1
EXHIBIT 4.3
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
UBS PREFERRED FUNDING COMPANY LLC II
DATED AS OF -, 2001
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TABLE OF CONTENTS
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ARTICLE I
DEFINED TERMS
Section 1.1 Definitions........................................................ 2
Section 1.2 Headings........................................................... 13
ARTICLE II
CONTINUATION AND TERM;
ADMISSION OF SECURITYHOLDERS
Section 2.1 Continuation....................................................... 13
Section 2.2 Admission of Securityholders....................................... 13
Section 2.3 Name............................................................... 14
Section 2.4 Term............................................................... 14
Section 2.5 Registered Agent and Office........................................ 14
Section 2.6 Principal Executive Offices........................................ 14
Section 2.7 Qualification in Other Jurisdictions............................... 14
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY;
BY-LAWS; SUPPORT AGREEMENT
Section 3.1 Purposes and Powers................................................ 15
Section 3.2 By-Laws............................................................ 15
Section 3.3 Bank Subordinated Guarantee........................................ 15
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND SECURITIES
Section 4.1 Form of Contribution............................................... 15
Section 4.2 Contributions with Respect to the Common Securityholders........... 15
Section 4.3 Contributions with Respect to the Preferred Securityholders........ 15
Section 4.4 Allocation of Profits and Losses................................... 16
Section 4.5 Withholding........................................................ 16
Section 4.6 Securities as Personal Property.................................... 17
ARTICLE V
SECURITYHOLDERS
Section 5.1 Powers of Securityholders.......................................... 17
Section 5.2 Partition.......................................................... 17
Section 5.3 Resignation........................................................ 17
Section 5.4 Liability of Securityholders....................................... 17
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ARTICLE VI
MANAGEMENT
Section 6.1 Management of the Company.......................................... 18
Section 6.2 Limits on Board of Directors' Powers............................... 22
Section 6.3 Reliance by Third Parties.......................................... 23
Section 6.4 No Management by Any Preferred Securityholders..................... 23
Section 6.5 Business Transactions of the Common Securityholder with the Company 23
Section 6.6 Outside Businesses................................................. 23
Section 6.7 Duties of Directors................................................ 23
Section 6.8 Additional Directors............................................... 24
ARTICLE VII
COMPANY SECURITIES; SUBORDINATED NOTES
Section 7.1 Company Common Securities.......................................... 24
Section 7.2 General Provisions Regarding Company Preferred Securities and
Company Parity Preferred Securities........................... 25
Section 7.3 Company Preferred Securities....................................... 27
Section 7.4 General Provisions Regarding Subordinated Notes.................... 38
ARTICLE VIII
VOTING AND MEETINGS
Section 8.1 Voting Rights of Preferred Securityholders......................... 38
Section 8.2 Voting Rights of Common Securityholders............................ 39
Section 8.3 Meetings of the Securityholders.................................... 39
ARTICLE IX
DIVIDENDS
Section 9.1 Dividends.......................................................... 40
Section 9.2 Limitations on Distributions....................................... 40
Section 9.3 No Dividend Instruction............................................ 40
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Financial Statements............................................... 41
Section 10.2 Limitation on Access to Records.................................... 41
Section 10.3 Accounting Method.................................................. 42
Section 10.4 Annual Audit....................................................... 42
ARTICLE XI
TAX MATTERS
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Section 11.1 Company Tax Returns................................................ 42
Section 11.2 Tax Reports........................................................ 42
Section 11.3 Taxation as a Partnership.......................................... 43
Section 11.4 Taxation of Securityholders........................................ 43
ARTICLE XII
EXPENSES
Section 12.1 Expenses........................................................... 43
Section 12.2 Contribution to Funds of the Company............................... 44
ARTICLE XIII
TRANSFERS OF SECURITIES BY SECURITYHOLDERS
AND RELATED MATTERS
Section 13.1 Right of Assignee to Become a Preferred Securityholder............. 44
Section 13.2 Events of Cessation of Security Ownership.......................... 44
Section 13.3 Persons Deemed Preferred Securityholders........................... 44
Section 13.4 The Company Preferred Certificates................................. 44
Section 13.5 Transfer of Company Preferred Certificates......................... 45
Section 13.6 Mutilated, Destroyed, Lost or Stolen Company Preferred Certificates 46
Section 13.7 Restrictions on Transfers of Securities............................ 46
ARTICLE XIV
MERGERS, CONSOLIDATIONS AND SALES
Section 14.1 The Company........................................................ 47
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 No Dissolution..................................................... 48
Section 15.2 Events Causing Dissolution......................................... 48
Section 15.3 Notice of Dissolution.............................................. 49
Section 15.4 Liquidation........................................................ 49
Section 15.5 Certain Restrictions on Liquidation Payments....................... 49
Section 15.6 Termination........................................................ 49
ARTICLE XVI
MISCELLANEOUS
Section 16.1 Amendments......................................................... 50
Section 16.2 Amendment of Certificate of Formation.............................. 50
Section 16.3 Successors......................................................... 50
Section 16.4 Law; Severability.................................................. 50
Section 16.5 Filings............................................................ 50
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Section 16.6 Power of Attorney.................................................. 51
Section 16.7 Exculpation........................................................ 51
Section 16.8 Indemnification.................................................... 51
Section 16.9 Additional Documents............................................... 52
Section 16.10 Notices............................................................ 52
Section 16.11 Nominee Letter..................................................... 53
Section 16.12 Counterparts....................................................... 53
ANNEX A - Form of UBS AG Subordinated Guarantee Agreement
ANNEX B - Form of Administration Agreement
ANNEX C - By-Laws of the Company
ANNEX D - Form of Subordinated Note of UBS AG
ANNEX E - List of Initial Directors and Officers
ANNEX F - Investment Policies
ANNEX G - Form of Certificate Evidencing Company Preferred Securities
ANNEX H - Form of No Dividend Instruction
ANNEX I - Form of Nominee Letter
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AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
UBS PREFERRED FUNDING COMPANY LLC II
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
of UBS Preferred Funding Company LLC II, a Delaware limited liability company
(the "Company"), is made as of -, 2001, among UBS AG, a bank organized under the
laws of Switzerland (the "Bank"), as initial Securityholder (as defined below)
and holder of the Company Common Securities (as defined below), and the Persons
(as defined below), who may from time to time become additional Securityholders
of the Company in accordance with the provisions hereof.
WITNESSETH
WHEREAS, the Bank, as initial Securityholder, has formed a
limited liability company pursuant to the Delaware Limited Liability Company
Act, 6 Del.C. Section 18-101, et seq., as amended from time to time (the
"Delaware Act"), by filing a Certificate of Formation of the Company (the
"Certificate of Formation") with the office of the Secretary of State of the
State of Delaware on May 22, 2001 and has entered into the Limited Liability
Company Agreement of the Company, dated as of May 22, 2001 and effective as of
May 22, 2001, (the "Original Agreement");
WHEREAS, the initial Securityholder desires to amend and
restate the Original Agreement as provided in this Amended and Restated Limited
Liability Company Agreement of the Company (as amended, modified or supplemented
from time to time in accordance with its terms, this "Agreement") and to
continue the Company as a limited liability company under the Delaware Act in
accordance with the provisions of this Agreement; and
WHEREAS, simultaneously with the Bank's execution and delivery
of this Agreement, the Bank is executing and delivering the UBS AG Subordinated
Guarantee Agreement, dated as of the date hereof, substantially in the form of
Annex A hereto (as amended, modified or supplemented from time to time in
accordance with its terms, the "Bank Subordinated Guarantee").
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the initial
Securityholder hereby agrees as follows:
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ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. Unless the context otherwise
requires, the terms defined in this Article I shall, for the purposes of this
Agreement, have the meanings herein specified.
"Administration Agreement" means the Administration
Agreement between the Company and the Administrator, dated as of -
2001, as amended, modified or supplemented from time to time in
accordance with its terms (attached hereto as Annex B).
"Administrative Action" means any judicial decision,
official administrative pronouncement, published or private ruling,
regulatory procedure, notice or announcement (including any notice or
announcement of intent to adopt such procedures or regulations) by any
legislative body, court, governmental authority or regulatory body
having appropriate jurisdiction.
"Administrator" means the branch of the Bank located
in Stamford, Connecticut, in its capacity as the service provider under
the Administration Agreement.
"Affiliate" means, with respect to a specified
Person, any Person directly or indirectly controlling, controlled by,
or under common control with the specified Person.
"Affiliate Securities" means any securities issued by
the Bank or a subsidiary of the Bank and includes the Subordinated
Notes.
"Agreement" has the meaning specified in the second
Recital of this Agreement.
"Applicable Procedures" means, with respect to any
transfer or transaction involving a Company Preferred Security, the
rules and procedures of the Clearing Agency for such Company Preferred
Security, in each case to the extent applicable to such transaction and
as in effect from time to time.
"authorized person" has the meaning specified in
Section 2.1(b).
"Available Distributable Profits" means, for any
financial year of the Bank, (i) if there are no Bank Parity Securities
outstanding, Distributable Profits for the immediately preceding
financial year of the Bank, and (ii) if there are Bank Parity
Securities outstanding, then an amount determined as the product of (x)
Distributable Profits for such immediately preceding financial year of
the Bank and (y) a ratio (I) the numerator of which is the aggregate
amount of full dividends on the Company Preferred Securities to be paid
on the Dividend Payment Dates which occur during the then current
financial year (but excluding dividends paid on January of the current
year and including dividends to be paid on January of the following
year in the case of calculations occurring after - 2011) and (II)
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the denominator of which is the sum of the amount determined pursuant
to clause (I) plus the aggregate amount of full dividends on the Bank
Parity Securities to be paid on dividend payment dates which occur
during the then current financial year.
"Bank" has the meaning specified in the Preamble of
this Agreement.
"Bank Junior Obligations" means (i) ordinary shares
of the Bank, (ii) each class of preferred or preference shares or
similar securities of the Bank that ranks junior to the most senior
ranking preferred or preference shares or similar securities of the
Bank, (iii) any indebtedness, guarantee or support agreement or similar
undertaking of the Bank in respect of any subsidiary securities that
rank junior to the Bank Subordinated Guarantee.
"Bank Parity Securities" means (i) each class of
preferred or preference shares or similar securities of the Bank that
ranks equally with the most senior ranking preferred or preference
shares or similar securities of the Bank and (ii) any securities issued
by any subsidiaries of the Bank and entitled to the benefit of any
guarantee or support agreement or similar undertaking of the Bank that
ranks equally with the Bank Subordinated Guarantee.
"Bank Subordinated Guarantee" has the meaning
specified in the third Recital to this Agreement.
A "Bankruptcy Event" shall be deemed to occur if (i)
at any time the Bank's unconsolidated unsubordinated liabilities exceed
its unconsolidated total assets (valued at the higher of their
going-concern and their liquidation value), as calculated based on the
most recent unconsolidated interim balance sheet of the Bank, and the
unsubordinated creditors of the Bank do not agree to subordinate their
claims to the extent that such liabilities exceed such assets; or (ii)
the Swiss Federal Banking Commission exercises the broad discretion
granted to it under Swiss Banking Law before the occurrence of such an
excess as described in (i), above, by withdrawing the banking license
of the affected bank, which has then been required to go into
liquidation pursuant to Article 23 quinquies of the Swiss Banking Law.
In the case of the occurrence of the events described in (i) above, the
Board of Directors of the Bank, pursuant to Article 725 paragraph 2 of
the Swiss Code of Obligations, must then notify the competent court of
such excess and upon such notification, such court must declare the
bankruptcy of the Bank in accordance with Article 725a paragraph 1 of
the Swiss Code of Obligations and Article 35 paragraph 2 of the Swiss
Banking Law.
"Board of Directors" means the Directors of the
Company as constituted in accordance with the provisions of this
Agreement and of the By-Laws.
"Business Day" means a day on which (i) the
Trans-European Automated Real-Time Gross Settlement Express Transfer
System ("TARGET") is operating, (ii) banks are open for business and
carrying out transactions in U.S. dollars in London, Luxembourg, and
Wilmington, Delaware.
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"By-Laws" means the By-Laws of the Company in the
form of Annex C hereto, as they may be amended from time to time by the
Board of Directors of the Company in accordance with the provisions of
this Agreement (which By-Laws are, for all purposes of this Agreement,
deemed to be incorporated herein and to be a part hereof).
"Calculation Agent" means the branch of the Bank
located in London.
"Capital Event" means the determination by the Bank
after consultation with the Swiss Federal Banking Commission that the
Company Preferred Securities cannot be included in calculating the Tier
1 capital of the Bank on a consolidated basis.
"Capital Limitation" has the meaning specified in
Section 7.3(b)(iii).
"Cayman Islands Branch" means the branch of the Bank
located in the Cayman Islands.
"Certificate of Designations" means a Certificate of
Designations establishing the terms and conditions of the Company
Preferred Securities or the Company Parity Preferred Securities adopted
by the Board of Directors pursuant to Section 7.2(a) and any and all
amendments thereof.
"Change in Tax Law" means the receipt by the Bank of
an opinion of a nationally recognized law firm or other tax advisor
(which may be an accounting firm) in Switzerland, the United States or
the Cayman Islands, as appropriate, experienced in such matters to the
effect that an event of the type described in clause (A), (B) or (C) of
the definition of "Tax Event" has occurred or will occur as a result of
(i) any amendment to, clarification of, or change (including any
announced prospective change) in, the laws or treaties (or any
regulations under any laws or treaties) of the United States,
Switzerland or the Cayman Islands or any political subdivision or
taxing authority of or in the United States, Switzerland or the Cayman
Islands affecting taxation or (ii) any Administrative Action or any
amendment to, clarification of, or change in the official position or
Bank interpretation of any Administrative Action or any interpretation
or pronouncement that provides for a position with respect to any
Administrative Action that differs from the previously generally
accepted position, in each case, by any legislative body, court,
governmental authority or regulatory body, regardless of the manner in
which such amendment, clarification, change, interpretation or
pronouncement is made known, which amendment, clarification, change or
Administrative Action is effective or which interpretation or
pronouncement is announced on or after the date of issuance of the
Company Preferred Securities.
"Clearing Agency" means an organization registered as
a "clearing pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. DTC will be the initial Clearing Agency.
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"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from time to
time a Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Clearstream" means Clearstream Banking societe
anonyme.
"Closing Date" means a "closing date" or "time of
delivery" under the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any corresponding United States federal
tax statute enacted after the date of this Agreement. A reference to a
specific section (Section) of the Code (or any Treasury regulation
promulgated thereunder) refers not only to such section but also to any
corresponding provision of any United States federal tax statute (or
any Treasury regulation promulgated thereunder) enacted after the date
of this Agreement, as such specific section or corresponding provision
is in effect on the date of application of the provisions of this
Agreement containing such reference.
"Common Securityholder" means a Securityholder that
owns one or more Company Common Securities. Initially, the Bank will be
the only Common Securityholder.
"Company" has the meaning specified in the Preamble
of this Agreement.
"Company Common Securities" means the securities of
the Company representing the common limited liability company interests
in the Company described in this Agreement.
"Company Junior Securities" means the Company Common
Securities and any classes or series of equity securities of the
Company (representing limited liability company interests in the
Company) now or hereafter issued, other than any class or series of
equity securities of the Company (representing limited liability
company interests in the Company) expressly designated as being on
parity with the Company Preferred Securities as to dividend rights and
rights upon dissolution, liquidation or winding up of the Company.
"Company Parity Preferred Securities" means any class
or series of equity securities of the Company (representing limited
liability company interests in the Company) expressly designated as
being on parity with the Company Preferred Securities as to dividend
rights and rights upon dissolution, liquidation or winding up of the
Company.
"Company Preferred Certificate" means a certificate
substantially in the form attached hereto as Annex G, evidencing the
Company Preferred Securities held by a Preferred Securityholder, which
has been duly executed as provided in Section 13.4.
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"Company Preferred Securities" means the -%
Noncumulative Company Preferred Securities, aggregate liquidation
preference $-, offered by the Company pursuant to a Prospectus dated -,
2001 together with any subsequent offering by the Company of -%
Noncumulative Company Preferred Securities (each representing a
preferred limited liability company interest in the Company).
"Company Security" means a limited liability company
interest in the Company, including the right of the holder thereof to
any and all benefits to which a Securityholder may be entitled as
provided in this Agreement, together with the obligations of a
Securityholder to comply with all of the terms and provisions of this
Agreement, and includes the Company Junior Securities, the Company
Preferred Securities and the Company Parity Preferred Securities from
time to time outstanding.
"Delaware Act" has the meaning specified in the first
Recital of this Agreement.
"Definitive Dividend" means, as to a Dividend Payment
Date and related Dividend Period, dividends that are due and payable
because (i) they are not limited by the Capital Limitation and (ii)
either (x) they are with respect to a Mandatory Dividend Payment Amount
due on a Mandatory Dividend Payment Date or (y) a No Dividend
Instruction was not delivered and they are not limited by the
Distributable Profits Limitation.
"Determination Date" for a Dividend Period or
Interest Period (as applicable) means two London Banking Days preceding
the first day of that Dividend Period or Interest Period (as
applicable).
"Directors" means each of the Persons listed as
directors on Annex E hereto until such Persons shall resign or
otherwise be duly removed as a Director, and each Person who may from
time to time be designated to serve as a successor to any Director of
the Company or as an additional Director of the Company, in each case
in accordance with the provisions of this Agreement and of the By-Laws.
"Distributable Profits" means, for any financial year
of the Bank, profit that may be distributed in accordance with Swiss
law then applicable. Currently, for any financial year of the Bank,
distributable profits are equal to profit brought forward, plus profit
for the period, minus appropriation to general statutory reserve plus
other reserves, each as shown in the audited unconsolidated balance
sheet and statement of appropriation of retained earnings of the Bank
and as determined in accordance with accounting standards applicable
under Swiss law.
"Distributable Profits Limitation" means the
limitation on dividends specified in Section 7.3(b)(iv).
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"Distributable Profits Limitation Certificate" has
the meaning specified in Section 7.3(b)(iv).
"Dividend Payment Date" has the meaning specified in
Section 7.3(b)(i).
"Dividend Period" has the meaning specified in
Section 7.3(b)(i).
"dividends" means, when used with respect to Company
Preferred Securities, distributions on the Company Preferred Securities
in the amounts and in the manner set forth in this Agreement.
"DTC" means The Depository Trust Company.
"Eligible Investments" means, pursuant to the
Investment Policies, the assets or investments which the Company may
hold and consist of (i) the Subordinated Notes issued by the Cayman
Islands branch of UBS AG with an aggregate principal amount of $-, and
(ii) other securities issued by the Bank acting through a branch,
agency or other office located outside of the United States or by a
non-U.S. branch of a non-U.S. subsidiary of the Bank.
"Euroclear" means ▇▇▇▇▇▇ Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System (or its
successor).
"Financial Year" means, with respect to the Company,
(i) the period commencing upon the formation of the Company and ending
on December 31, 2000 and (ii) any subsequent twelve month period
commencing on January 1 and ending on December 31 and, with respect to
the Bank, means any twelve-month period commencing on January 1 and
ending on December 31.
"Investment Company Act Event" means the receipt by
the Bank of an opinion of a nationally recognized law firm in the
United States experienced in such matters to the effect that there is
more than an insubstantial risk that the Company or the Trust is an
"investment company" within the meaning of the 1940 Act.
"Investment Policies" means the investment policies
of the Company in the form of Annex F hereto, as amended from time to
time by the Board of Directors of the Company in accordance with the
provisions of this Agreement (which investment policies are, for
purposes of this Agreement, deemed to be incorporated herein and to be
a part hereof).
"Junior Creditors" means all holders of any Bank
Junior Obligations.
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"liquidation preference" means, with respect to each
Company Preferred Security, as of any time of determination, the
liquidation preference thereof as specified in Section 7.3(a).
"London Banking Day" means a day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.
