directly against the
Company to enforce such Property Trustee's rights under this First
Supplemental Indenture or the Indenture without first instituting any legal
proceedings against such Property Trustee or any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
principal of, premium, if any, or interest on the Debentures when due, the
Company acknowledges that a holder of Preferred Securities may institute a
direct action for enforcement of payment to such holder of the principal of,
premium, if any, or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such holder
on or after the respective due date specified in the Debentures.
12
Section 9.3. Trustee Not Responsible For Recitals.
The recitals contained herein and in the Debentures, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Debentures. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Debentures or the proceeds thereof.
Section 9.4. Governing Law.
THIS FIRST SUPPLEMENTAL INDENTURE AND THE DEBENTURES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
Section 9.5. Separability.
In case any provision of this First Supplemental Indenture or in the
Debentures shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 9.6. Counterparts.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
MBNA CORPORATION
By:_________________________________
Name: Xxxxxx X. Xxxx
Title: Vice President
THE BANK OF NEW YORK
as Trustee
By: _________________________________
Name:
Title:
EXHIBIT A
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - This
Debenture is a Book-Entry Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Debentures
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Debenture (other than a transfer of this Debenture as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Debenture is presented by an authorized representative of
The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the
issuer or its agent for registration of transfer, exchange or payment, and any
Debenture issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company 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 since the registered
owner hereof, Cede & Co., has an interest herein.]
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No. D-__
MBNA CORPORATION
MBNA CORPORATION, a corporation organized and existing under the laws
of the state of Maryland (hereinafter called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to, or registered assigns, the
principal sum of $309,278,375 on October 1, 2032, and to pay interest on said
principal sum from the 1st day of January, April, July and October or from the
most recent interest payment date (each such date, an "Interest Payment Date")
on which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on the January 1, April 1, July 1 and
October 1 of each year, commencing on October 1, 2002 at the rate of 8.125%
per annum until the principal hereof shall have become due and payable, plus
Additional Interest, if any, until the principal hereof is paid or duly
provided for or made available for payment and on any overdue principal and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at
the rate of 8.125% per annum, compounded quarterly. The amount of interest
payable on any Interest Payment Date (as defined above) shall be calculated as
provided in the Indenture. In the event that any date on which interest is
payable on this Debenture is not a Business Day, then payment of the interest
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 the date the payment
was originally payable. The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
the Indenture, be paid to the Person in whose name this Debenture (or one or
more Predecessor Securities, as defined in the Indenture) is registered at the
close of business on the Regular Record Date for such interest installment,
which shall be, if the Debentures are not in book entry only form, except if
the Debentures are held by the Property Trustee, the close of business on the
December 15, March 15, June 15 and September 15 immediately preceding the
relevant Interest Payment Date, whether or not a Business Day. In the case of
a Global Debenture or any Debentures of which the Property Trustee is the
Holder, such regular record date shall be the close of business on the
Business Day next preceding the applicable Interest Payment Date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such Regular Record Date and
may either be paid to the Person in whose name this Debenture (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the registered Holders not less than
10 days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange or interdealer quotation system on which the Debentures may be listed
or traded, and upon such notice as may be required by such exchange or
self-regulatory organization, all as more fully provided in the Indenture.
Payment of principal of (and premium, if any) and interest (including
Compounded Interest and Additional Interest, if any) on this Debenture will be
payable at the office or agency of the Trustee maintained for that purpose in
the United States, in any coin or currency of the
X-0
Xxxxxx Xxxxxx xx Xxxxxxx that at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company payment of interest may be made (i) by check mailed to the
Registered Holder at such address as shall appear in the Securities Register
or (ii) by wire transfer to an account designated by a Holder in writing not
less than ten days prior to the date of payment. Notwithstanding the
foregoing, so long as the Holder of this Debenture is the Property Trustee,
the payment of the principal of, premium, if any, and interest on this
Debenture will be made at the place and to the account as may be designated by
the Property Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate
the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes. Each Holder hereof, by his
acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior
Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder or creditor upon said provisions.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Debenture shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose until the Certificate of
Authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature.
THIS DEBENTURE IS NOT A SAVINGS ACCOUNT DEPOSIT OR OTHER OBLIGATION
OF ANY BANK OR A NONBANK SUBSIDIARY THEREOF, AND IS NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE FUND OR ANY OTHER
GOVERNMENTAL AGENCY.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
MBNA CORPORATION
By: ________________________
Name:
Title:
Attest:
By: ___________________________
Name:
Title:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
Date of Authentication: June 27, 2002
The Bank of New York,
as Trustee
By: ____________________________
Authorized Officer
A-4
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of debt securities
of the Company (herein called the "Debentures"), issued and to be issued in
one or more series under a Junior Subordinated Indenture, dated as of December
18, 1996, duly executed and delivered between the Company and The Bank of New
York, as Trustee (herein called the "Trustee") (the "Indenture," such term,
unless the context specifies otherwise, to include any supplement including
the First Supplemental Indenture (as defined below)), as supplemented by the
First Supplemental Indenture, dated as of June 27, 2002, between the Company
and the Trustee (the "First Supplemental Indenture"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Debentures, and of the terms upon which the Debentures are, and are to be,
authenticated and delivered. This Debenture is one of the series designated on
the face hereof and is limited in aggregate principal amount as specified in
said First Supplemental Indenture.