"majority (or other stated percentage) in liquidation
preference" means Preferred Securityholder(s) who are the record owners
of Company Preferred Securities the aggregate liquidation preference of
which represent more than 50% (or not less than the stated percentage)
of the aggregate liquidation preference of all Company Preferred
Securities then outstanding.
"Make Whole Amount" as applied to a redemption of the
Company Preferred Securities means the greater of (i) 100% of the
liquidation preference of the Company Preferred Securities and (ii) as
determined by a Quotation Agent (as defined below), the sum of the
present value of the liquidation preference of the Company Preferred
Securities together with the present values of scheduled payments of
dividends accrued from the date of redemption to the Dividend Payment
Date in - 2011 (the "Remaining Life"), in each case discounted to the
date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate.
For purposes of determining the Make Whole Amount:
"Adjusted Treasury Rate" means, with respect
to any redemption date, the Treasury Rate plus .75%.
"Comparable Treasury Issue" means, with
respect to any redemption date, the United States Treasury
security selected by the Quotation Agent as having a maturity
comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the Remaining Life. If no
United States Treasury security has a maturity that is within
a period from three months before to three months after the
Interest Payment Date and Dividend Payment Date in - 2011, the
two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and
the Treasury Rate shall be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month using such
securities.
"Comparable Treasury Price" means (A) the
average of five Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest of
such Reference Treasury Dealer Quotations, or (B) if the
Calculation Agent obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such
Quotations.
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"Quotation Agent" means UBS Warburg LLC and
its successors, except that if UBS Warburg LLC shall cease to
be a primary U.S. Government securities dealer in New York
City (a "Primary Treasury dealer"), the Corporation will
designate another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the
Quotation Agent and (ii) any other Primary Treasury Dealer
selected by the Quotation Agent after consultation with the
Company.
"Reference Treasury Dealer Quotations"
means, with respect to each Reference Treasury Dealer and any
redemption date, the average, as determined by the Calculation
Agent, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Calculation Agent by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on
the third Business Day preceding such redemption date.
"Treasury Rate" means (i) the yield, under
the heading which represents the average for the week
immediately prior to the redemption date, appearing in the
most recently published statistical release designated
"H.15(519)" or any successor publication which is published
weekly by the Federal Reserve and which establishes yields on
actively traded United States Treasury securities adjusted to
constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining
Life (or if no maturity is within three months before or after
the Remaining Life, yields for the two published maturities
most closely corresponding to the Remaining Life will be
determined and the Treasury Rate will be interpolated or
extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any
successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date. The Treasury Rate
will be calculated on the third Business Day preceding the
redemption date.
"Mandatory Dividend Payment Amount" has the meaning
specified in Section 7.3(b)(ii).
"Mandatory Dividend Payment Date" has the meaning
specified in Section 7.3(b)(ii).
"1940 Act" means the Investment Company Act of 1940,
as amended.
"No Dividend Instruction" has the meaning specified
in Section 9.3.
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"Nondefinitive Dividends" means, as to a Dividend
Payment Date and related Dividend Period, dividends that are not
Definitive Dividends.
"Officers" means each of the Persons listed as an
Officer on Annex E hereto until such Persons shall resign or otherwise
be duly removed as an Officer and each Person who may from time to time
be duly appointed an Officer by the Board of Directors or pursuant to
Section 6.1(b) and acting in accordance with the provisions of this
Agreement and of the By-Laws.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel to the Company, and who shall be reasonably
acceptable to the Registrar.
"Original Agreement" has the meaning specified in the
first Recital of this Agreement.
"Owner" means each Person who is the record owner
reflected on the securities register maintained by the Registrar.
"Paying Agency Agreement" means the Paying Agency
Agreement, dated October 10, 2000, between the Company, the Trust, the
Bank, Wilmington Trust Company and BNP Paribas pursuant to which the
Company appointed Wilmington Trust Company and BNP Paribas as paying
agents for the Company Preferred Securities.
"Person" means any individual, corporation,
association, partnership (general or limited), joint venture, trust,
estate, limited liability company, or other legal entity or
organization.
"Power of Attorney" means the power of attorney
granted pursuant to Section 16.6.
"Preferred Securityholder" means a Securityholder
that holds Company Preferred Securities or Company Parity Preferred
Securities.
"Prospectus" means the prospectus, dated - 2001,
pursuant to which the Company Preferred Securities and the Trust
Preferred Securities are being offered.
"Purchase Price" for any Company Preferred Security
means the amount paid per $1,000 of liquidation preference of such
Company Preferred Security pursuant to an Underwriting Agreement under
which such Company Preferred Securities are being purchased, payment of
which shall constitute the contribution to capital contemplated by
Section 4.3.
"Rating Agency" means, at any time, ▇▇▇▇▇'▇ Investors
Service, Inc. or Standard & Poor's Ratings Group, if either one is
rating the Company Preferred Securities
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at the time or, if neither is providing a rating for the Company
Preferred Securities at such time, then a "nationally recognized
statistical rating organization" as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act.
"Registrar" has the meaning specified in Section
13.5(a).
"Registrar and Transfer Agency Agreement" means the
Registrar and Transfer Agency Agreement, dated as of - 2001, between
the Company and Wilmington Trust Company, pursuant to which the Company
has appointed Wilmington Trust Company as registrar and transfer agent
for the Company Preferred Securities, as such agreement may be amended,
modified or supplemented from time to time.
"Relevant Period" means (i) in the case of Bank
Parity Securities that pay dividends less frequently than
semi-annually, one year and (ii) in the case of Bank Parity Securities
that pay dividends semi-annually or more frequently than semi-annually,
six months (in each case ending on or including the date on which the
related dividend on a Bank Parity Security is paid but not including
the corresponding day in the month that is twelve or six months prior
thereto).
"Securities Act" means the Securities Act of 1933, as
amended.
"Securities Register" has the meaning specified in
Section 13.5(a).
"Securityholder" means any Person that holds a
Company Security and is admitted as a member and securityholder
pursuant to the provisions of this Agreement and of the Delaware Act,
in its capacity as a securityholder and as a member of the Company. For
purposes of the Delaware Act, the Common Securityholders and the
Preferred Securityholders shall constitute separate classes or groups
of Securityholders and of members.
"Subordinated Notes" means the Subordinated Notes
issued by the Cayman Islands Branch, having an aggregate principal
amount of $- in substantially the form of Annex D hereto.
"Swiss Banking Law" means the Swiss Federal Law
Relating to Banks and Savings Banks of November 8, 1934, as amended.
"Swiss Federal Banking Commission" means the Swiss
Federal Banking Commission and, if any successor governmental authority
succeeds to the bank regulatory functions of the Swiss Federal Banking
Commission in Switzerland, such successor governmental authority;
provided, however, that if the Bank becomes domiciled in a jurisdiction
other than Switzerland, then each reference herein to the Swiss Federal
Banking Commission shall be deemed to instead refer to the governmental
authority having primary regulatory authority with respect to the
Bank's capital adequacy in such other jurisdiction.
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"Tax Event" means the receipt by the Bank of an
opinion of a nationally recognized law firm or other tax advisor (which
may be an accounting firm) in Switzerland or the United States, as
appropriate, experienced in such matters to the effect that there is
more than an insubstantial risk that (A) the Company or the Trust is or
will be subject to more than a de minimis amount of additional taxes,
duties or other governmental charges, (B) the Bank is or will be
required to pay any additional amounts in respect of any taxes, duties
or other governmental charges with respect to payments of interest or
principal on the Subordinated Notes and with respect to any payments on
the Trust Preferred Securities, (C) the Company is or will be required
to pay any additional amounts in respect of any taxes, duties or other
governmental charges with respect to payments of dividends on the
Company Preferred Securities or the Trust is or will be required to pay
any additional amounts in respect of any taxes, duties or other
governmental charges with respect to distributions on the Trust
Preferred Securities, or (D) the treatment of any of the Company's
items of income, gain, loss, deduction or expense, or the treatment of
any item of income, gain, loss, deduction or expense of the Bank
related to the Subordinated Notes or its ownership of the Company, in
each case as reflected on the tax returns (including estimated returns)
filed (or to be filed) by the Company or the Bank, will not be
respected by a taxing authority, as a result of which the Company or
the Bank is or will be subject to more than a de minimis amount of
additional taxes, duties or other governmental charges or civil
liabilities, the effect of which cannot be avoided by the Company or
the Bank taking reasonable measures available to it without any adverse
effect on or material cost to the Bank or the Company (as determined by
the Bank in its sole discretion).
"Tax Matters Partner" means the party designated as
such in Section 11.1(a).
"Telerate Page 3750" means the display designated as
"Page 3750" on the Bridge/Telerate Service (or such other page as may
replace Page 3750) or such other service or services as may be
nominated by the British Bankers' Association as the information vendor
for the purpose of displaying London interbank offered rates for U.S.
dollar deposits.
"Transaction Documents" has the meaning specified in
Section 6.1(e)(i).
"Transfer Agent" has the meaning specified in Section
13.5(a).
"Trust" means, with respect to the Company Preferred
Securities, UBS Preferred Funding Trust II, a Delaware statutory
business trust, and, with respect to any Company Parity Preferred
Securities, such Trust or another trust performing a substantially
similar function with respect to such Company Parity Preferred
Securities.
"Trust Certificates" means, with respect to Company
Preferred Securities issued to the Trust, the certificates issued by
the Trust representing undivided beneficial ownership of such Company
Preferred Securities.
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"Trust Preferred Securities" means the -%
Noncumulative Trust Preferred Securities, aggregate liquidation amount
$-, offered by the Trust pursuant to the Prospectus together with any
subsequent offering by the Trust of -% Noncumulative Trust Preferred
Securities, in each case representing an undivided interest in number
of Company Preferred Securities and the Bank Subordinated Guarantee.
"Underwriting Agreement" means an underwriting
agreement among the Company, the Bank and one or more underwriters or
initial purchasers relating to the Company Preferred Securities or a
series of the Company Parity Preferred Securities (and, if the Company
Preferred Securities or the series of Company Parity Preferred
Securities are being held through a Trust (such as UBS Preferred
Funding Trust II in the case of the -% Noncumulative Company Preferred
Securities), the related trust certificates).
"United States" means the United States of America,
its territories and possessions, any state of the United States, and
the District of Columbia.
"U.S. dollars," "dollars," "U.S.$" and "$" mean the
currency of the United States of America.
Section 1.2 Headings. The headings and subheadings in this
Agreement are included for convenience and identification only and are in no way
intended to describe, interpret, define or limit the scope, extent or intent of
this Agreement or any provision hereof.
ARTICLE II
CONTINUATION AND TERM;
ADMISSION OF SECURITYHOLDERS
Section 2.1 Continuation.
(a) The Securityholders hereby agree to the continuation of
the Company as a limited liability company under and pursuant to the provisions
of the Delaware Act and of this Agreement and agree that the rights, duties and
liabilities of the Securityholders shall be as provided in the Delaware Act,
except as otherwise provided herein or in the By-Laws.
(b) Any Person designated as an "authorized person" by the
Board of Directors is authorized to execute, deliver and file on behalf of the
Company any and all amendments to and restatements of the Certificate of
Formation, as an authorized person within the meaning of the Delaware Act.
Section 2.2 Admission of Securityholders. Upon the execution
of this Agreement, the Bank shall become and be designated as, automatically and
without any further act on the part of any Person being necessary, the Common
Securityholder. Without execution of this Agreement, upon the payment to the
Company for the Company Preferred Securities being acquired by a Person
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in connection with the issuance of the Company Preferred Securities on the
Closing Date pursuant to the terms of the related Underwriting Agreement, which
action shall be deemed to constitute a request by such Person that the books and
records of the Company reflect its admission as a Preferred Securityholder, such
Person shall thereupon be admitted to the Company as a Preferred Securityholder
and shall be bound by all the terms and conditions hereof and of the Company
Preferred Securities.
Section 2.3 Name. The name of the Company being formed hereby
is "UBS Preferred Funding Company LLC II". The Company will maintain "UBS" as
part of its name for as long as any Trust Preferred Securities remain
outstanding unless, because of a merger or other business combination involving
the Bank or a change by the Bank of its own name, inclusion of "UBS" as part of
the Company's name is no longer appropriate. Subject to such limitation, the
business of the Company may be conducted upon compliance with all applicable
laws under any other name designated by the Board of Directors.
Section 2.4 Term. The term of the Company shall commence upon
the date a certificate of formation shall have been filed in the office of the
Secretary of State of the State of Delaware and shall continue perpetually,
unless the Company is dissolved in accordance with the provisions of the
Delaware Act and this Agreement. The existence of the Company as a separate
legal entity shall continue until the cancellation of the Certificate of
Formation in the manner required by the Delaware Act.
Section 2.5 Registered Agent and Office. The Company's
registered agent in the State of Delaware shall be The Corporation Trust
Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of New Castle,
19801 and its registered office in the State of Delaware shall be c/o the
registered agent. At any time, the Board of Directors may designate another
registered agent and/or registered office.
Section 2.6 Principal Executive Offices. The principal
executive offices of the Company shall be determined by the Board of Directors.
The Board of Directors may change the location of the Company's principal place
of business; provided, however, that such change has no material adverse effect
upon any Preferred Securityholder.
Section 2.7 Qualification in Other Jurisdictions. The Board of
Directors shall cause the Company to be qualified or registered under assumed or
fictitious name statutes or similar laws in any jurisdiction in which the
Company conducts business and in which such qualification or registration is
required by law or deemed advisable by the Board of Directors. Each Person
designated by the Board of Directors as an "authorized person" is authorized to
execute, deliver and file on behalf of the Company any certificates (and any
amendments or restatements thereof) necessary for the Company to qualify to do
business in each jurisdiction in which the Board of Directors has determined
that the Company shall conduct business.
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ARTICLE III
PURPOSE AND POWERS OF THE COMPANY;
BY-LAWS; SUPPORT AGREEMENT
Section 3.1 Purposes and Powers. The sole purposes of the
Company are to issue Company Preferred Securities, Company Parity Preferred
Securities and Company Common Securities and to use substantially all of the
proceeds thereof to acquire and hold the Subordinated Notes and other Eligible
Investments and, except as otherwise expressly limited herein, to enter into,
make and perform all contracts and other undertakings, and engage in all
activities and transactions, as the Board of Directors may reasonably deem
necessary or advisable for the carrying out of the foregoing purposes of the
Company in all events without causing the Company to be treated as other than a
partnership that is not a publicly traded partnership for U.S. federal income
tax purposes. The Company may not conduct any other business or operations
except as contemplated by the preceding sentence. The Company shall have the
power and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to or for the furtherance of the purposes of
the Company as set forth herein.
Section 3.2 By-Laws. The Board of Directors, Officers and
Securityholders shall be subject to the express provisions of this Agreement and
of the By-Laws. In case of any conflict between any provisions of this Agreement
and any provisions of the By-Laws, the provisions of this Agreement shall
control.
Section 3.3 Bank Subordinated Guarantee. Upon execution and
delivery of the Bank Subordinated Guarantee by the Bank, the provisions of the
Bank Subordinated Guarantee shall be deemed to be incorporated herein and to be
a part hereof except to the extent any such provisions shall conflict with any
express provisions of this Agreement or of the Delaware Act.
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND SECURITIES
Section 4.1 Form of Contribution. The contribution to the
Company with respect to a Securityholder may, as determined by the Board of
Directors in its discretion, be in cash or other legal consideration.
Section 4.2 Contributions with Respect to the Common
Securityholders. The Common Securityholder shall contribute to the Company on or
prior to the issuance of the Company Preferred Securities, cash in the amount of
$2,000.
Section 4.3 Contributions with Respect to the Preferred
Securityholders. On each Closing Date, there shall be contributed to the capital
of the Company, with respect to each Person who purchases a Company Preferred
Security on such Closing Date, an amount in cash equal to the Purchase Price for
such Company Preferred Security (such amount being such Person's capital
contribution to the Company). Preferred Securityholders, in their capacity as
Securityholders of the
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Company, shall not be required to make any additional contributions to the
Company (except as may be required by law).
Section 4.4 Allocation of Profits and Losses. Except as
otherwise provided in Section 7.3, the profits and losses of the Company for any
Financial Year (or portion thereof) shall be allocated as follows:
(a) all gains and losses resulting from any
disposition (including, without limitation, any redemption or
prepayment) of assets by the Company shall be allocated 100% to the
Common Securityholders;
(b) except as otherwise provided in a Certificate of
Designations, net profit of the Company (determined without regard to
the amount of any gains and losses described in subparagraph (a) of
this Section 4.4) shall be allocated (i) pro rata among the Preferred
Securityholders until the amount so allocated equals the amount of
dividends paid during such Financial Year (or portion thereof), as
determined on a when-paid basis with respect to the Company Preferred
Securities or Company Parity Preferred Securities held by such
Preferred Securityholder, as adjusted pursuant to Sections 7.3 and 4.3
or in any Certificate of Designations after the delivery of a No
Dividend Instruction, and (ii) thereafter to the Common
Securityholders; and
(c) expenses, deductions and net loss of the Company
(determined without regard to the amount of any gains and losses
described in subparagraph (a) of this Section 4.4) shall be allocated
100% to the Common Securityholders.
Notwithstanding the foregoing, the Tax Matters Partner shall have the power to
alter any such allocations for federal, state, and local income tax purposes if
such alteration is necessary to cause such allocations to have "substantial
economic effect" (within the meaning of Treasury regulation section
1.704-1(b)(2)) or to ensure that such allocations are otherwise in accordance
with the interests of the Securityholders (within the meaning of Treasury
regulation section 1.704-1(b)(3)) determined on the basis of the economic
arrangements of the parties as described in this Agreement.
Section 4.5 Withholding. The Company shall comply with any
withholding requirements under U.S. federal, state and local and foreign law and
shall remit amounts withheld to and file required forms with applicable
jurisdictions. Subject to the provisions of Section 7.3 to the extent that the
Company is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Securityholder, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to such Securityholder. The Company will, however, be required to pay additional
amounts so that the net amount received by a Preferred Securityholder after
withholding will not be less than the Mandatory Dividend Payment Amount then due
and payable as described in Section 7.3(c). To the fullest extent permitted by
law, in the event of any claimed over-withholding, Securityholders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld from a distribution was not withheld from such distribution, the
Company may reduce subsequent distributions by the amount of such withholding
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to the extent the Company was not required to pay Additional Amounts with
respect to such withholding. Each Securityholder, by its acceptance of
Securities, shall be deemed to agree to furnish the Company with any
representations and forms as shall reasonably be requested by the Company to
assist it in determining the extent of, and in fulfilling, its withholding
obligations.
Section 4.6 Securities as Personal Property. Each
Securityholder hereby agrees that its Company Securities shall for all purposes
be personal property. A Securityholder has no interest in specific property of
the Company.
ARTICLE V
SECURITYHOLDERS
Section 5.1 Powers of Securityholders. The Securityholders
shall have the power to exercise any and all rights or powers granted to the
Securityholders pursuant to the express terms of this Agreement and of the
By-Laws and shall be subject in all respects to the provisions hereof and
thereof.
Section 5.2 Partition. Each Securityholder waives any and all
rights that it may have to maintain an action for partition of the property of
the Company.
Section 5.3 Resignation. A Securityholder may resign from the
Company prior to the dissolution and winding up of the Company only upon the
assignment of its entire ownership interest in any Company Securities (including
by any redemption, repurchase or other acquisition by the Company of such
Company Securities) in accordance with the provisions of this Agreement. A
resigning Securityholder shall not be entitled to receive any distribution and
shall not otherwise be entitled to receive the fair value of its Company
Securities except as otherwise expressly provided for in this Agreement.
Section 5.4 Liability of Securityholders.
(a) Except as otherwise required by the Delaware Act, (i) the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company and (ii) no Securityholder shall be obligated personally for any such
debt, obligation or liability of the Company solely by reason of being a
Securityholder of the Company.
(b) A Securityholder, in its capacity as such, shall have no
liability in excess of (i) the amount of its capital contributions, (ii) its
share of any assets and undistributed profits of the Company, (iii) any amounts
required to be paid by such Securityholder pursuant to this Agreement or any
payment and/or indemnity in connection with the registration of transfers of
Company Securities and (iv) the amount of any distributions wrongfully
distributed to it to the extent set forth in the Delaware Act.
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ARTICLE VI
MANAGEMENT
Section 6.1 Management of the Company.
(a) Except as otherwise expressly provided in this Agreement
or in the By-Laws or as required in the Delaware Act, the business and affairs
of the Company shall be managed, and all actions required under this Agreement
shall be determined, solely and exclusively by the Board of Directors, which
shall have all rights and powers on behalf and in the name of the Company to
perform all acts necessary and desirable to the objects and purposes of the
Company, including the right to appoint Officers and to authorize any Officer to
act on behalf of the Company. Any action taken by the Board of Directors or any
duly appointed and acting Officer in accordance with this Agreement or the
By-Laws shall constitute the act of, and shall serve to bind, the Company.
(b) The number of directors of the Company initially shall be
three, which number may be increased as provided in this Agreement, in any
Certificate of Designations or in the By- Laws, but shall never be less than
three nor more than five. The names of the Directors who have been appointed by
the Company pursuant to the written consent of the Company's sole member, dated
as of May 29, 2001, shall serve until the first annual meeting of
Securityholders and until their successors are duly elected and qualify, are set
forth in Annex E hereto. These Directors may increase the number of Directors
and may fill any vacancy, whether resulting from an increase in the number of
directors or otherwise, on the Board of Directors occurring before the first
annual meeting of Securityholders in the manner provided in the By-Laws. The
names of the initial Officers, and their offices, are set forth in Annex E
hereto. Each such Officer shall have the duties and responsibilities that would
apply to his or her office if the Company were a corporation established under
the Delaware General Corporation Law, except to the extent that the Directors
from time-to-time determine otherwise.
(c) Each member of the Board of Directors shall be a "manager"
of the Company for all purposes of, and within the meaning of, the Delaware Act.
(d) Without limiting the generality of the foregoing, and
subject to the provisions of Section 6.2, the Board of Directors shall have all
authority, rights and powers in the management of the business of the Company to
do any and all other acts and things necessary, proper, convenient or advisable
to effectuate the purposes of this Agreement, provided that in exercising its
authority, rights and powers in the management of the business of the Company,
the Board of Directors shall use commercially reasonable efforts in order that
any such action does not cause the Company to be treated as an association or as
a "publicly traded partnership" (within the meaning of Section 7704 of the
Code), including by way of illustration, but not by way of limitation, the
following:
(i) to authorize the Company or any Officer of the
Company on behalf of the Company, to engage in transactions and
dealings, including transactions and dealings with any Securityholder
or any Affiliate of any Securityholder and including the entering into
and performance by the Company of one or more agreements with any
Person whereby,
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subject to the supervision and control of the Board of Directors, any
such other Person shall render or make available to the Company
managerial, investment, advisory or related services, office space and
other services and facilities upon such terms and conditions as may be
provided in such agreement or agreements (including, if deemed fair and
equitable by the Board of Directors, the compensation payable
thereunder by the Company);
(ii) to call meetings of Securityholders or any class
or series thereof;
(iii) to issue Company Securities, including Company
Common Securities and Company Preferred Securities, in accordance with
the provisions of this Agreement;
(iv) to pay all expenses incurred in forming the
Company to the extent not paid by the Bank;
(v) to purchase, hold and dispose of Eligible
Investments in accordance with the Investment Policies established from
time to time by the Board of Directors and otherwise in accordance with
the provisions of this Agreement;
(vi) to authorize (A) the entering into by the
Company of the Administration Agreement, the Registrar and Transfer
Agency Agreement and the Paying Agency Agreement and (B) the
performance by the Company of its obligations thereunder;
(vii) to authorize (A) the entering into by the
Company of the Underwriting Agreement and (B) the performance by the
Company of its obligations thereunder, including the offer and sale of
the Company Preferred Securities pursuant thereto;
(viii) to authorize the performance by the Company of
its obligations under the Subordinated Guarantee;
(ix) to authorize (A) the entering into by the
Company of similar agreements (or other agreements not inconsistent
herewith) in the future and (B) the performance by the Company of its
obligations thereunder;
(x) to authorize, suspend, pay, declare or otherwise
determine and make dividends, in cash or otherwise, on Company
Securities, in accordance with the provisions of this Agreement and of
the Delaware Act;
(xi) to establish, when a record date is not
otherwise established by this Agreement, record date with respect to
all actions to be taken hereunder that require a record date to be
established, including with respect to allocations, dividends and
voting rights;
(xii) to establish or set aside in their discretion
any reserve or reserves for contingencies and for any other proper
Company purpose;
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(xiii) to redeem or repurchase on behalf of the
Company, Company Securities which may be so redeemed or repurchased in
accordance with the provisions of this Agreement;
(xiv) to appoint (and dismiss from appointment)
attorneys and agents on behalf of the Company, and employ (and dismiss
from employment) any and all Persons providing legal, accounting or
financial services to the Company, or such other employees or agents as
the Directors deem necessary or desirable for the management and
operation of the Company;
(xv) to incur and pay all expenses and obligations
incident to the operation and management of the Company, including,
without limitation, the services referred to in the preceding
paragraph, taxes, interest, rent and insurance;
(xvi) to acquire and enter into any contract of
insurance necessary or desirable for the protection or conservation of
the Company and its assets or otherwise in the interest of the Company
as the Board of Directors shall determine;
(xvii) to open accounts and deposit, maintain and
withdraw funds in the name of the Company in banks, savings and loan
associations, brokerage firms or other financial institutions, which
bank accounts if opened prior to one month after the Closing Date for
the Company Preferred Securities may be opened by any Officer that is
authorized to do so by a written consent of any Director;
(xviii) to effect a dissolution or liquidation of the
Company, if the Bank is liquidated, whether voluntarily or
involuntarily, subject to applicable regulatory requirements, including
the prior approval of the Swiss Federal Banking Commission if then
required under applicable guidelines or policies of the Swiss Federal
Banking Commission, and to act as liquidating trustee or the Person
winding up the Company's affairs, all in accordance with and subject to
the provisions of this Agreement and of the Delaware Act;
(xix) to bring and defend on behalf of the Company
actions and proceedings at law or equity before any court or
governmental, administrative or other regulatory agency, body or
commission or otherwise;
(xx) to prepare and cause to be prepared reports,
statements and other relevant information for distribution to
Securityholders as may be required or determined to be appropriate by
the Board of Directors from time to time;
(xxi) to prepare and file all necessary returns and
statements and pay all taxes, assessments and other impositions
applicable to the assets of the Company;
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(xxii) to execute all other documents or instruments,
perform all duties and powers and do all things for and on behalf of
the Company in all matters necessary or desirable or incidental to the
foregoing;
(xxiii) to purchase and maintain on behalf of the
Company insurance to protect any Director or Officer against any
liability asserted against him or her, or incurred by him or her,
arising out of his or her status as such, and
(xxiv) to amend this Agreement in accordance with
Section 16.1.
(e) (i) Notwithstanding anything in this Agreement to the
contrary, without the need for consent of any other Person, including the Board
of Directors, the Company is authorized to purchase the Subordinated Notes and
to enter into and perform the Underwriting Agreement relating to the Company
Preferred Securities (including the offer and sale of the Company Preferred
Securities pursuant thereto), the Subordinated Notes Purchase Agreement, the
Administration Agreement, the Paying Agency Agreement, the Calculation Agency
Agreement, the member interest certificates in respect of the Company Preferred
Securities, the Registrar and Transfer Agency Agreement relating to the Company
Preferred Securities, the Registrar and Transfer Agency Agreement relating to
the Trust Preferred Securities, the Amended and Restated Trust Agreement of the
Trust and amendments and restatements thereof, and other similar agreements (and
other agreements not inconsistent therewith) (the "Transaction Documents") and
any Officer or Director of the Company may (A) on behalf of the Company, execute
and deliver, and cause the Company (1) to perform its obligations under, (2) to
satisfy any conditions required to be satisfied by the Company as a condition
precedent to the effectiveness of, and (3) to take such other actions as such
Officer or Director may deem appropriate with respect to, each of the
Transaction Documents; and (B) cause the Company to issue Company Common
Securities and the Company Preferred Securities on the Closing Date under the
Purchase Agreement relating to Company Preferred Securities in accordance with
this Agreement.
(ii) Subject to the provisions of Section 6.2 below, the
expression of any power or authority of the Board of Directors shall not in any
way limit or exclude any other power or authority which is not specifically or
expressly set forth in this Agreement.
(f) The determination as to any of the following matters, made
in good faith by or pursuant to the direction of the Board of Directors
consistent with this Agreement and in the absence of actual receipt of an
improper benefit in money, property or services or active and deliberate
dishonesty established by a court, shall be final and conclusive and shall be
binding upon the Company and every Securityholder: the amount of the net income
of the Company for any period and the amount of assets at any time legally
available for the payment of dividends, redemption of the Company Securities or
the payment of other distributions on the Company Securities; the amount of
paid-in surplus, net assets, other surplus, annual or other net profit, net
assets in excess of capital, undivided profits or excess of profits over losses
on sales of assets; the amount, purpose or time of creation of any gain or loss
on disposition of the Company's assets; the amount, purpose, time of creation,
increase or decrease, alteration or cancellation of any reserves or charges and
the propriety
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thereof (whether or not any obligation or liability for which such reserves or
charges shall have been created shall have been paid or discharged); the fair
value, or any sale, bid or asked price to be applied in determining the fair
value, of any asset owned or held by the Company; and any matters relating to
the acquisition, holding and disposition of any assets by the Company.
(g) The Board of Directors shall cause the Company to use its
available funds, after satisfaction of the Company's liabilities and other
obligations, for distributions to Securityholders in accordance with this
Agreement, and establishment by the Company of such reserves as the Board of
Directors shall deem to be necessary or appropriate to purchase Eligible
Investments in accordance with the Investment Policies, as such policies and
guidelines may be changed from time to time by the Board of Directors as
provided herein; provided that such new policies and guidelines cannot be
inconsistent with the express provisions of this Agreement.
Section 6.2 Limits on Board of Directors' Powers. Anything in
this Agreement to the contrary notwithstanding, the Board of Directors shall not
cause or permit the Company to, and the Company shall not:
(a) acquire any assets other than as expressly
provided in the Investment Policies;
(b) acquire any securities or other assets that give
the Company U.S. source income;
(c) for so long as any Trust Certificates settle and
clear through DTC, Euroclear or Clearstream, acquire or own any
securities other than Eligible Investments;
(d) possess Company property for other than a Company
purpose;
(e) admit a Person as a Securityholder, except as
expressly provided in this Agreement;
(f) perform any act that would subject any Preferred
Securityholder to liability for (A) the debts, obligations and
liabilities of the Company in any jurisdiction, except as expressly
provided in this Agreement, or (B) a tax on "unrelated business taxable
income" under the Code as a consequence of such act;
(g) engage in any activity that would cause the
Company to be treated as an association or as a "publicly traded
partnership" (within the meaning of Section 7704 of the Code);
(h) engage in any activity that is not consistent
with the purposes of the Company, as set forth in Section 3.1 of this
Agreement; or
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(i) borrow money or enter into repurchase agreements,
reverse repurchase agreements, or other securities lending transactions
or take any action that could reasonably be expected to cause a Tax
Event, Capital Event or Investment Company Act Event to occur.
Section 6.3 Reliance by Third Parties. Persons dealing with
the Company are entitled to rely conclusively upon the power and authority of
the Board of Directors and of any duly appointed and acting Officers. In dealing
with the Board of Directors or any Officer duly appointed and acting as set
forth in this Agreement or in the By-Laws, no Person shall be required to
inquire into the authority of the Board of Directors or any such Officer to bind
the Company. Persons dealing with the Company are entitled to rely conclusively
on the power and authority of the Board of Directors or any Officer duly
appointed and acting as set forth in this Agreement or in the By-Laws.
Section 6.4 No Management by Any Preferred Securityholders.
Except as otherwise expressly provided herein, no Preferred Securityholder, in
its capacity as a Preferred Securityholder of the Company, shall take part in
the day-to-day management, operation or control of the business and affairs of
the Company. The Preferred Securityholders, in their capacity as Preferred
Securityholders of the Company, shall not be agents of the Company and shall not
have any right, power or authority to transact any business in the name of the
Company or to act for or on behalf of or to bind the Company.
Section 6.5 Business Transactions of the Common Securityholder
with the Company. Subject to Sections 6.1 and 6.2 of this Agreement and
applicable law, a Common Securityholder and any of its Affiliates may hold
deposits of, and enter into business transactions with, the Company and, subject
to applicable law, shall have the same rights and obligations with respect to
any such matter as Persons who are not a Common Securityholder or Affiliates
thereof.
Section 6.6 Outside Businesses. Any Director, Officer,
Securityholder or Affiliate thereof 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 Company, and the Company
and the Securityholders shall have no rights by virtue of this Agreement in and
to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Company, shall not be deemed wrongful or improper. No Director, Officer,
Securityholder or Affiliate thereof shall be obligated to present any particular
investment opportunity to the Company even if such opportunity is of a character
that, if presented to the Company, could be taken by the Company, and any
Director, Officer, Securityholder or Affiliate thereof 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 opportunity. Any
Securityholder or Affiliate thereof may engage or be interested in any financial
or other transaction with any other Securityholder or Affiliate thereof.
Section 6.7 Duties of Directors. The Board of Directors shall,
in considering any proposed action or inaction with respect to the Subordinated
Notes pursuant to Section 6.1(d), take into account the interest of both the
Preferred Securityholders and the Bank, as owner of the
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Company Common Securities. To the fullest extent permitted by law, no member of
the Board of Directors shall have any liability to any Preferred Securityholder
or the Company for not voting to take any enforcement action under the
Subordinated Notes in the event of a default by the Cayman Islands Branch in
performing any of its obligations (including payment obligations) thereunder.
Section 6.8 Additional Directors. If at any time the aggregate
of unpaid Definitive Dividends on the Company Preferred Securities or any
Company Parity Preferred Securities equals or exceeds an amount equal to three
semi-annual dividend payments, the holders of Company Preferred Securities and
any Company Parity Preferred Securities, voting together as a single class, will
have the exclusive right to elect two additional directors. Holders of a
majority of Company Preferred Securities and Company Parity Preferred Securities
may exercise this right by written consent or at a meeting of such holders
called for such purpose. This meeting may be called at the request of any holder
of Company Preferred Securities or Company Parity Preferred Securities. This
right will continue either until all unpaid Definitive Dividends have been paid
in full or until full dividends have been paid on the Company Preferred
Securities for two consecutive dividend periods. While this right continues, any
vacancy in the office of the additional directors may be filled only by the
holders of Company Preferred Securities and Company Parity Preferred Securities
voting as described above.
ARTICLE VII
COMPANY SECURITIES; SUBORDINATED NOTES
Section 7.1 Company Common Securities.
(a) The Bank, as the initial Common Securityholder, shall be
deemed to have been issued 2,000 Company Common Securities upon its designation
as the Common Securityholder pursuant to Section 2.2 of this Agreement. Upon
issuance as provided in this Agreement, the Company Common Securities so issued
shall be deemed duly authorized, validly issued, fully paid and nonassessable.
(b) Company Common Securities shall not be evidenced by any
certificate or other written instrument, but shall only be evidenced by this
Agreement.
(c) The Common Securityholders will receive dividends out of
interest payments received by the Company on the Subordinated Notes and other
Eligible Investments, if any, not required to be applied to fund dividends with
respect to the Company Preferred Securities or expenses of the Company. However,
as long as the Company Preferred Securities or the Company Parity Preferred
Securities are outstanding, no dividends or other distributions (including
redemptions and purchases) may be made with respect to Company Common Securities
unless full dividends on all Company Preferred Securities and Company Parity
Preferred Securities have been paid as provided in Section 7.3.
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(d) Subject to the rights, if any, of the Preferred
Securityholders (to the limited extent provided in Section 8.1), all voting
rights are vested in the Company Common Securities. The Common Securityholders
are entitled to vote in proportion to the stated amounts represented by their
Company Common Securities.
(e) If the Company dissolves, liquidates or winds up (whether
voluntarily or involuntary) after all debts and liabilities of the Company have
been satisfied and there have been paid or set aside for the Preferred
Securityholders the full preferential amounts to which such holders are
entitled, the Common Securityholders will be entitled to share equally and
ratably in any assets remaining.
Section 7.2 General Provisions Regarding Company Preferred
Securities and Company Parity Preferred Securities.
(a) There is hereby authorized for issuance and sale Company
Preferred Securities having an aggregate initial liquidation preference of $-.
The specific designation, dividend rate, liquidation preference, redemption
terms, voting rights, exchange limitations and other powers, preferences and
special rights and limitations of the Company Preferred Securities are set forth
in Section 7.3 hereof. Upon issuance as provided in this Agreement, the Company
Preferred Securities and the Company Parity Preferred Securities (if any) so
issued, shall be deemed duly authorized, validly issued, fully paid and
nonassessable.
The Company has the power to create and issue additional
preferred limited liability company interests in the Company that are junior to
the Company Preferred Securities as to payment of dividends and payments of
amounts upon dissolution, liquidation or winding up of the Company ("Company
Junior Securities") or that are on a parity with the Company Preferred
Securities as to payment of dividends and payments of amounts upon dissolution,
liquidation or winding up of the Company ("Company Parity Preferred Securities")
and admit the purchasers of such limited liability company interests to the
Company as members of the Company. So long as any Company Preferred Securities
remain outstanding, additional Company Parity Preferred Securities may be issued
only with the consent of the holders of two-thirds (based on the aggregate
liquidation preference) of the Company Preferred Securities and Company Parity
Preferred Securities, voting together as a single class, and only if the Bank
Subordinated Guarantee is amended so that such Company Parity Preferred
Securities benefit from the Bank Subordinated Guarantee in the same manner as
the Company Preferred Securities without any adverse effect on holders of the
Company Preferred Securities. See Section 7.3(h).
The Company may not, without the consent of each Preferred
Securityholder, authorize, create or increase the authorized amount of, or issue
any class or series of equity securities of or limited liability company
interests in the Company, or any warrants, options or other rights convertible
or exchangeable into any class or series of any equity securities of or limited
liability company interests in the Company, ranking prior to the Company
Preferred Securities, either as to dividend rights or rights on dissolution,
winding up or termination of the Company.
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Subject to the express provisions of this Agreement and of the
By-Laws, the Board of Directors shall have authority to fix the terms of Company
Parity Preferred Securities that may be issued by the Company by adopting in
accordance with the provisions of this Agreement a Certificate of Designations
relating to such Company Parity Preferred Securities that shall set forth the
preferences and other terms of such series, including without limitation the
following: (1) the title and stated value of such series; (2) the number or
amount by aggregate liquidation preference of securities of such series offered
and the initial liquidation preference per security or minimum denomination of
such series; (3) the dividend rate(s), period(s), and/or payment date(s) or
method(s) of calculation thereof applicable to such series; (4) whether such
Company Parity Preferred Securities are cumulative or not and, if cumulative,
the date from which dividends on such Company Parity Preferred Securities shall
accumulate; (5) the provisions for a sinking fund, if any, for such series; (6)
the provisions for redemption, if applicable, of such series; (7) any voting
rights of such series; (8) the relative ranking and preferences of such series
as to dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of the Company; (9) any limitations on issuance of any Company
Parity Preferred Securities ranking senior to or on a parity with such series of
Company Preferred Securities as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; (10) whether such
Company Parity Preferred Securities will be eligible for issuance as book-entry
Company Parity Preferred Securities; and (11) any other specific terms,
preferences, rights, limitations or restrictions of such series. Upon such
adoption by the Board of Directors, each such Certificate of Designations shall
thereupon be incorporated into and deemed to be part of this Agreement.