The Company may at any time, at its option, on or after October 1,
2007, and subject to the terms and conditions of Article XI of the Indenture
and Article III of the First Supplemental Indenture, redeem this Debenture, in
whole at any time or in part from time to time, without premium or penalty, at
a redemption price equal to 100% of the principal amount thereof plus accrued
and unpaid interest including Additional Interest, if any, to the Redemption
Date. Any redemption pursuant to this paragraph will be made upon not less
than 30 days' nor more than 60 days' notice. If the Debentures are only
partially redeemed by the Company pursuant to an Optional Redemption, the
Debentures will be redeemed pro rata or by lot or by any other method utilized
by the Security Registrar; provided that if, at the time of redemption, the
Debentures are registered as a Global Debenture, the Depositary shall
determine the principal amount of such Debentures beneficially held by each
Debenture holder to be redeemed in accordance with its procedures.
Upon the occurrence and during the continuation of a Tax Event,
Investment Company Event or a Capital Treatment Event in respect of a Trust,
the Company may, at its option, at any time within 90 days of the occurrence
of such Tax Event, Investment Company Event or Capital Treatment Event redeem
this Debenture, in whole but not in part, subject to the provisions of Article
XI of the Indenture and Article III of the First Supplemental Indenture, at a
redemption price equal to 100% of the principal amount thereof plus accrued
and unpaid interest, including Additional Interest, if any, to the Redemption
Date.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any redemption of Debentures by the
Company shall be subject to the prior approval of the Federal Reserve, if such
approval is then required under applicable law, rules, guidelines or policies
of the Federal Reserve.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration
A-5
shall become, due and payable, in the manner, with the effect and subject to
the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities of all series
affected (acting as one class), to execute supplemental indentures for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities; provided,
however, that no such supplemental indenture shall without the consent of the
Holders of the outstanding Debentures affected thereby (i) change the Maturity
Date, or reduce the rate or extend the time of payment of interest (except as
contemplated by Section 4.1 of the First Supplemental Indenture), or reduce
the principal amount thereof, or reduce any amount payable on prepayment
thereof, or make the principal thereof or any interest or premium thereon
payable in any coin or currency other than that in which any Debenture (or
premium, if any, thereon) or the interest thereon is payable according to its
terms, or impair or affect the right of any Holder to institute suit for
payment thereof; or (ii) reduce the percentage in principal amount of the
outstanding Debentures, the Holders of which are required to consent to any
such amendment to the First Supplemental Indenture; provided, however, that if
the Debentures are held by the Property Trustee of the Trust, such amendment
shall not be effective until the holders of a majority in liquidation amount
of Trust Securities shall have consented to such amendment; provided, further,
that if the consent of the Holder of each outstanding Debenture is required,
such amendment shall not be effective until each holder of the Trust
Securities shall have consented to such amendment. The Indenture also contains
provisions permitting the Holders of a majority in aggregate principal amount
of the outstanding Securities of any series affected thereby, on behalf of all
of the Holders of the Securities of such series, to waive any past default in
the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of, premium, if
any, or interest on any of the Securities of such series. Any such consent or
waiver by the registered Holder of this Debenture (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such Holder and upon
all future Holders and owners of this Debenture and of any Debenture issued in
exchange therefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Debenture at the times, place and rate,
and in the coin or currency, herein prescribed.
So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the
term of the Debentures, to defer payments of interest on this Debenture by
extending the interest payment period of this Debenture for a period not
exceeding 20 consecutive quarterly periods (an "Extension Period") during
which Extension Period no interest shall be due and payable; provided that no
Extension Period shall end on a date other than an Interest Payment Date or
extend beyond the Maturity Date. Before the termination of any Extension
Period, the Company may further defer payments of interest by
A-6
further extending such period, provided that such period, together with all
such previous and further extensions within such Extension Period, shall not
exceed 20 consecutive quarterly periods or extend beyond the Maturity Date.
Upon the termination of any Extension Period and the payment of all accrued
and unpaid interest and including any Additional Interest and Compounded
Interest then due, the Company may commence a new Extension Period, subject to
the foregoing requirements.
Subject to the prior approval of the Federal Reserve if such approval
is then required under applicable law, rules, guidelines or policies of the
Federal Reserve, the Company will have the right at any time to liquidate the
Trust and cause the Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Trust.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Debenture for registration of transfer at the office or agency of the Trustee
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Security Registrar duly executed by the registered Holder hereof or his or
her attorney duly authorized in writing, and thereupon one or more new
Debentures of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Trustee, any paying agent and the Security
Registrar may deem and treat the registered holder hereof as the owner hereof
for all purposes, whether or not this Debenture be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Debentures are issuable only in registered form without coupons
in denominations of $25.00 and any integral multiple thereof.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture. THE INDENTURE AND
THE DEBENTURES SHALL BE
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GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
A-8