(b) All Company Preferred Securities and Company Parity
Preferred Securities shall rank senior to all Company Junior Securities in
respect of the right to receive dividends or other distributions and the right
to receive payments out of the assets of the Company upon voluntary or
involuntary dissolution, winding-up or termination of the Company in accordance
with the provisions hereof (subject to the provisions of Section 7.3 or any
Certificate of Designations). All Company Preferred Securities and Company
Parity Preferred Securities redeemed, purchased or otherwise acquired by the
Company shall be canceled. The Company Preferred Securities and Company Parity
Preferred Securities shall be issued in registered form only.
(c) Neither the Bank, the Company nor any of their respective
Affiliates shall have the right to vote or give or withhold consent with respect
to any Company Preferred Security or Company Parity Preferred Security owned by
it, directly or indirectly, and, for purposes of any matter upon which the
Preferred Securityholders may vote or give or withhold consent as provided in
this Agreement, Company Preferred Securities and Company Parity Preferred
Securities owned by any of the Bank, the Company or any of their respective
Affiliates shall be treated as if they were not outstanding.
(d) Anything in this Agreement to the contrary
notwithstanding:
(i) as long as any Company Preferred Securities are
outstanding, no Company Parity Preferred Securities may be redeemed or
repurchased unless the Company concurrently redeems an approximately
equal proportion of the aggregate liquidation
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preference of the outstanding Company Preferred Securities or each
Rating Agency then rating the Company Preferred Securities informs the
Company in writing that the redemption or repurchase of such Company
Parity Preferred Securities would not result in a reduction or
withdrawal of the rating then assigned by that Rating Agency to the
Company Preferred Securities, and
(ii) as long as any Company Preferred Securities or
Company Parity Preferred Securities remain outstanding, the Company may
issue or authorize the issuance of any Company Preferred Securities or
Company Parity Preferred Securities only with the approval of the
holders of two-thirds (based on the aggregate liquidation preference)
of the Company Preferred Securities and Company Parity Preferred
Securities, voting together as a single class, and only if the Bank
Subordinated Guarantee is amended prior thereto so that such additional
Company Parity Preferred Securities benefit from the Bank Subordinated
Guarantee in substantially the same manner as the Company Preferred
Securities without any adverse effect on the holders of the Company
Preferred Securities.
(e) In purchasing Company Preferred Securities or Company
Parity Preferred Securities, each Preferred Securityholder agrees with the Bank
and the Company that the Bank, the Company and the Preferred Securityholders (i)
will treat Preferred Securityholders as holders of the Company Preferred
Securities or Company Parity Preferred Securities for all purposes, and not as
the holders of an interest in the Bank, the Cayman Islands Branch or in any
other Person and (ii) will follow allocations made by the Company pursuant to
Section 4.4 of this Agreement.
Section 7.3 Company Preferred Securities.
(a) Designation. There shall hereby be designated as a series
of preferred limited liability company interests in the Company a series
identified as the Company's "-% Noncumulative Company Preferred Securities",
liquidation preference $1,000 per security and aggregate liquidation preference
$- (the "Company Preferred Securities").
The holders of the Company Preferred Securities (or of any
other Company Security) will have no preemptive rights with respect to any
limited liability company interests in the Company or any other securities of
the Company convertible into or carrying rights or options to purchase any such
securities. Company Preferred Securities will not be convertible into Company
Common Securities or any other class or series of limited liability company
interests in the Company and will not be subject to any sinking fund or other
obligation of the Company for its repurchase or retirement.
A Company Preferred Security shall be represented by the
corresponding Company Preferred Certificate.
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(b) Dividends.
(i) Dividends on the Company Preferred Securities
will be payable from the date of initial issuance on a noncumulative
basis, semi-annually in arrears on April 1 and October 1 of each year
through - 2011 and thereafter quarterly in arrears on January 1, April
1, July 1 and October 1 (or if any such day is not a Business Day, the
next Business Day, but without any additional interest or other payment
in respect of such delay) (each a "Dividend Payment Date" and each
period from and including a Dividend Payment Date, or the date of
initial issuance as applicable, to but not including the next Dividend
Payment Date, a "Dividend Period") for the Dividend Period then ending,
but only if the Company has legally available funds for such purpose
and satisfies the other qualifications described below. Dividends will
be payable on the liquidation preference (i) for each Dividend Period
through the Dividend Period ending on the Dividend Payment Date in -
2011, at a fixed rate per annum on the liquidation preference equal to
-% (calculated on the basis of a year of twelve 30-day months) and (ii)
for each dividend period commencing on such Dividend Payment Date and
thereafter, at a floating rate per annum on the liquidation preference
equal to 3.07% above three-month LIBOR (calculated on the basis of the
actual number of days elapsed in a 360-day year). Dividends will be
mandatorily due and payable in the circumstances described in Section
7.3(b)(ii) below, except that dividends will never be mandatorily due
and payable if the Capital Limitation described below in Section
7.3(b)(iii) applies. If dividends on a Dividend Payment Date are
neither mandatorily due and payable nor prohibited by application of
the Capital Limitation, then (i) payment of dividends on the Company
Preferred Securities will be limited by the Bank's Available
Distributable Profits (see Section 7.3(b)(iv), below) and (ii) if the
Bank delivers, on or before the tenth Business Day immediately
preceding such Dividend Payment Date, an instruction (a "No Dividend
Instruction") to the Company not to pay dividends on such Dividend
Payment Date or to pay less than full dividends on such Dividend
Payment Date, dividends payable on the related Dividend Payment Date
will be limited as provided in such No Dividend Instruction (see
Section 7.3(b)(v) below).
If any dividends will be payable on the Company
Preferred Securities on a day that is not a Business Day, those
dividends will instead be paid on the next Business Day. No interest or
other payment will be due as a result of any such adjustment.
LIBOR, with respect to a Determination Date, means
the rate (expressed as a percentage per annum) for deposits in U.S.
dollars for a three-month period commencing on the second London
Banking Day immediately following that Determination Date that appears
on Telerate Page 3750 as of 11:00 a.m. (London time) on that
Determination Date. If such rate does not appear on Telerate Page 3750,
LIBOR will be determined on the basis of the rates at which deposits in
U.S. dollars for a three-month period commencing on the second London
Banking Day immediately following that Determination Date and in a
principal amount equal to an amount of not less than $1,000,000 that is
representative for a single transaction in such market at such time,
are offered to prime banks in the London interbank market by four major
banks in the London interbank market selected by the
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Calculation Agent, after consultation with the Company, at
approximately 11:00 a.m., London time, on that Determination Date.
The Calculation Agent will request the principal
London office of each of such banks to provide a quotation of its rate.
If at least two such quotations are provided, LIBOR with respect to
that Determination Date will be the arithmetic mean of such quotations.
If fewer than two quotations are provided, LIBOR in respect of that
Determination Date will be the arithmetic mean of the rates quoted by
three major money center banks in New York City selected by the
Calculation Agent, after consultation with the Company, at
approximately 11:00 a.m., New York City time, on that Determination
Date for loans in U.S. dollars to leading European banks for a
three-month period commencing on the second London Banking Day
immediately following that Determination Date and in a principal amount
equal to an amount of not less than $1,000,000. However, if the banks
selected by the Calculation Agent to provide quotations are not quoting
as mentioned in this paragraph, LIBOR for the applicable period will be
the same as LIBOR as determined on the previous Determination Date.
All percentages resulting from any calculations on
the Company Preferred Securities will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upward (e.g., 9.876545%
(or .09876545) being rounded to 9.87655% (or .0987655)), and all dollar
amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward).
(ii) The Company is required to pay dividends on the
Company Preferred Securities in three circumstances, as follows:
(A) If the Bank declares or pays dividends
or makes any other payment or distribution on any Bank Junior
Obligations and the Capital Limitation does not apply, then
the Company will be required to pay full dividends on the
Company Preferred Securities during the one-year period
beginning on and including the earlier of the date on which
such dividend was declared or the date on which such dividend
or other payment was made.
(B) If the Bank or any of its subsidiaries
redeems, repurchases or otherwise acquires any Bank Parity
Securities or Bank Junior Obligations for any consideration,
except by conversion into or exchange for shares or Bank
Junior Obligations and except as described below (and provided
that the Capital Limitation does not apply), then the Company
will be required to pay dividends on the Company Preferred
Securities during the one-year period beginning on and
including the date on which such redemption, repurchase or
other acquisition occurred.
(C) If (x) the Bank or any of its
subsidiaries declares or pays any dividends or makes any other
payment or distribution on any Bank Parity Securities
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on any date and (y) during the Relevant Period ending on and
including such date there occurred a Dividend Payment Date as
to which the Company paid no dividends or less than full
dividends on the Company Preferred Securities, and provided
that the Capital Limitation does not apply, then on that date
the Company will be required to pay a special dividend on the
Company Preferred Securities. The special dividend will be
payable on that date whether or not that date is otherwise a
Dividend Payment Date and, if it is a Dividend Payment Date,
will be in addition to any other dividends required to be paid
on such Dividend Payment Date. The special dividend will be in
an amount that, when taken together with dividends previously
paid on the Company Preferred Securities during the Relevant
Period, represents the same proportion of full dividends on
the Company Preferred Securities for all Dividend Payment
Dates during the Relevant Period that the dividend on Bank
Parity Securities paid on such date bears to full dividends on
such Bank Parity Securities for the Relevant Period.
Notwithstanding paragraph (B) above, the Company will not be required
to pay dividends solely as a result of (a) repurchases, redemptions or
other acquisitions of Bank Parity Securities or ordinary shares in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend
reinvestment or shareholder share purchase plan or in connection with
the issuance of Bank Parity Securities or Bank Junior Obligations (or
securities convertible into or exercisable for such Bank Parity
Securities or Bank Junior Obligations) as consideration in an
acquisition transaction, (b) market-making in the Bank Parity
Securities or ordinary shares as part of the securities business of the
Bank or any of its subsidiaries, (c) the purchase of fractional
interests in shares of Bank Parity Securities or Bank Junior
Obligations pursuant to the conversion or exchange provisions of such
Bank Parity Securities or Bank Junior Obligations or the security being
converted or exchanged, (d) any declaration of a dividend in connection
with any shareholder's rights plan, or the issuance of rights, shares
or other property under any shareholder's rights plan, or the
redemption or repurchase of rights pursuant to any such plan, or (e)
any dividend in the form of shares, warrants, options or other rights
where the dividend shares or the shares issuable upon exercise of such
warrants, options or other rights are the same shares as that on which
the dividend is being paid or ranks pari passu with or junior to such
shares.
Any Dividend Payment Date or other date on which
dividends on the Company Preferred Securities are required to be paid
as described in paragraph (A), (B) or (C) above is a "Mandatory
Dividend Payment Date." The amount of dividends required to be paid on
any Mandatory Dividend Payment Date (after giving effect to the Capital
Limitation, if applicable) is called the "Mandatory Dividend Payment
Amount". If a Dividend Payment Date is a Mandatory Dividend Payment
Date, the Company will be required to pay the Mandatory Dividend
Payment Amount as dividends on that date whether or not there are
Available Distributable Profits and whether or not interest is paid on
the Subordinated Notes.
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(iii) The prohibition on the payment of dividends on
the Company Preferred Securities as described below is called the
"Capital Limitation".
Unless the Swiss Federal Banking Commission expressly
permits otherwise, the Company will not pay dividends on the Company
Preferred Securities on any Dividend Payment Date (whether or not it is
a Mandatory Dividend Payment Date) if on such date the Bank is not in
compliance, or because of a distribution by the Bank or any of its
subsidiaries of profits of the Bank (including a payment of dividends
on the Company Preferred Securities) would not be in compliance, with
the Swiss Federal Banking Commission's minimum capital adequacy
requirements applicable to the Bank as then in effect.
(iv) The limitation or prohibition on the payment of
dividends on the Company Preferred Securities as described below is
called the "Distributable Profits Limitation". The Distributable
Profits Limitation will not limit or prohibit payment of dividends up
to the Mandatory Dividend Payment Amount as to a Mandatory Dividend
Payment Date.
On or before the Dividend Payment Date in April of
each year, the Bank will deliver a certificate to the Company (a
"Distributable Profits Limitation Certificate") specifying: (i) the
Distributable Profits of the Bank for the financial year ending on the
preceding December 31 and (ii) the Available Distributable Profits for
payment of dividends on the Company Preferred Securities on the
Dividend Payment Dates in the then current year.
Unless the Company is required to pay as dividends
the Mandatory Dividend Payment Amount for a Mandatory Dividend Payment
Date, (A) the aggregate amount of dividends on the Company Preferred
Securities that the Company may pay on the Dividend Payment Date in
April of the current year may not exceed the lesser of full dividends
and the Available Distributable Profits set forth in such Distributable
Profits Limitation Certificate, and (B) the aggregate amount of
dividends on the Company Preferred Securities that the Company may pay
on any subsequent Dividend Payment Date in the current year (or in
January of the following year in the case of Dividend Payment Dates
occurring after - 2011) may not exceed the lesser of full dividends and
the remaining amount of such Available Distributable Profits (after
giving effect to the payment of dividends pursuant to this subclause or
subclause (A), above).
(v) Except for the Mandatory Dividend Payment Amounts
required to be paid on Mandatory Dividend Payment Dates:
(A) dividends on Company Preferred
Securities will not be payable on a Dividend Payment Date if,
on or before the tenth Business Day immediately preceding such
Dividend Payment Date, the Bank delivers a No Dividend
Instruction to the Company instructing it not to pay dividends
on such Dividend Payment Date; and
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(B) if, on or before the tenth Business Day
immediately preceding such Dividend Payment Date, the Bank
delivers a No Dividend Instruction to the Company limiting but
not prohibiting the payment of dividends on such Dividend
Payment Date, dividends on the Company Preferred Security will
be payable on such Dividend Payment Date only to the extent
permitted by such No Dividend Instruction.
If a No Dividend Instruction is given, then the
Company must promptly give notice to holders of the Company Preferred
Securities in the manner described in Section 7.3(i) of the fact that
it has received a No Dividend Instruction and the amount of dividends,
if any, that will be paid on the related Dividend Payment Date.
(c) Additional Amounts. If the Company or the Trust is
required to withhold any taxes, duties or other governmental charges with
respect to any payment of dividends on the Company Preferred Securities or the
Trust Preferred Securities, the Company will be required to pay as additional
amounts included in the mandatory dividend payment (and the Bank will be
required to include in any related payment made by it under the Bank
Subordinated Guarantee) an amount sufficient that the net amount received by the
holder of the Company Preferred Securities or Trust Preferred Securities, as
applicable, after the withholding, will not be less than the Mandatory Dividend
Payment Amount. However, the Company will not be required to pay any such
additional amounts to the extent that the taxes, duties or other governmental
charges are imposed or levied by Switzerland or the Cayman Islands because the
holder or beneficial owner of Trust Preferred Securities or Company Preferred
Securities (other than the Trust):
(i) has some connection with Switzerland or the
Cayman Islands, as applicable, other than being a holder or beneficial
owner of those Trust Preferred Securities or Company Preferred
Securities; or
(ii) has not made a declaration of non-residence in,
or other lack of connection with, Switzerland or the Cayman Islands, as
applicable, or any similar claim for exemption, if the Company has
given the beneficial owner of those Trust Preferred Securities or
Company Preferred Securities or its nominee at least 60 days' prior
notice of an opportunity to make the declaration or claim.
(d) Ranking and Liquidation Preference. The Company Preferred
Securities ordinarily will rank senior to the Company Common Securities as to
payment of dividends. However, the Bank has the right to shift the dividend
preference of the Company Preferred Securities to the Company Common Securities
on any Dividend Payment Dates to the extent that the Mandatory Dividend Payment
Amount then required to be paid as dividends on the Company Preferred Securities
(if any) is less than full dividends on the Company Preferred Securities. If the
Bank shifts the dividend preference to the Company Common Securities, the
interest payment received by the Company on the Subordinated Notes will be
returned as dividends to the Bank as holder of the Company Common Securities
before any dividends are paid on the Company Preferred Securities.
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As long as any Company Preferred Securities are outstanding,
the Bank, to the fullest extent permitted by law, will take no voluntary action
to cause the Company to dissolve or liquidate unless the Bank also liquidates.
If the Bank is liquidated, whether voluntarily or involuntarily (and whether in
connection with the occurrence of a Bankruptcy Event or otherwise), the Company
will be liquidated.
If the Company dissolves, liquidates, or winds up, then, after
the claims of any creditors of the Company are satisfied, the holders of the
Company Preferred Securities will be entitled to receive, before any
distribution of assets is made to the holders of Company Junior Securities upon
liquidation, liquidating distributions in respect of the Company Preferred
Securities in the amount of the liquidation preference of their Company
Preferred Securities plus an amount equal to unpaid dividends, if any, on the
Company Preferred Securities with respect to the current Dividend Period accrued
on a daily basis to the date of liquidation, plus an amount equal to unpaid
Definitive Dividends for any prior Dividend Period, but without interest and
without accumulation of unpaid Nondefinitive Dividends for any prior Dividend
Period.
Notwithstanding and as a limitation on the foregoing, the
holders of the Company Preferred Securities may not receive liquidating
distributions in a liquidation of the Company in an amount exceeding the
liquidating distributions to which they would have been entitled had they
instead owned preferred shares of the Bank having an aggregate liquidation
preference equal to the aggregate liquidation preference of the Company
Preferred Securities and bearing dividends at the rate of dividends applicable
to the Company Preferred Securities. The holders of the Company Common
Securities will be entitled to share pro rata in any remaining assets of the
Company only after holders of the Company Preferred Securities have received the
amounts described above.
(e) Voting Rights. Except as expressly required by applicable
law, or except as indicated below, the holders of Company Preferred Securities
will not be entitled to vote. In the event the holders of Company Preferred
Securities are entitled to vote as indicated below, each $1,000 liquidation
preference of Company Preferred Securities will be entitled to one vote on
matters on which holders of Company Preferred Securities are entitled to vote.
If at any time the aggregate of unpaid dividends equals or
exceeds an amount equal to three semi-annual or six quarterly dividend payments,
the holders of the Company Preferred Securities and any Company Parity Preferred
Securities, voting together as a single class, will have the exclusive right to
elect two additional Directors of their choosing. Holders of a majority (based
on the aggregate liquidation preference) of the Company Preferred Securities and
any Company Parity Preferred Securities may exercise this right by written
consent or at a meeting of holders of Company Preferred Securities and Company
Parity Preferred Securities called for such purpose. This right will continue
until all unpaid dividends have been paid in full or until full dividends have
been paid on the Company Preferred Securities and Company Parity Preferred
Securities for two consecutive Dividend Periods. While this right continues, any
vacancy in the office of the additional Directors may be filled only by the
holders of the Company Preferred Securities and any Company Parity Preferred
Securities voting as described above.
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A meeting of holders of Company Preferred Securities or
Company Parity Preferred Securities will be called at the request of holders of
25% (based on the aggregate liquidation preference) of the Company Preferred
Securities and any Company Parity Preferred Securities.
As long as any Company Preferred Securities and Company Parity
Preferred Securities are outstanding, the Company may not, without the consent
or vote of the holders of at least 662/3% of the outstanding Company Preferred
Securities and any Company Parity Preferred Securities (based on the aggregate
liquidation preference), voting together as a single class:
(i) change or remove any provision of this Agreement
(including the terms of the Company Preferred Securities), issue any
Company Parity Preferred Securities, redeem or repurchase any Company
Common Securities, or consent to a change in the booking location of
the issuance of the Subordinated Notes to a branch or other office of
the Bank other than the Cayman Islands branch of the Bank, in each
case, if such action would materially and adversely affect the rights,
preferences, powers or privileges of the Company Preferred Securities
and such Company Parity Preferred Securities;
(ii) to the fullest extent permitted by law,
liquidate, dissolve or terminate the Company without the concurrent
liquidation of the Bank;
(iii) amend or modify the Company's Investment
Policies; or
(iv) merge, convert, consolidate, reorganize or
effect any other business combination involving the Company, unless the
resulting entity will have no class or series of equity securities
either authorized or outstanding that ranks ahead of the Company
Preferred Securities as to dividends or as to the distribution of
assets upon liquidation, dissolution or winding up, except the same
number of shares of such equity securities with the same preferences,
conversion or other rights, voting powers, restrictions, limitations as
to dividends or other distributions, qualifications or terms or
conditions or redemption as the shares of equity securities of the
Company that are authorized and outstanding immediately prior to such
transaction, and each holder of Company Preferred Securities
immediately prior to such transaction shall receive securities with the
same preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions,
qualifications or terms or conditions or redemption of the resulting
entity as the Company Preferred Securities held by such holder
immediately prior to the transaction.
Notwithstanding the foregoing, without the consent of any holder of Company
Preferred Securities or Company Parity Preferred Securities, the Bank may amend
or supplement this Agreement:
(i) to correct or supplement any provision in this
Agreement which may be defective or inconsistent with any other
provision therein, or to make any other provisions with respect to
matters or questions arising under this Agreement, so long as any such
action shall not materially adversely affect the interests of the
holders of Company Preferred Securities; or
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(ii) to cure any ambiguity or correct any mistake.
As long as any Company Preferred Securities are outstanding,
the Company may not, without the consent of the holder of each outstanding
Company Preferred Security, authorize, create or increase the authorized amount
of, or issue any class or series of, any equity securities of or limited
liability company interests in the Company, or any warrants, options or other
rights convertible or exchangeable into any class or series of any equity
securities of or limited liability company interests in the Company, ranking
prior to the Company Preferred Securities, either as to dividend rights or
rights on dissolution, liquidation or winding-up of the Company.
(f) Redemption. The Company Preferred Securities may not be
redeemed before the Dividend Payment Date regularly scheduled to occur in -
2011, unless a Tax Event, an Investment Company Act Event or a Capital Event
occurs, in which case the Company may redeem the Company Preferred Securities in
whole (but not in part) at any time on not less than 30 nor more than 60 days'
notice. On or after the Dividend Payment Date regularly scheduled to occur in -
2011, the Company may redeem the Company Preferred Securities on any Dividend
Payment Date for cash, in whole or in part, on not less than 30 nor more than 60
days' notice.
The redemption price for such redemptions on or after the
regularly scheduled Dividend Payment Date in - 2011 will be:
(i) 100% of the liquidation preference of the Company
Preferred Securities being redeemed; plus
(ii) an amount equal to unpaid dividends, if any, on
the Company Preferred Securities with respect to the current Dividend
Period (whether or not declared) accrued on a daily basis to the date
fixed for redemption; plus
(iii) an amount equal to unpaid Definitive Dividends
for any prior Dividend Period, without interest and without
accumulation of unpaid Nondefinitive Dividends for any prior Dividend
Period.
The Company will also have the right to redeem the Company
Preferred Securities in whole (but not in part) at any time prior to the
Dividend Payment Date regularly scheduled to occur in - 2011, upon the
occurrence of a Tax Event, an Investment Company Act Event or a Capital Event.
The redemption price for a redemption arising out of a Tax Event resulting from
a Change in Tax Law and relating to the:
(i) imposition of tax on the Trust or the Company; or
(ii) the imposition of withholding tax on the
Company's payment of dividends on the Company Preferred Securities, on
the Trust's payment of dividends on the Trust Preferred Securities, on
the Bank's payment of interest on the Subordinated Notes or on the
Bank's payment under the Bank Subordinated Guarantee,
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(which are the events described in clauses (A), (B) and (C) of the definition of
"Tax Event") will be the redemption price described above for optional
redemptions. Otherwise, the redemption price for such redemptions will be:
(i) the Make Whole Amount; plus
(ii) an amount equal to unpaid dividends, if any, on
the Company Preferred Securities with respect to the current Dividend
Period (whether or not declared) accrued on a daily basis to the date
fixed for redemption; plus
(iii) an amount equal to unpaid Definitive Dividends
for any prior Dividend Period, without interest and without
accumulation of unpaid Nondefinitive Dividends for any prior Dividend
Period.
The Company will have until the Dividend Payment Date
regularly scheduled to occur in _______ 2011 after the occurrence of a Tax
Event, an Investment Company Act Event or a Capital Event to exercise its right
to redeem the Company Preferred Securities.
Any redemption of Company Preferred Securities must comply
with applicable regulatory requirements, including the prior approval of the
Swiss Federal Banking Commission if then required under applicable guidelines or
policies of the Swiss Federal Banking Commission. If dividends on any Company
Preferred Securities are unpaid, no Company Preferred Securities may be redeemed
unless all outstanding Company Preferred Securities are redeemed and the Company
may not purchase or otherwise acquire any Company Preferred Securities, except
pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding Company Preferred Securities.
The Company Preferred Securities will not be subject to any
sinking fund or mandatory redemption and will not be convertible into any other
securities of or limited liability company interests in the Company or any
securities of the Bank.
As long as any Company Preferred Securities are outstanding,
other Company Parity Preferred Securities may not be redeemed or repurchased
unless the Company concurrently redeems an approximately equal proportion of the
aggregate liquidation preference of the outstanding Company Preferred Securities
or each rating agency then rating the Company Preferred Securities informs the
Company in writing that the redemption or repurchase of such Company Parity
Preferred Securities would not result in a reduction or withdrawal of the rating
then assigned by that rating agency to the Company Preferred Securities.
If fewer than all of the outstanding Company Preferred
Securities are to be redeemed, the amount of Company Preferred Securities to be
redeemed shall be determined by the Board of Directors, and the securities to be
redeemed shall be determined by lot or pro rata as may be determined by the
Board of Directors in its sole discretion to be equitable; provided, that such
method satisfies any applicable requirements of any securities exchange on which
the Company
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Preferred Securities or any Trust Preferred Securities may then be listed and,
if the Company Preferred Securities or Trust Preferred Securities are then held
by DTC or its nominee in the form of a global security, any applicable
requirements of DTC. The Company will promptly notify the registrar and transfer
agent for the Company Preferred Securities in writing of the securities selected
for redemption and, in the case of any partial redemption, the liquidation
preference to be redeemed.
In the event that payment of the redemption price in respect
of any Company Preferred Securities is improperly withheld or refused and not
paid either by the Company or by the Bank pursuant to the Bank Subordinated
Guarantee, dividends on such Company Preferred Securities, shall continue to
accumulate from the date fixed for redemption to the date of actual payment of
such Redemption Price.
Any Company Preferred Securities redeemed shall be canceled.
There shall be no prescription period in respect of uncollected dividends on the
Company Preferred Securities.
The Preferred Securityholders, by acceptance of such Company
Preferred Securities, acknowledge and agree to the subordination provisions in,
and other terms of, the Company Preferred Securities Guarantee.
(g) Registrar and Transfer Agent. Wilmington Trust Company, or
another entity that the Bank may designate from time to time, will act as
registrar and transfer agent for the Company Preferred Securities.
Registration of transfers of Company Preferred Securities will
be effected without charge by or on behalf of the Company, but upon payment of
any tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Company will not be required to register or cause to
be registered the transfer of Company Preferred Securities after such Company
Preferred Securities have been called for redemption.
In the event of a partial redemption of the Company Preferred
Securities that would result in a delisting of the Trust Preferred Securities
from any securities exchange on which the Trust Preferred Securities are then
listed, the Company will redeem the Company Preferred Securities in whole.
(h) Notices. Notices to holders of the Company Preferred
Securities will be mailed by first-class mail, postage prepaid, to the holders'
addresses appearing in the Company's records.
(i) Governing Law. The Company Preferred Securities are
governed by, and shall be construed in accordance with, the laws of the State of
Delaware (without regard to principles of conflict of laws).
(j) Additional Information. For so long as any Company
Preferred Securities are outstanding, the Company will furnish to holders and
beneficial owners of Trust Preferred Securities
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and Company Preferred Securities and to prospective purchasers designated by
such holders upon request the information required to be delivered pursuant to
the Securities Act.
Section 7.4 General Provisions Regarding Subordinated Notes.
(a) The Company may sell the Subordinated Notes only upon the
affirmative vote of both a majority of the Board of Directors and the holders of
two-thirds (based on the aggregate liquidation preference) of the Company
Preferred Securities and Company Parity Preferred Securities (if any), voting
together as a single class.
(b) The Company may not agree to any modification or amendment
to the Subordinated Notes as long as any Company Preferred Securities or Company
Parity Preferred Securities (if any) are outstanding unless holders of
two-thirds (based on the aggregate liquidation preference) of the Company
Preferred Securities and Company Parity Preferred Securities (if any), voting as
a class, consent to such modification or amendment. Such consent to modification
or amendment of the Subordinated Notes shall not be required if (i) the proposed
amendment or modification would not materially and adversely affect the rights,
preferences, powers or privileges of the holders of the Company Preferred Stock
and (ii) the Company has received a letter from each of ▇▇▇▇▇'▇ Investors
Service Inc. and Standard & Poor's Ratings Services to the effect that such
amendment will not result in a downgrading of its respective rating then
assigned to the Company Preferred Securities.
ARTICLE VIII
VOTING AND MEETINGS
Section 8.1 Voting Rights of Preferred Securityholders. (a)
Except as shall be otherwise expressly provided in Section 7.3(e) or otherwise
herein, in the By-Laws or in any Certificate of Designations adopted by the
Board of Directors or as otherwise required by the Delaware Act, the Preferred
Securityholders shall have no right or power to vote on any question or matter
or in any proceeding or to be represented at, or to receive notice of, any
meeting of Securityholders.
(b) Notwithstanding that Preferred Securityholders holding
Company Preferred Securities are entitled to vote or consent under the
circumstances described in this Agreement, the By-Laws or any Certificate of
Designations, any of the Company Preferred Securities that are owned by the
Bank, the Common Securityholder, the Company or any of their respective
Affiliates, either directly or indirectly, shall not be entitled to vote or
consent and shall, for the purposes of such vote or consent, be treated as if
they were not outstanding except for Company Preferred Securities purchased or
acquired by the Bank or its Affiliates in connection with transactions effected
by or for the account of customers of the Bank or any of its Affiliates or in
connection with the distribution or trading of or market-making in connection
with such Company Preferred Securities; provided, however, that Persons (other
than Affiliates of the Bank) to whom the Bank or any of its Affiliates
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have pledged Company Preferred Securities may vote or consent with respect to
such pledged Company Preferred Securities pursuant to the terms of such pledge.
Section 8.2 Voting Rights of Common Securityholders. Except as
otherwise provided herein, and except as otherwise required by the Delaware Act,
all voting rights of the Securityholders shall be vested exclusively in the
Common Securityholders. The Company Common Securities shall entitle the Common
Securityholders to vote in proportion to their percentage ownership interest in
the Company upon all matters upon which Common Securityholders have the right to
vote. All Common Securityholders shall have the right to vote separately as a
class on any matter on which the Common Securityholders have the right to vote
regardless of the voting rights of any other Securityholder.
Section 8.3 Meetings of the Securityholders.
(a) Meetings of the Securityholders of any class or of all
classes of Securities may be called at any time by the Chairman of the Board (if
any), the President or the Board of Directors or as provided by this Agreement
or the By-Laws. A meeting of holders of Company Preferred Securities or Company
Parity Preferred Securities will be called at the request of holders of 25%
(based on the aggregate liquidation preference) of the Company Preferred
Securities and any Company Parity Preferred Securities. Except to the extent
otherwise provided, the following provisions shall apply to meetings of
Securityholders.
(b) Securityholders may vote in person or by proxy at such
meeting. Whenever a vote, consent or approval of Securityholders is permitted or
required under this Agreement, such vote, consent or approval may be given at a
meeting of Securityholders or by written consent.
(c) Each Securityholder may authorize any Person to act for it
by proxy on all matters in which a Securityholder is entitled to participate,
including waiving notice of any meeting, or voting or participating at a
meeting. Every proxy must be signed by the Securityholder or its
attorney-in-fact. Every proxy shall be revocable at the pleasure of the
Securityholder executing it at any time before it is voted.
(d) Each meeting of Securityholders shall be conducted by the
Board of Directors or by such other Person that the Board of Directors may
designate.
(e) Any required approval of Preferred Securityholders may be
given at a separate meeting of such Preferred Securityholders convened for such
purpose or at a meeting of Securityholders of the Company or pursuant to written
consent. The Board of Directors shall cause a notice of any meeting at which
Preferred Securityholders holding Company Preferred Securities or Company Parity
Preferred Securities are entitled to vote pursuant to Section 7.3, any
Certificate of Designations adopted by the Board of Directors or Article XIV of
this Agreement, or of any matter upon which action may be taken by written
consent of such Preferred Securityholders, to be mailed to each holder of record
of the Company Preferred Securities or Company Parity Preferred Securities. Each
such notice shall include a statement setting forth (i) the date of such meeting
or
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the date by which such action is to be taken, (ii) a description of any action
proposed to be taken at such meeting on which such Preferred Securityholders are
entitled to vote or of such matters upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
(f) Subject to Section 8.3(e) of this Agreement, the Board of
Directors, in their sole discretion, shall establish all other provisions
relating to meetings of Securityholders, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any
Securityholders, 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 IX
DIVIDENDS
Section 9.1 Dividends.
(a) Subject to the terms of this Article IX, Preferred
Securityholders shall receive periodic dividends, if any, in accordance with
Article VII of this Agreement or any Certificate of Designations duly adopted by
the Board of Directors, and Common Securityholders shall receive periodic
dividends and distributions, subject to Article VII of this Agreement or any
Certificate of Designations duly adopted by the Board of Directors, and to the
provisions of the Delaware Act, when, as and if declared by the Board of
Directors, in its discretion. A dividend shall constitute a distribution within
the meaning of the Delaware Act.
(b) A Securityholder shall not be entitled to receive any
dividend or other distribution with respect to any dividend payment date (and
any such dividend or other distribution shall not be considered due and
payable), irrespective of whether such dividend or other distribution is payable
automatically or has been declared by the Directors, until such time as the
Company shall have funds legally available for the payment of such dividend to
such Securityholder pursuant to the terms of this Agreement and the Delaware
Act, and notwithstanding any provision of Section 18-606 of the Delaware Act to
the contrary, until such time, a Securityholder shall not have the status of a
creditor of the Company, or the remedies available to a creditor of the Company;
provided however that a Preferred Securityholder and a holder of Preferred Trust
Securities may exercise such rights or remedies as provided herein or in any
other agreement or document.
Section 9.2 Limitations on Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution (including a dividend) to any Securityholder on account of a
Company Security if such distribution would violate Section 18-607 of the
Delaware Act or other applicable law.
Section 9.3 No Dividend Instruction.
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(a) At any time, and from time to time, the Common
Securityholder may, at its option, deliver to the Company a written instruction
in the form of Annex H hereof on or before the tenth Business Day immediately
preceding any dividend payment date for the Company Preferred Securities
instructing the Company not to pay dividends, or to limit but not prohibit
dividends, on such Dividend Payment Date (a "No Dividend Instruction"). As
described in Section 7.3(b)(v), upon receipt of a No Dividend Instruction with
respect to the Company Preferred Securities and except to the extent permitted
by such No Dividend Instruction, no dividend shall become due and payable on the
Company Preferred Securities (or any Company Parity Preferred Securities or
Company Junior Securities (other than the Company Common Securities)) on the
dividend payment date immediately succeeding the date of receipt of such
instruction. A No Dividend Instruction shall only be effective for the dividend
payment date immediately succeeding the date of receipt of such instruction by
the Company. If such dividend payment date is a Mandatory Dividend Payment Date,
then such No Dividend Instruction shall be of no force or effect. If at any time
there is more than one Common Securityholder, a No Dividend Instruction shall
not be effective until signed by all of the Common Securityholders.
(b) Notwithstanding Section 9.3(a), dividends on the Company
Preferred Securities will be definitive, due and payable on each Mandatory
Dividend Payment Date whether or not a No Dividend Instruction has been given or
is deemed given with respect to such Mandatory Dividend Payment Date.
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Financial Statements. The Board of Directors
shall, as soon as available after the end of each Financial Year of the Company,
cause to be prepared and mailed to each Common Securityholder of record the
audited financial statements of the Company for such Financial Year prepared in
accordance with generally accepted accounting principles. So long as any Company
Preferred Securities are outstanding, the Company will furnish to holders and
beneficial owners of Company Preferred Securities and to prospective purchasers
designated by such holders upon request, the most recent annual audited
financial statements and, if prepared, semi- annual unaudited financial
statements of the Company then available, together with a brief description of
the Company's business.
Section 10.2 Limitation on Access to Records. Each
Securityholder has the right, subject to this Agreement and to reasonable
standards established by the Board of Directors to obtain from the Company from
time to time upon reasonable request for any purpose reasonably related to such
Securityholder's interest as a member in the Company, information regarding the
affairs of the Company. Notwithstanding any provision of this Agreement, the
Board of Directors may, to the maximum extent permitted by law, keep, or cause
to be kept, confidential from the Preferred Securityholders, for such period of
time as the Board of Directors deems reasonable, any information the disclosure
of which the Board of Directors reasonably believes to be in the nature of trade
secrets or other information the disclosure of which the Board of Directors in
good faith believe is not in
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the best interest of the Company or could damage the Company or its business or
which the Company or the Board of Directors are required by law or by an
agreement with any Person to keep confidential.
Section 10.3 Accounting Method. For both financial and tax
reporting purposes and for purposes of determining profits and losses, the books
and records of the Company shall be kept on the accrual method of accounting
applied in a consistent manner and shall reflect all Company transactions and be
appropriate and adequate for the Company's business.
Section 10.4 Annual Audit. As soon as practical after the end
of each Financial Year, but not later than 90 days after such end, the financial
statements of the Company shall be audited by a firm of independent certified
public accountants selected by the Board of Directors, and such financial
statements shall be accompanied by a report of such accountants containing their
opinion. The cost of such audits shall be an expense of the Company and paid by
the Company.
ARTICLE XI
TAX MATTERS
Section 11.1 Company Tax Returns.
(a) The Common Securityholder is hereby designated as the
Company's "Tax Matters Partner" under Section 6231(a)(7) of the Code and shall
have all the powers and responsibilities of such position as provided in the
Code. The Tax Matters Partner is specifically directed and authorized to take
whatever steps the Bank, in its discretion, deems necessary or desirable to
perfect such designation, including filing any forms or documents with the
Internal Revenue Service and taking such other action as may from time to time
be required under the Treasury Regulations. Expenses incurred by the Tax Matters
Partner in its capacity as such shall be borne by the Company.
(b) The Tax Matters Partner shall cause to be prepared and
timely filed all tax returns required to be filed for the Company. The Tax
Matters Partner may, in its discretion, cause the Company to make or refrain
from making any federal, state or local income or other tax elections for the
Company that it deems necessary or advisable, including, without limitation, any
election under Section 754 of the Code or any successor provision.
Section 11.2 Tax Reports. The Tax Matters Partner shall, as
promptly as practicable and in any event within 90 days of the end of each
Financial Year, cause to be prepared and mailed by the Company to each Preferred
Securityholder of record Internal Revenue Service Schedule K-1 and any other
forms that are necessary or advisable in order to permit the Securityholders to
comply with U.S. federal and any other income tax requirements.
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Section 11.3 Taxation as a Partnership. The Company shall take
any necessary steps to be treated as a partnership for U.S. federal income tax
purposes and shall not file any election to be treated as anything other than a
partnership for such purposes.
Section 11.4 Taxation of Securityholders. As provided in
Section 4.4(b), profits shall be allocated to the Preferred Securityholders on a
when-paid basis. The Securityholders intend that allocations of income and loss
for U.S. federal income tax purposes be consistent with the economic allocations
of income under this Agreement.
ARTICLE XII
EXPENSES
Section 12.1 Expenses. Except as otherwise provided in this
Agreement, the Common Securityholder shall be responsible for, and shall pay,
all expenses out of funds of the Company determined by the Board of Directors to
be available for such purpose, provided that such expenses or obligations are
those of the Company or are otherwise incurred by or pursuant to the direction
of the Board of Directors in connection with this Agreement, including, without
limitation:
(a) all costs and expenses related to the business of
the Company and all routine administrative expenses of the Company,
including the maintenance of books and records of the Company, the
preparation and dispatch to the Securityholders of checks, financial
reports, tax returns and notices required pursuant to this Agreement
and the holding of any meetings of the Securityholders;
(b) all expenses incurred in connection with any
litigation involving the Company (including the cost of any
investigation and preparation) and the amount of any judgment or
settlement paid in connection therewith (other than expenses incurred
by any Director in connection with any litigation brought by or on
behalf of any Securityholder against such Director);
(c) all expenses for indemnity or contribution
payable by the Company to any Person;
(d) all expenses incurred in connection with the
collection of amounts due to the Company from any Person;
(e) all expenses incurred in connection with the
preparation of amendments or restatements to this Agreement; and
(f) all expenses incurred in connection with the
dissolution, winding up or termination of the Company.
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Section 12.2 Contribution to Funds of the Company. The Bank
will from time to time either (a) contribute (or cause others, including the
Stamford branch of the Bank, to contribute) to the Company such additional funds
as are necessary in order to enable the Company to pay its expenses described in
Section 12.1 on or before any date when any such expenses are due or (b)
directly pay the Company's expenses then due and payable and not otherwise paid.
ARTICLE XIII
TRANSFERS OF SECURITIES BY SECURITYHOLDERS
AND RELATED MATTERS
Section 13.1 Right of Assignee to Become a Preferred
Securityholder. An assignee of Company Preferred Securities or Company Parity
Preferred Securities shall become a Preferred Securityholder upon compliance
with the provisions of Section 13.5 of this Agreement.
Section 13.2 Events of Cessation of Security Ownership. A
Person shall cease to be a Securityholder upon the lawful assignment of all of
its Securities (including by any redemption or other repurchase by the Company)
or as otherwise provided herein.
Section 13.3 Persons Deemed Preferred Securityholders. The
Company may treat the Person in whose name any Company Preferred Certificate
shall be registered on the books and records of the Company as the sole holder
of such Company Preferred Certificate and of the Company Preferred Securities or
Company Parity Preferred Securities represented by such Company Preferred
Certificate for purposes of receiving dividends or other distributions and for
all other purposes whatsoever and, accordingly, shall, to the fullest extent
permitted by law, not be bound to recognize any equitable or other claim to or
interest in such Company Preferred Certificate or in the Company Preferred
Securities or Company Parity Preferred Securities represented by such Company
Preferred Certificate on the part of any other Person, whether or not the
Company shall have actual or other notice thereof. Notwithstanding the foregoing
or anything to the contrary herein, the Company agrees that at any time that the
Trust shall be a holder of any Company Preferred Securities, each holder of a
preferred certificate issued by the Trust shall, upon presentation to the
Company or the Registrar of reasonable evidence thereof, have the right to the
fullest extent permitted by law and without the need for any other action of any
other person, including the trustee under the Trust and any other holder of any
other of such preferred certificates, (a) to enforce, in the name of the Trust,
the Trust's rights under the Company Preferred Securities and the Bank
Subordinated Guarantee represented by the preferred certificates of such holder
and (b) to withdraw from the Trust upon written notice to such trustee and the
Company and hold directly the underlying Company Preferred Securities
represented by such preferred certificates (in which case such holder will be
entitled directly to enforce its rights under the Bank Subordinated Guarantee).
Section 13.4 The Company Preferred Certificates.
(a) Company Preferred Certificates evidencing fractions of
Company Preferred Securities or Company Parity Preferred Securities shall not be
issued. Each Company Preferred
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Certificate shall be signed, manually or by facsimile, by the President, any
Vice-President or the Secretary of the Company. Company Preferred Certificates,
other than Company Preferred Certificates held by a Trust, shall also be signed,
manually or by facsimile, by the Registrar. Company Preferred Certificates
bearing the signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Company shall be
validly issued notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Company Preferred
Certificates or did not hold such offices at the date of delivery of such
Company Preferred Certificates. A transferee of a Company Preferred Certificate
shall become a Securityholder, upon due registration of such Company Preferred
Certificate in such transferee's name pursuant to Section 13.5.
(b) Upon their original issuance, Company Preferred
Certificates evidencing the Company Preferred Securities or Company Parity
Preferred Securities shall be issued in the form of one or more Company
Preferred Certificates.
Section 13.5 Transfer of Company Preferred Certificates.
(a) The Board of Directors shall provide for the registration
and transfer of each class of Company Preferred Certificates in a record thereof
(each a "Securities Register") and shall appoint a securities registrar (the
"Registrar") and transfer agent (the "Transfer Agent") to act on its behalf;
provided, however, that without any action on the part of the Board of Directors
being necessary, Wilmington Trust Company is hereby appointed as the initial
Registrar and Transfer Agent. Subject to the other provisions of this Article
XIII, upon surrender for registration of transfer of any Company Preferred
Certificate, the Board of Directors shall cause one or more new Company
Preferred Certificates to be issued in the name of the designated transferee or
transferees. Every Company Preferred Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Board of Directors duly executed by the Preferred
Securityholder or his or her attorney duly authorized in writing. Any
registration of transfer shall be effected upon the Transfer Agent being
satisfied with the documents of title and identity of the Person making the
request upon the receipt by the Transfer Agent of any applicable certificate
relating to transfer restrictions as described below, and subject to such
reasonable regulations as the Company may from time to time establish. Each
Company Preferred Certificate surrendered for registration of transfer shall be
canceled by the Board of Directors. A transferee of a Company Preferred
Certificate shall be admitted to the Company as a Preferred Securityholder and
shall be entitled to the rights and subject to the obligations of a Preferred
Securityholder hereunder upon receipt by such transferee of a Company Preferred
Certificate. By acceptance of a Company Preferred Certificate, each transferee
shall be bound by this Agreement. The transferor of a Preferred Certificate, in
whole, shall cease to be a Preferred Securityholder at the time that the
transferee of such Company Preferred Certificate is admitted to the Company as a
Preferred Securityholder in accordance with this Section 13.5.
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(b) Upon surrender for registration of transfer of any Company
Preferred Certificate at the office or agency of the Company or the Registrar
maintained for that purpose, subject to Section 13.6, the Company shall deliver
or cause to be delivered to the Registrar in a form duly executed on behalf of
the Company in the manner provided for in Section 13.4(a), and the Registrar
shall countersign in the manner provided in and to the extent required by
Section 13.4(a) and deliver, in the name of the designated transferee or
transferees, one or more new Company Preferred Certificates in authorized
denominations of a like aggregate liquidation preference dated the date of
execution by such Registrar.
The Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Company Preferred Security or Company Parity
Preferred Securities during a period beginning at the opening of business 15
days before the day of selection for redemption of such Company Preferred
Securities or Company Parity Preferred Securities and ending at the close of
business on the day of mailing of the notice of redemption, or (ii) to register
the transfer of or exchange any Company Preferred Security or Company Parity
Preferred Securities so selected for redemption in whole or in part, except, in
the case of any such Company Preferred Security or Company Parity Preferred
Securities to be redeemed in part, any portion thereof not to be redeemed.
No service charge shall be made for any registration of
transfer or exchange of Company Preferred Certificates, but the Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Company Preferred
Certificates.
Section 13.6 Mutilated, Destroyed, Lost or Stolen Company
Preferred Certificates. If (a) any mutilated Company Preferred Certificate shall
be surrendered to the Registrar, or if the Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Company Preferred
Certificate, and (b) there shall be delivered to the Registrar and the Company
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Company Preferred Certificate
shall have been acquired by a bona fide purchaser, the Company shall sign, the
Registrar shall countersign to the extent required under Section 13.4(a), and
the Company and the Registrar shall make available for delivery (all in the
manner provided for in Section 13.4), in exchange for or in lieu of any
mutilated, destroyed, lost or stolen Company Preferred Certificate, a new
Company Preferred Certificate of like class, tenor and denomination. In
connection with the issuance of any new Company Preferred Certificate under this
Section 13.6, the Company or the Registrar 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 Company Preferred Certificate issued
pursuant to this Section shall constitute conclusive evidence of a limited
liability company interest in the Company corresponding to that evidenced by the
lost, stolen or destroyed Company Preferred Certificate, as if originally
issued, whether or not the lost, stolen or destroyed Company Preferred
Certificate shall be found at any time.
Section 13.7 Restrictions on Transfers of Securities.
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(a) Company Preferred Securities or Company Parity Preferred
Securities may not be sold or otherwise transferred unless such securities are
registered under the Securities Act or an exemption from the registration
requirements thereof is available, and the Company Preferred Certificates shall
bear a legend to this effect unless the Bank and the Company determine otherwise
in compliance with applicable law.
(b) No Company Preferred Security or Company Parity Preferred
Security shall be transferred, in whole or in part, except in accordance with
the terms and conditions set forth in this Agreement or any Certificate of
Designations. Any transfer or purported transfer of any Company Preferred
Security or Company Parity Preferred Security not made in accordance with this
Agreement shall be null and void.
(c) The Company Common Securities may be sold, assigned or
otherwise transferred by the Bank to a direct or indirect wholly owned
subsidiary of the Bank, which subsidiary shall be admitted as a member of the
Company with respect to the Company Common Securities transferred upon such
Person's execution and delivery of a counterpart of this Agreement.
ARTICLE XIV
MERGERS, CONSOLIDATIONS AND SALES
Section 14.1 The Company. The Company may not, without the
prior approval of holders of at least 66 2/3% of the outstanding Company
Preferred Securities and any Company Parity Preferred Securities (based on the
aggregate liquidation preference), voting as a single class, merge, convert,
consolidate, reorganize or effect any other business combination involving the
Company, unless the resulting entity will have no class or series of equity
securities either authorized or outstanding that ranks ahead of the Company
Preferred Securities or the Company Parity Preferred Securities as to dividends
or as to the distribution of assets upon liquidation, dissolution or winding up,
except the same number of shares of such equity securities with the same
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions or redemption as the shares of equity securities of the Company that
are authorized and outstanding immediately prior to such transaction, and each
holder of Company Preferred Securities or the Company Parity Preferred
Securities immediately prior to such transaction shall receive securities with
the same preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions or redemption of the resulting entity as the Company Preferred
Securities or the Company Parity Preferred Securities held by such holder
immediately prior to the transaction.
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ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 No Dissolution. The Company shall not be
dissolved by the admission of Securityholders. The death, insanity, retirement,
resignation, expulsion, bankruptcy or dissolution of a Securityholder, or the
occurrence of any other event which terminates the continued membership of a
Securityholder in the Company, shall not in and of itself cause the Company to
be dissolved and its affairs wound up. Upon the occurrence of any such event,
the business of the Company shall be continued without dissolution. The
bankruptcy of a Securityholder (as defined in Section 18-101(1) and 18-304 of
the Delaware Act) shall not cause a Securityholder to cease to be a member of
the Company. Notwithstanding any other provision of this Agreement, each
Securityholder waives any right it might have under the Delaware Act to agree in
writing to dissolve the Company upon the bankruptcy of a Securityholder, or the
occurrence of an event that causes a Securityholder to cease to be a member of
the Company.
Section 15.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up in accordance with the Delaware Act
if any of the following events occur:
(a) a decree or order by a court of competent
jurisdiction shall have been entered adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of the Company
under any applicable federal or state bankruptcy or similar law, and
such decree or order shall have continued undischarged and unstayed for
a period of 90 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver,
liquidator, trustee, assignee, sequestrator or similar official in
bankruptcy or insolvency of the Company or of all or substantially all
of its property, or for the winding up or liquidation of its affairs,
shall have been entered, and such decree or order shall have continued
undischarged and unstayed for a period of 90 days or the Company shall
institute proceedings to be adjudicated a voluntary bankrupt, or shall
consent to the filing of a bankruptcy proceeding against it, or shall
file a petition or answer or consent seeking reorganization,
arrangement, adjustment or composition under any applicable federal or
state bankruptcy or similar law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver,
liquidator, trustee, assignee, sequestrator or similar official in
bankruptcy or insolvency of the Company or of all or substantially all
of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts
generally as they become due and its willingness to be adjudged a
bankrupt, or limited liability company action shall be taken by the
Company in furtherance of any of the aforesaid purposes;
(b) the Bank is liquidated;
(c) the entry of a decree of judicial dissolution of
the Company under Section 18-802 of the Delaware Act;
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(d) in connection with the redemption, repurchase or
exchange of all outstanding Company Preferred Securities;
(e) the written consent of all Securityholders;
(f) at any time there are no members of the Company
unless the Company is continued in accordance with the Delaware Act or
this Agreement; or
(g) the entry of a judgment initiating judicial
liquidation in respect of the Bank under Swiss law or any other
liquidation of the Bank under Swiss law.
Section 15.3 Notice of Dissolution. Upon the dissolution of
the Company, the Board of Directors shall promptly notify the Securityholders of
such dissolution.
Section 15.4 Liquidation. Upon dissolution of the Company, the
Board of Directors or, in the event that the dissolution is caused by an event
described in Sections 15.2(b) or (c) of this Agreement and there are no
Directors, a Person or Persons who may be approved by the Preferred
Securityholders holding not less than a majority in liquidation amount, as
liquidating trustees, shall immediately commence to wind up the Company's
affairs; provided, however, that a reasonable time shall be allowed for the
orderly liquidation of the assets of the Company and the satisfaction of
liabilities to creditors so as to minimize the losses attendant upon a
liquidation. The proceeds of liquidation shall be distributed, as realized, in
the manner provided in Section 18-804 of the Delaware Act, subject to the
provisions of Section 15.5.
Section 15.5 Certain Restrictions on Liquidation Payments. In
the event of any voluntary or involuntary dissolution of the Company (other than
as set forth in any Certificate of Designations), Preferred Securityholders
holding Company Preferred Securities or Company Parity Preferred Securities at
the time outstanding shall be entitled to receive out of the assets of the
Company legally available for distribution to Securityholders, before any
distribution of assets is made to Common Securityholders or any other Company
Junior Securities, liquidating distributions in respect of the Company Preferred
Securities or Company Parity Preferred Securities in the amount of the
liquidation preference, plus an amount equal to unpaid dividends, if any,
thereon with respect to the current Dividend Payment accrued on a daily basis to
the date of liquidation, plus an amount equal to unpaid Definitive Dividends for
any prior Dividend Period, but without interest and without accumulation of
unpaid Nondefinitive Dividends for any prior dividend period. If, upon any such
liquidation, the liquidating distribution can be paid only in part because the
Company has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Company on
the Company Preferred Securities or Company Parity Preferred Securities shall be
paid on a pro rata basis.
Section 15.6 Termination. The Company shall terminate when all
of the assets of the Company have been distributed in the manner provided for in
this Article XV, and the Certificate of Formation shall have been canceled in
the manner required by the Delaware Act.
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ARTICLE XVI
MISCELLANEOUS
Section 16.1 Amendments. This Agreement may be amended by a
written instrument executed by an Officer designated by the Board of Directors
without the consent of any Preferred Securityholder; provided, however, that no
amendment shall be made, and any such purported amendment shall be void and
ineffective, to the extent that such amendment (a) would have a material adverse
effect on a Preferred Securityholder (including, without limitation, amendments
to Sections 6.2 and 6.7), (b) would result in causing the Company to be treated
as anything other than a partnership for purposes of United States federal
income taxation would result in the Company being deemed to be required to
register under the Investment Company Act, or (c) has not received the prior
requisite approval of the holders of the Company Preferred Securities and the
Company Parity Preferred Securities, as applicable, as may be expressly provided
in this Agreement, the By-Laws or any Certificate of Designations duly adopted
by the Board of Directors.
Section 16.2 Amendment of Certificate of Formation. In the
event this Agreement shall be amended pursuant to Section 16.1, the Board of
Directors shall cause the Certificate of Formation to be amended to reflect such
change if it deems such amendment of the Certificate of Formation to be
necessary or appropriate.
Section 16.3 Successors. This Agreement shall be binding as to
the executors, administrators, estates, heirs and legal successors, or nominees
or representatives, of the Securityholders.
Section 16.4 Law; Severability. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
In particular, this Agreement shall be construed to the maximum extent possible
to comply with all of the terms and conditions of the Delaware Act. If,
nevertheless, it shall be determined by a court of competent jurisdiction that
any provisions or wording of this Agreement shall be invalid or unenforceable
under the Delaware Act or other applicable law, such invalidity or
unenforceability shall not invalidate the entire Agreement. In that case, this
Agreement shall be construed so as to limit any term or provision so as to make
it enforceable or valid within the requirements of applicable law, and, in the
event such term or provisions cannot be so limited, this Agreement shall be
construed to omit such invalid or unenforceable provisions. If it shall be
determined by a court of competent jurisdiction that any provision relating to
the distributions and allocations of the Company or to any fee payable by the
Company is invalid or unenforceable, this Agreement shall be construed or
interpreted so as (a) to make it enforceable or valid and (b) to make the
distributions and allocations as closely equivalent to those set forth in this
Agreement as is permissible under applicable law.
Section 16.5 Filings. Following the execution and delivery of
this Agreement, the Board of Directors shall cause to be promptly prepared any
documents required to be filed and recorded under the Delaware Act, and the
Board of Directors shall cause to be promptly filed and recorded each such
document in accordance with the Delaware Act and, to the extent required by
local law, to be filed and recorded or notice thereof to be published in the
appropriate place in each
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jurisdiction in which the Company may hereafter establish a place of business.
The Board of Directors shall also promptly cause to be filed, recorded and
published such statements of fictitious business name and any other notices,
certificates, statements or other instruments required by any provision of any
applicable law of the United States or any state or other jurisdiction which
governs the conduct of its business from time to time.
Section 16.6 Power of Attorney. Each Preferred Securityholder
does hereby constitute and appoint each Person specifically authorized by the
Board of Directors to act as its true and lawful representative and
attorney-in-fact, in its name, place and stead to make, execute, sign, deliver
and file (a) any amendment of the Certificate of Formation required because of
an amendment to this Agreement or in order to effectuate any change in the
ownership of the Company Securities, (b) any amendments to this Agreement made
in accordance with the terms hereof and (c) all such other instruments,
documents and certificates which may from time to time be required by the laws
of the United States of America, the State of Delaware or any other
jurisdiction, or any political subdivision or agency thereof, to effectuate,
implement and continue the valid and subsisting existence of the Company or to
dissolve the Company or for any other purpose consistent with this Agreement and
the transactions contemplated hereby.
The power of attorney granted hereby is coupled with an
interest and shall (a) survive and not be affected by the subsequent death,
incapacity, disability, dissolution, termination or bankruptcy of the Preferred
Securityholder granting the same or the transfer of all or any portion of such
Preferred Securityholder's Preferred Securities and (b) extend to such Preferred
Securityholder's successors, assigns and legal representatives.
Section 16.7 Exculpation.
(a) No Director or Officer shall have personal liability to
the Company or the Securityholders for monetary damages for breach of, in the
case of a Director, such Director's fiduciary duty (if any) or, in the case of a
Director or an Officer, for any act or omission performed or omitted by such
Director or Officer in good faith on behalf of the Company, except for such
Director's or Officer's gross negligence or willful misconduct.
(b) Each Director and Officer shall be fully protected in
relying in good faith upon the records of the Company and upon such information,
opinions, reports or statements presented to the Company by any Person as to
matters that such Director or Officer 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 Company, 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 Securityholders might properly be paid.
Section 16.8 Indemnification. To the fullest extent permitted
by applicable law, each Director and Officer shall be entitled to
indemnification from the Company for any loss, damage, claim or expense
(including reasonable attorney's fees) incurred by such Director or Officer
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by reason of any act or omission performed or omitted by such Director or
Officer in good faith on behalf of the Company and in a manner reasonably
believed to be within the scope of authority conferred on such Director or
Officer by this Agreement, except with respect to any act or omission determined
by a court of competent jurisdiction to have constituted gross negligence or
wilful misconduct of such Director or Officer; provided, however, that any
indemnity under this Section 16.8 shall be provided out of and to the extent of
Company assets only, and no Securityholder shall have any personal liability on
account thereof. The right to indemnification under this Section 16.8 is a
contract right. The Company may purchase and maintain insurance to protect any
director or officer against liability asserted against him or her, or incurred
by him or her, arising out of his or her status as such.
Without limiting the foregoing, the Company's directors shall
have no personal liability to the Company or its Securityholders for monetary
damages (i) for not voting to take enforcement action with respect to the
Subordinated Notes or other Affiliate Securities owned by the Company, if any,
prior to the occurrence of a Bankruptcy Event or (ii) at any time for breach of
any such director's fiduciary duty (if any) except for such director's gross
negligence or willful misconduct.
Section 16.9 Additional Documents. Each Preferred
Securityholder, upon the request of the Board of Directors, agrees to perform
all further acts and execute, acknowledge and deliver any documents that may be
reasonably necessary to carry out the provisions of this Agreement.
Section 16.10 Notices. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(i) If given to the Company, at the address set forth below:
UBS AG
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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With copies to:
UBS AG
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(ii) If given to any Securityholder, at the address set forth
in the Securities Register.
Subject to Section 7.3 of this Agreement or any Certificate of
Designations, each such notice, request or other communication shall be
effective (a) if given by telecopier, when transmitted to the number specified
in such registration books and the appropriate confirmation is received, (b) if
given by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid, or (c) if given by any
other means, when delivered at the address specified in the Securities Register.
Section 16.11 Nominee Letter. At the request of any Person who
is or has agreed to become a holder of Company Preferred Securities as a nominee
or on behalf of another Person, the Company shall provide such nominee with a
letter substantially in the form of Annex I.
Section 16.12 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original of this
Agreement and all of which together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Bank and the Common Securityholder
have executed this Agreement as of the date first above stated.
UBS AG
By: ______________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer- Americas and
Regional Chief Operating Officer
By: ______________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
Accepted and agreed by:
UBS Preferred Funding Trust II
By: Wilmington Trust Company,
not in its individual capacity,
but solely as Trustee
By: ____________________________
Name:
Title:
60
Annex A
to the Amended and Restated
Limited Liability Company Agreement
[Form of UBS AG Subordinated Guarantee Agreement]
A-1
61
SUBORDINATED GUARANTEE AGREEMENT
UBS AG
AS THE GUARANTOR
DATED AS OF - 2001
62
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions and Interpretation..........................2
ARTICLE II
TRUST INDENTURE ACT
Section 2.01. Trust Indenture Act; Application........................9
Section 2.02. Lists of Holders of Securities..........................9
Section 2.03. Reports by the Guarantee Trustee........................9
Section 2.04. Periodic Reports to Guarantee Trustee..................10
Section 2.05. Evidence of Compliance with Conditions Precedent.......10
Section 2.06. Events of Default; Waiver..............................10
Section 2.07. Event of Default; Notice...............................11
Section 2.08. Rights of Holders......................................11
Section 2.09. Conflicting Interests..................................12
Section 2.10. Powers, Duties and Rights of Guarantee Trustee.........12
Section 2.11. Certain Rights of Guarantee Trustee....................14
Section 2.12. Not Responsible for Recitals or Issuance of Guarantee..16
ARTICLE III
GUARANTEE TRUSTEE
Section 3.01. Guarantee Trustee; Eligibility.........................16
Section 3.02. Appointment, Removal and Resignation of Guarantee
Trustee................................................17
ARTICLE IV
GUARANTEE
Section 4.01. Guarantee..............................................18
Section 4.02. Delivery of Guarantor Certificate......................19
Section 4.03. Waiver of Notice and Demand............................19
Section 4.04. Obligations Not Affected...............................20
Section 4.05. Action Against Guarantor...............................21
Section 4.06. Independent Obligations................................21
63
Section 4.07. Taxes..................................................21
Section 4.08. Rights Not Separately Transferable.....................22
ARTICLE V
LIMITATIONS OF TRANSACTIONS; RANKING
Section 5.01. Limitation of Transactions..............................22
Section 5.02. Ranking................................................24
ARTICLE VI
TERMINATION
Section 6.01. Termination............................................24
ARTICLE VII
INDEMNIFICATION
Section 7.01. Exculpation............................................25
Section 7.02. Indemnification........................................25
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Successors and Assigns.................................26
Section 8.02. Amendments.............................................26
Section 8.03. Judgment Currency Indemnity............................26
Section 8.04. Assignment of the Guarantor............................27
Section 8.05. Notices................................................27
Section 8.06. Governing Law..........................................29
Section 8.07. Jurisdiction...........................................29
EXHIBIT A Guarantor's Certificate.................................A-1
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64
CROSS-REFERENCE TABLE(1)
SECTION OF TRUST INDENTURE ACT OF 1939, AS AMENDED SECTION OF GUARANTEE
310(a).............................................. 3.01(a)
310(b).............................................. 2.09, 3.01(c)
310(c).............................................. Inapplicable
311(a).............................................. 2.02(b)
311(b).............................................. 2.02(b)
311(c).............................................. Inapplicable
312(a).............................................. 2.02(a)
312(b).............................................. 2.02(b)
313................................................. 2.03
314(a).............................................. 2.04
314(b).............................................. Inapplicable
314(c).............................................. 2.05
314(d).............................................. Inapplicable
314(f).............................................. Inapplicable
315(a).............................................. 2.10(c), 2.10(d)
315(b).............................................. 2.07
315(c).............................................. 2.10(c)
315(d).............................................. 2.10(d)
316(a).............................................. 2.08
--------
(1) This Cross-Reference Table does not constitute part of the Guarantee
and shall not affect the interpretation of any of its terms or
provisions.
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65
SUBORDINATED GUARANTEE AGREEMENT (this "Guarantee"), dated as of -
2001, is executed and delivered by UBS AG, a bank organized under the laws of
Switzerland, with its principal executive offices in Zurich and Basel,
Switzerland (together with its successors, the "Guarantor"), and WILMINGTON
TRUST COMPANY, a bank and trust company incorporated under the laws of the State
of Delaware, in its capacity as trustee, for the benefit of the Initial Holder
and any subsequent holders from time to time of the Company Preferred Securities
(as defined herein) of UBS Preferred Funding Company LLC II, a Delaware limited
liability company (together with its successors, the "Company").
WITNESSETH
WHEREAS, pursuant to the Amended and Restated Limited Liability
Company Agreement of the Company (as amended from time to time, the "LLC
Agreement") dated as of the date hereof among the Guarantor, UBS Preferred
Funding Trust II (together with its successors, the "Trust") and the holders
from time to time of the Company Preferred Securities (as defined below), the
Company is issuing on the date hereof its -% Noncumulative Company Preferred
Securities, having an aggregate liquidation preference of $-, representing
preferred limited liability company interests in the Company (the "Company
Preferred Securities"); and
WHEREAS, in order to induce the Initial Holder to purchase the
Company Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth herein, to pay to the Initial
Holder and any subsequent Holders from time to time of the Company Preferred
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the purchase by the Initial
Holder and any subsequent Holder from time to time of Company Preferred
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of
the Initial Holder and any subsequent Holders from time to time of the Company
Preferred Securities.
66
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions and Interpretation. In this Guarantee,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.01;
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee, unless otherwise
specified; and
(e) a reference to the singular includes the plural and vice
versa.
"Additional Amounts" means an amount paid as further Dividends in
order that the net amounts received by the Holders of the Company Preferred
Securities or Trust Preferred Securities, as applicable, after withholding or
deduction of any Relevant Tax required by law to be deducted or withheld by the
Company or the Trust, as applicable, equals the amount which would have been
received in respect of the Company Preferred Securities or Trust Preferred
Securities, as applicable, in the absence of such withholding or deduction,
except that no Additional Amounts are payable to a Holder of the Company
Preferred Securities or Trust Preferred Securities, as applicable, with respect
to any Company Preferred Securities or Trust Preferred Securities, as
applicable, if the Relevant Jurisdiction is Switzerland or the Cayman Islands
(i) to the extent that such Relevant Tax is imposed or levied by virtue of such
Holder (or the beneficial owner) of such Company Preferred Securities or (other
than the Trust) Trust Preferred Securities having some connection with the
Relevant Jurisdiction, other than being a Holder (or beneficial owner) of such
Company Preferred Securities or Trust Preferred Securities or (ii) to the extent
that such Relevant Tax is imposed or levied by virtue of such Holder (or
beneficial owner) (other than the Trust) not having made a declaration of
non-residence in, or other lack of connection with, the Relevant Jurisdiction or
any similar claim for exemption, if the Guarantor or its agent has provided the
beneficial owner of such
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Company Preferred Securities or Trust Preferred Securities, or its nominee, with
at least 60 days' prior written notice of an opportunity to make such a
declaration or claim.
"Administrative Action" means any judicial decision, official
administrative pronouncement, published or private ruling, regulatory procedure,
notice or announcement (including any notice or announcement of intent to adopt
such procedures or regulations) by any legislative body, court, governmental
authority or regulatory body having appropriate jurisdiction.
"Affiliate" means, with respect to any specified person, any other
Person that directly or indirectly controls or is controlled by, or is under
common control with, such specified Person.
"Assets" means the consolidated gross assets of the Guarantor, all
as shown by the published audited consolidated balance sheet of the Guarantor,
all valued in such a manner as the Guarantor or any liquidator (as the case may
be) may determine and calculated in accordance with international accounting
standards.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Bankruptcy Event" has the meaning assigned to it in the LLC
Agreement.
"Base Liquidation Amount" means, with respect to each $1,000
liquidation preference of Company Preferred Securities at any date, an amount
equal to (i) $1,000 plus (ii) an amount equal to unpaid Dividends, if any, on
the Company Preferred Securities with respect to the Dividend Period in which
the liquidation of the Guarantor commenced (whether as a result of a Bankruptcy
Event or otherwise), accrued on a daily basis to the date of such commencement,
plus (iii) an amount equal to unpaid Definitive Dividends for any prior Dividend
Period, without interest and without accumulation of unpaid Nondefinitive
Dividends for any prior Dividend Period.
"Business Day" has the meaning assigned to it in the LLC Agreement.
A "Capital Loss" shall be deemed to occur if the Guarantor's assets
are less than the sum of (i) its Liabilities and (ii) one-half of its share
capital and statutory reserves, each as shown on and as calculated based on the
latest published annual unaudited consolidated balance sheet of the Guarantor.
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"Company" has the meaning assigned to it in the preamble to this
Guarantee.
"Company Common Securities" has the meaning assigned to it in the
LLC Agreement.
"Company Preferred Securities" has the meaning assigned to it in the
first recital to this Guarantee.
"Corporate Trust Office" means the principal trust office of the
Guarantee Trustee at which, at any particular time, its corporate trust business
shall be administered, which office at the date hereof is located at Wilmington
Trust Company, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Administration.
"Corresponding Amount" means, (i) for each $1,000 liquidation amount
of Trust Preferred Securities, $1,000 liquidation preference of Company
Preferred Securities and (ii) for each $1,000 liquidation preference of Company
Preferred Securities, $1,000 liquidation amount of Trust Preferred Securities.
"Covered Person" means any Holder or beneficial owner of Company
Preferred Securities.
"Definitive Dividends" has the meaning assigned to it in the LLC
Agreement.
"Dividend Payment Date" means _______ and _________ of each year
through _______ 2011, and thereafter, _________, _______, ______ and _________
of each year.
"Dividend Period" has the meaning assigned to it in the LLC
Agreement.
"Dividend Rate" means, on any day, the dividend rate applicable to
the Company Preferred Securities as determined pursuant to Section 7.3(b) of the
LLC Agreement.
"Dividends" means distributions on the Company Preferred Securities
in the amounts and in the manner set forth in the LLC Agreement.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee.
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"Guarantee" has the meaning set forth in the preamble to this
Guarantee.
"Guarantee Additional Amounts" has the meaning set forth in Section
4.07.
"Guarantee Payments" has the meaning assigned to it in Section 4.01.
"Guarantee Trustee" means Wilmington Trust Company, a bank and trust
company incorporated under the laws of the State of Delaware, and its
successors, in its capacity as trustee under this Guarantee, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee by executing a counterpart hereof and becoming a
party hereto, and thereafter means each such Successor Guarantee Trustee.
"Guarantor" has the meaning assigned to it in the preamble to this
Guarantee.
"Guarantor Certificate" has the meaning assigned to it in Section
4.02.
"Holder" means any holder, as registered on the books and records of
the Company or the Trust, of Company Preferred Securities or Trust Preferred
Securities, as the case may be; provided, however, that, in determining whether
the holders of the requisite percentage of Company Preferred Securities or Trust
Preferred Securities, as the case may be, have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor (other than the Trust).
"Indemnified Person" means the Guarantee Trustee, the Initial
Holder, any Affiliate of the Guarantee Trustee, or any officer, director,
shareholder, member, partner, employee, representative, nominee, custodian or
agent of the Guarantee Trustee.
"Initial Holder" means the Trust as the initial holder of the
Company Preferred Securities.
"Initial Subordinated Notes" means the Subordinated Promissory Notes
dated the date hereof issued by the Cayman Islands branch of the Guarantor.
"Investment Company Act" means the U.S. Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Liabilities" means the consolidated gross liabilities of the
Guarantor, all as shown by the latest published audited consolidated balance
sheet of the Guarantor, as
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adjusted for contingencies and for subsequent events, all valued in such a
manner as the Guarantor or any liquidator (as the case may be) may determine and
calculated in accordance with international accounting standards.
"Liquidation Distribution" means, with respect to each $1,000
liquidation preference of Company Preferred Securities, an amount equal to the
lesser of (i) the Base Liquidation Amount and (ii) an amount calculated as (A)
the amount of remaining assets of the Guarantor determined to be available for
distribution in respect of this Guarantee, the Parity Preferred Shares and the
Parity Guarantees in any insolvency of the Guarantor, without giving effect to
any distributions hereunder or under the terms of any Parity Guarantees,
multiplied by (B) a fraction, (x) the numerator of which is the Base Liquidation
Amount as of the date the liquidation of the Guarantor commenced (whether as a
result of a Bankruptcy Event or otherwise), and (y) the denominator of which is
the aggregate principal or face amount of all claims, without duplication, under
the Company Preferred Securities (determined as if the Company Preferred
Securities were Parity Preferred Shares), the Parity Preferred Shares and the
Parity Guarantees determined to be payable out of such remaining assets of the
Guarantor.
"LLC Agreement" has the meaning assigned to it in the first recital
to this Guarantee.
"Majority (or Other Stated Percentage) in liquidation amount of the
Company Preferred Securities" means, except as provided by the Trust Indenture
Act, a vote by the Holder(s) of more than 66 2/3% (or other stated percentage)
of the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid Dividends
to the date upon which the voting percentages are determined) of all Company
Preferred Securities, voting as a class.
"Mandatory Dividend Payment Amount" has the meaning assigned to it
in the LLC Agreement.
"Mandatory Dividend Payment Date" has the meaning assigned to it in
the LLC Agreement.
"Nondefinitive Dividends" has the meaning assigned to it in the LLC
Agreement.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person.
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"Ordinary Shares" means the ordinary shares of the Guarantor and any
other shares of the Guarantor's capital stock ranking junior to the Parity
Preferred Shares, if any, in each case issued by the Guarantor from time to
time.
"Parity Guarantee" means any guarantee issued by the Guarantor from
time to time of any equity preferred or preference shares issued by any
subsidiary of the Guarantor from time to time, if such guarantee ranks pari
passu with the Guarantor's obligations under this Guarantee.
"Parity Preferred Shares" means the most senior ranking equity
preferred or preference shares outstanding and issued by the Guarantor from time
to time.
"Parity Securities" means, collectively, the Parity Guarantees, the
Parity Preferred Shares and the Parity Subsidiary Securities.
"Parity Subsidiary Securities" means any parity securities issued by
a subsidiary of the Guarantor from time to time that are guaranteed by the
Guarantor under a Parity Guarantee.
"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.
"Potential Securityholder" has the meaning assigned to it in Section
5.01(d).
"Qualified Subsidiary" means a subsidiary of the Guarantor which
satisfies the conditions to be considered a "company controlled by the parent
company" under Rule 3a-5 of the Investment Company Act, or any successor
provision.
"Redemption Price" means, for each $1,000 liquidation preference of
Company Preferred Securities, in the case of a redemption of Company Preferred
Securities pursuant to Section 7.3(f) of the LLC Agreement, the amount
determined pursuant to Section 7.3(f) of the LLC Agreement.
"Relevant Jurisdiction" means Switzerland or the Cayman Islands.
"Relevant Tax" means any present or future taxes, duties,
assessments or governmental charges of whatever nature, imposed or levied by or
on behalf of any Relevant Jurisdiction or any authority therein or thereof
having the power to tax.
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"Responsible Officer" means, with respect to the Guarantee Trustee,
any officer within the Corporate Trust Office of the Guarantee Trustee with
direct responsibility for the administration of the Guarantee, including any
vice president, any assistant vice president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers 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.
"Solvent" means (i) the Guarantor is able to pay its debts as they
fall due and (ii) the Guarantor's Assets exceed its Liabilities (other than its
liabilities to persons who are not senior creditors).
"Subordinated Notes" means the Initial Subordinated Notes and, upon
maturity or redemption thereof, any successor subordinated notes that constitute
the assets of the Company.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 3.01.
"Trust" has the meaning assigned to it in the first recital to this
Guarantee.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of - 2001 and as from time to time amended, modified or supplemented,
among the Company, as grantor, Wilmington Trust Company, as trustee, and the
holders from time to time of the Trust Preferred Securities.
"Trust Indenture Act" means the U.S. Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Preferred Securities" means -% Noncumulative Trust Preferred
Securities issued by the Trust.
"UBS AG Senior Liabilities" has the meaning assigned to it in
Section 5.02(a).
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ARTICLE II
TRUST INDENTURE ACT
Section 2.01. Trust Indenture Act; Application.
(a) This Guarantee is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee and shall, to the
extent applicable, be governed by such provisions. A term defined in the Trust
Indenture Act has the same meaning when used in this Guarantee, unless otherwise
defined in this Guarantee or unless the context otherwise requires.
(b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 2.02. Lists of Holders of Securities.
(a) The Guarantee Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders of Company Preferred Securities. If the Guarantee Trustee
is not the Registrar, the Guarantor shall furnish to the Guarantee Trustee
semi-annually on or before April 1 and October 1 of each year through - 2011,
and thereafter on or before January 1, April 1, July 1 and October 1 of each
year, and at such other times as the Guarantee Trustee may request in writing, a
list, in such form and as of such date as the Guarantee Trustee may reasonably
require, containing all the information in the possession or control of the
Registrar, the Guarantor or any of its paying agents other than the Guarantee
Trustee as to the names and addresses of Holders of Company Preferred
Securities.
(b) The Guarantee Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.03. Reports by the Guarantee Trustee. Within 60 days after
May 15 of each year, the Guarantee Trustee shall provide to the Holders of the
Company Preferred Securities (and, for so long as the Initial Holder is the
Holder of the Company Preferred Securities, also to the Holders of the Trust
Preferred Securities), such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
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Section 2.04. Periodic Reports to Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee such documents, reports and information
as required by Section 314 (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act. Delivery of such
reports, information and documents to the Guarantee Trustee is for informational
purposes only and the Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).
Section 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee 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 and shall
include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
Section 2.06. Events of Default; Waiver. The Holders of a Majority
in liquidation amount of the Company Preferred Securities may, by vote, on
behalf of the Holders of all of the Company Preferred Securities, waive any past
Event of Default and its consequences except an Event of Default in respect of a
covenant or provision hereof which cannot be modified or amended without the
consent of each Holder of Company Preferred Securities (and, for so long as the
Initial Holder is the Holder of the Company Preferred Securities, also of each
Holder of Trust Preferred Securities). Upon such waiver, any such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee, but
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no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
Section 2.07. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence
of an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Company Preferred Securities (and, for so long as the Initial
Holder is the Holder of the Company Preferred Securities, also to the Holders of
the Trust Preferred Securities), notices of all Events of Default actually known
to a Responsible Officer of the Guarantee Trustee, unless such defaults have
been cured before the giving of such notice; provided, that, the Guarantee
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Company
Preferred Securities.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless a Responsible Officer of the Guarantee Trustee shall
have received written notice, or a Responsible Officer of the Guarantee Trustee
charged with the administration of this Guarantee shall have obtained actual
knowledge, of such Event of Default.
Section 2.08. Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the Company
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee.
(b) If the Guarantee Trustee fails to enforce its rights under this
Guarantee after a Holder of Company Preferred Securities has made a written
request, such Holder of Company Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Guarantee Trustee's
rights under Article 4, without first instituting a legal proceeding against the
Company, the Guarantee Trustee or any other person or entity. Notwithstanding
the foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder
of Company Preferred Securities may directly institute a proceeding in such
Holder's own name against the Guarantor for enforcement of Article 4 for such
payment.
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(c) Notwithstanding any other provision of this Agreement, for so
long as the Trust is the Holder of any Company Preferred Securities, any Holder
of Trust Preferred Securities shall have the right, upon the occurrence of an
Event of Default, to institute a suit directly against the Guarantor for
enforcement of its payment and other obligations hereunder with respect to a
Corresponding Amount of Company Preferred Securities.
Section 2.09. Conflicting Interests. The LLC Agreement shall be
deemed to be specifically described in this Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
Section 2.10. Powers, Duties and Rights of Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee for the
benefit of the Holders of the Company Preferred Securities, and the Guarantee
Trustee shall not transfer this Guarantee to any Person except a Holder of
Company Preferred Securities exercising his or her rights pursuant to Section
2.08(b) or to a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The
right, title and interest of the Guarantee Trustee shall automatically vest in
any Successor Guarantee Trustee, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee for the benefit of the Holders of the Company
Preferred Securities.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee, and no implied covenants shall be read into this
Guarantee against the Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.06 and is
actually known to a Responsible Officer of the Guarantee Trustee), the Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Guarantee shall be construed to relieve the
Guarantee Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
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(i) prior to the occurrence of any 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 Guarantee Trustee
shall be determined solely by the express provisions of this
Guarantee, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Guarantee, and no implied covenants or obligations
shall be read into this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee 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 Guarantee Trustee and conforming to the requirements of this
Guarantee; provided that in the case of any such certificates or
opinions that by any provision hereof are specifically required to
be furnished to the Guarantee Trustee, the Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Guarantee (but need not confirm
or investigate the accuracy of any mathematical calculations or
other facts stated therein);
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Guarantee 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 a Majority in liquidation
amount of the Company Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or the exercise of any trust or power conferred upon
the Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the
Guarantee 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 the Guarantee Trustee
shall have reasonable grounds for believing that the repayment of such
funds or liability, or indemnity, satisfactory
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to the Guarantee Trustee, against such expense, risk or liability, is not
assured to it under the terms of this Guarantee.
Section 2.11. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 2.10:
(i) The Guarantee Trustee may conclusively rely, and shall be
fully protected in acting or refraining from acting upon, any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document (whether in its original or
facsimile form) 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 Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Guarantee 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 Guarantor.
(iv) The Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Guarantee Trustee may, at the expense of the
Guarantor, consult with counsel of its selection, and the advice or
opinion of such counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with
such advice or opinion. Such counsel may be counsel to the Guarantor or
any of its Affiliates and may include any of its employees. The Guarantee
Trustee shall have the right at any time to seek instructions concerning
the administration of this Guarantee from any court of competent
jurisdiction.
(vi) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee
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Trustee such security and indemnity, satisfactory to the Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Guarantee 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 Guarantee Trustee; provided, that nothing contained in
this Section 2.11(a)(vi) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee.
(vii) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit but shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(viii)The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, nominees, custodians or attorneys, and the Guarantee
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 Guarantee Trustee or its agents
hereunder shall bind the Holders of the Company Preferred Securities, and
the signature of the Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of this
Guarantee, both of which shall be conclusively evidenced by the Guarantee
Trustee or its agent taking such action.
(x) Whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request written instructions from
the Holders of a Majority in liquidation amount of the Company Preferred
Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such written instructions are received and (iii)
shall be protected in conclusively relying on or acting in accordance with
such written instructions.
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(xi) The Guarantee Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Guarantee.
(b) No provision of this Guarantee shall be deemed to impose any
duty or obligation on the Guarantee 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 Guarantee 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 Guarantee Trustee
shall be construed to be a duty.
Section 2.12. Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representation as to the
validity or sufficiency of this Guarantee.
ARTICLE III
GUARANTEE TRUSTEE
Section 3.01. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the 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, and be permitted by the Securities and
Exchange Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation 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 3.01(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.
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(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 3.01(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 3.02(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
Section 3.02. Appointment, Removal and Resignation of Guarantee
Trustee.
(a) Subject to Section 3.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
Event of Default.
(b) The Guarantee Trustee shall not be removed in accordance with
Section 3.02(a) until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold office
until a Successor Guarantee Trustee shall have been appointed or until its
removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by
the Guarantee Trustee and delivered to the Guarantor, which resignation shall
not take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 3.02 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or omissions
to act of any Successor Guarantee Trustee.
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(f) Upon termination of this Guarantee or removal or resignation of
the Guarantee Trustee pursuant to this Section 3.02, and before the appointment
of any Successor Guarantee Trustee, the Guarantor shall pay to the Guarantee
Trustee all amounts to which it is entitled to the date of such termination,
removal or resignation.
ARTICLE IV
GUARANTEE
Section 4.01. Guarantee.
(a) The Guarantor irrevocably and unconditionally agrees with the
Guarantee Trustee, the Initial Holder and the Holders from time to time of the
Company Preferred Securities, subject to the limitations set forth in this
Guarantee, to pay in full to the Initial Holder and each subsequent Holder of
Company Preferred Securities, whether such rights under this Guarantee are
asserted by the Guarantee Trustee or directly by any such Holder (without
duplication of amounts theretofore paid to the Holders of the Company Preferred
Securities by the Company), regardless of any defense, right of set-off or
counterclaim that the Company may have or assert:
(i) on each Mandatory Dividend Payment Date, Dividends on the
Company Preferred Securities in an amount equal to the Mandatory Dividend
Payment Amount;
(ii) on each other Dividend Payment Date, Dividends (if any)
on the Company Preferred Securities that have become Definitive Dividends
as to such Dividend Payment Date because the Guarantor did not deliver a
No Dividend Instruction (as defined in the LLC Agreement);
(iii) on each Redemption Date, the Redemption Price payable
with respect to the Company Preferred Securities called for redemption by
the Company;
(iv) upon any voluntary or involuntary dissolution,
liquidation or winding up of the Company, the Liquidation Distribution;
and
(v) any Additional Amounts payable by the Company with respect
to the payment set forth in clauses (i) through (iv), above, under the LLC
Agreement;
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(collectively, the "Guarantee Payments"); provided that, if a Bankruptcy Event
has occurred as to the Guarantor, the Guarantee Payments payable under clause
(i), (ii), (iii) and (iv) above of this Section 4.01 shall be an amount equal to
the lesser of (A) the aggregate amount of Guarantee Payments pursuant to such
clause of this Section 5.01 without giving effect to this proviso and (B) an
amount calculated as (1) the remaining assets of the Guarantor in the related
bankruptcy or insolvency proceeding after satisfaction of all claims which, as a
matter of law, are prior to those of holders of this Guarantee or any Parity
Guarantee multiplied by (2) a fraction, (x) the numerator of which is the
aggregate amount of Guarantee Payments pursuant to such clause of this Section
4.01 without giving effect to this proviso and (y) the denominator of which is
the aggregate principal or face amount of all claims under this Guarantee and
the Parity Guarantees. All Guarantee Payments shall include interest accrued on
such Guarantee Payments, at a rate per annum equal to the stated Dividend Rate
of the Company Preferred Securities, since the date of the claim asserted under
this Guarantee relating to such Guarantee Payments.
(b) The Guarantor's obligation to make any of the payments listed in
(i) through (iii) of subsection (a) above may be satisfied by direct payment of
the required amounts (which shall be in United States dollars) by the Guarantor
to the Holders or by causing the Company to pay such amounts to the Holders.
Section 4.02. Delivery of Guarantor Certificate. As of each (x)
Dividend Payment Date with respect to which the Company has not paid the full
amount of Dividends at the Dividend Rate payable as contemplated by clause (i)
or (ii), as applicable, of Section 4.01(a) or (y) Redemption Date with respect
to which the Company has not paid the Redemption Price in full, the Guarantor
shall deliver an Officers' Certificate to the Guarantee Trustee within five
Business Days after such Dividend Payment Date or Redemption Date, as
applicable, substantially in the form attached as Exhibit A (the "Guarantor
Certificate").
Section 4.03. Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of this Guarantee and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Company or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
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Section 4.04. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Company of any express or implied
agreement, covenant, term or condition relating to the Company Preferred
Securities to be performed or observed by the Company;
(b) the extension of time for the payment by the Company of
all or any portion of the Dividends, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Company
Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Company
Preferred Securities; provided that nothing in this Guarantee shall affect
or impair any valid extension;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders of the Company Preferred Securities to enforce, assert
or exercise any right, privilege, power or remedy conferred on such
Holders pursuant to the terms of the Company Preferred Securities, or any
action on the part of the Company granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment
for the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Company or any of the assets of the Company;
(e) any invalidity of, or defect or deficiency in, the Company
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 4.04 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
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Section 4.05. Action Against Guarantor. The Guarantor waives
any right or remedy to require that any action be brought first against the
Company or any other person or entity before proceeding directly against the
Guarantor.
Section 4.06. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Company with respect to the Company Preferred Securities, and that the
Guarantor shall be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Guarantee notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
4.04. It is further understood that all rights of a Holder of a Company
Preferred Security against the Guarantor under this Guarantee, and all
corresponding obligations of the Guarantor to such Holder, are separate and
independent of the rights and corresponding obligations between the Guarantor
and the respective Holders of the other Company Preferred Securities.
Section 4.07. Taxes. All payments in respect of the Guarantee
Payments (including interest accrued thereon, if any) by the Guarantor shall be
made without withholding or deduction for or on account of any Relevant Tax,
unless the withholding or deduction of such Relevant Tax is required by law. In
that event, the Guarantor shall pay, as further Guarantee Payments, such
additional amounts as may be necessary in order that the net amounts received by
a Holder (or a third party on its behalf) after such withholding or deduction
will equal the amount which would have been received in respect of the Guarantee
Payments (including interest accrued thereon, if any) in the absence of such
withholding or deduction ("Guarantee Additional Amounts"), except that no such
Guarantee Additional Amounts shall be payable to a Holder (or a third party on
its behalf) with respect to any Guarantee Payments (including interest accrued
thereon, if any), (i) to the extent that such Relevant Tax is imposed or levied
by virtue of such Holder (or the beneficial owner of Company Preferred
Securities to which such Guarantee Payments relate) (other than the Trust)
having some connection with the Relevant Jurisdiction, other than being a Holder
of Company Preferred Securities (or beneficial owner of Company Preferred
Securities) or (ii) to the extent that such the Relevant Tax is imposed or
levied by virtue of such Holder (or beneficial owner) (other than the Trust) not
having made a declaration of non-residence in, or other lack of connection with,
the Relevant Jurisdiction or any similar claim for exemption, if the Guarantor
or its agent has provided the beneficial owner of such Company Preferred
Securities or its nominee with at least 60 days' prior written notice of any
opportunity to make such a declaration or claim.
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Section 4.08. Rights Not Separately Transferable. This
Guarantee is a guarantee for the benefit of each Holder from time to time of
Company Preferred Securities with respect to each Company Preferred Security
held by such Holder. Upon transfer of any Company Preferred Securities to a
third party, a Holder thereof shall no longer have any rights hereunder with
respect to such Company Preferred Securities. The rights under this Guarantee
with respect to a Company Preferred Security are not separately transferable
from such Company Preferred Security. The Initial Holder, by its execution of
this Guarantee, hereby accepts the rights under this Guarantee as initial
purchaser and acquirer of the Company Preferred Securities with the
understanding that such rights shall be transferred by operation of law to any
subsequent Holder acquiring a Company Preferred Security from the Initial Holder
or from a subsequent Holder of Company Preferred Securities.
ARTICLE V
LIMITATIONS OF TRANSACTIONS; RANKING
Section 5.01. Section 5.01. Limitation of Transactions.
(a) The Guarantor, for so long as any Company Preferred
Securities remain outstanding, shall not issue any preferred or preference
shares ranking senior on liquidation to its obligations under this Guarantee or
give any guarantee in respect of any preferred securities or preferred or
preference shares issued by any of its subsidiaries if such guarantee would rank
senior to this Guarantee, unless this Guarantee is amended to give the Holders
of the Company Preferred Securities such rights and entitlements as are
contained in or attached to such other guarantee so that this Guarantee ranks
pari passu with such guarantee and pari passu on liquidation with any declared
dividend or declared liquidation payments of such preferred or preference
shares.
(b) The Guarantor shall pay all amounts required to be paid
pursuant to this Guarantee in respect of any Dividends on the Company Preferred
Securities payable in respect of the most recent Dividend Period prior to any
dividend or other payment (except dividends in the form of the Ordinary Shares)
upon the Ordinary Shares.
(c) The Guarantor, for so long as any Trust Preferred
Securities or Company Preferred Securities remain outstanding, shall not (i)
issue any liquidation preference participation rights (not being capital stock)
ranking senior to or pari passu with the right to liquidation payments under its
Parity Preferred Shares, (ii) create, incur or permit to exist any debt junior
to its obligations under this Guarantee or (iii) create, incur or permit to
exist any debt that ranks pari passu with this Guarantee unless such debt
contains a provision substantially similar to proviso contained in Section 4.01.
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(d) The Guarantor, for so long as any Trust Preferred
Securities or Company Preferred Securities remain outstanding, shall (i)
maintain, or shall cause any one or more Qualified Subsidiaries (each, a
"Potential Securityholder") to maintain, 100% ownership of the Company Common
Securities. The Guarantor may transfer or permit the transfer of the Company
Common Securities from one Potential Securityholder to another Potential
Securityholder; provided that prior to such transfer it has received an opinion
of a nationally recognized U.S. law firm experienced in such matters to the
effect that (A) the Company will continue to be treated as a partnership for
United States federal income tax purposes and such transfer will not cause the
Company to be classified as an association or publicly traded partnership
taxable as a corporation for United States federal income tax purposes, (B) such
transfer will not cause the Company or the Trust to be required to register
under the Investment Company Act and (C) such transfer will not adversely affect
the limited liability of the Holders of the Company Preferred Securities.
(e) The Guarantor, for so long as any Trust Preferred
Securities or Company Preferred Securities remain outstanding, (i) shall use its
commercially reasonable efforts to ensure that the Company will not be an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes, (ii) shall cause the Company to remain a
limited liability company and not to voluntarily dissolve, wind up, liquidate or
be terminated, except as permitted by the LLC Agreement and (iii) shall use its
commercially reasonable efforts to ensure that the Trust will not be classified
as other than a grantor trust for United States federal income tax purposes.
(f) The Guarantor, for so long as any of the Company Preferred
Securities are outstanding, shall, to the fullest extent permitted by law, not
permit, or take any action to cause, the dissolution, liquidation, termination
or winding up of the Company, unless the Guarantor is itself in liquidation.
(g) If the Company Preferred Securities are distributed to
Holders of Trust Preferred Securities in connection with the involuntary or
voluntary dissolution, winding-up or liquidation of the Trust, the Guarantor
shall use its commercially reasonable efforts to cause the Company Preferred
Securities to be listed on the Luxembourg Stock Exchange or on such other
national securities exchange or similar organization as the Trust Preferred
Securities are then listed or quoted on.
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Section 5.02. Ranking.
(a) The Guarantee will constitute a general and unsecured
obligation of UBS AG and, in liquidation of UBS AG, will rank, both as to
payment and in liquidation:
(i) subordinate and junior to all deposits and other
liabilities of the Guarantor (including those in respect of bonds,
notes and debentures that do not expressly rank pari passu with the
obligations of the Guarantor under this Agreement); and
(ii) senior to the Ordinary Shares and any other
securities of the Guarantor expressed to rank junior to the most senior
preference shares of the Guarantor (if any) from time to time
outstanding.
The foregoing liabilities that rank senior to the Guarantee are collectively
called "UBS AG Senior Liabilities".
(b) Payments under this Guarantee (other than payments upon a
winding-up or dissolution, by bankruptcy or otherwise, in Switzerland of the
Guarantor) are conditional upon the Guarantor not being in default in the
payment of UBS AG Senior Liabilities and being Solvent at the time of payment. A
report as to the insolvency of the Guarantor by two persons, each being a
managing director, director or other authorized officer or agent of the
Guarantor or employees of the independent accountants of the Guarantor will, in
the absence of manifest error be treated and accepted by the Guarantor, the
holders of Company Preferred Securities and all other interested parties as
correct and sufficient evidence thereof.
ARTICLE VI
TERMINATION
Section 6.01. Termination. This Guarantee shall terminate
upon, and be of no further force and effect from the earlier of (i) full payment
of the Redemption Price of all Company Preferred Securities or purchase and
cancellation of all Company Preferred Securities or (ii) upon full payment of
the Liquidation Distribution, plus Additional Amounts thereon, if any, as
payable upon liquidation of the Company. Notwithstanding the foregoing, this
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Company Preferred Securities must restore
payment of any sums paid under the Company Preferred Securities or under this
Guarantee for any reason whatsoever.
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ARTICLE VII
INDEMNIFICATION
Section 7.01. Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, liability, expense, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, liability, expense, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor 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 Guarantor, 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 Dividends to Holders of Company Preferred Securities
might properly be paid.
Section 7.02. Indemnification. The Guarantor agrees to
indemnify each Indemnified Person for, and to hold each Indemnified Person
harmless against, any and all loss, liability, damage, claim or expense
(including taxes other than taxes based on the income of any such Indemnified
Person) incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 7.02 shall
survive the termination of this Guarantee or the earlier resignation or removal
of the Guarantee Trustee.
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ARTICLE VIII
MISCELLANEOUS
Section 8.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Company Preferred Securities then outstanding.
Section 8.02. Amendments. Except for those changes (i)
required under Section 5.01(a) above, which may be made unilaterally by the
Guarantor without the consent of the Holders of the Company Preferred
Securities, or (ii) provided for in the two penultimate sentences of this
paragraph, this Guarantee may be modified by the Guarantor and the Guarantee
Trustee only with the prior approval of the Holders of not less than 662/3% in
liquidation amount of the Company Preferred Securities (excluding any Company
Preferred Securities held by the Guarantor or any of its Affiliates, other than
Company Preferred Securities purchased or acquired by the Guarantor or its
Affiliates in connection with transactions effected by or for the account of
customers of the Guarantor or any of its Affiliates in connection with the
distribution or trading of or market-making in connection with such securities
and except that persons (other than Affiliates of the Guarantor) to whom the
Guarantor or any of its subsidiaries have pledged Company Preferred Securities
may vote or convert with respect to such pledged securities pursuant to the
terms of such pledge). This Guarantee may be amended without the consent of the
Holders of the Company Preferred Securities to (i) cure any ambiguity, (ii)
correct or supplement any provision in this Guarantee that may be defective or
inconsistent with any other provision of this Guarantee, (iii) add to the
covenants, restrictions or obligations of the Guarantor, (iv) conform to any
change in the Investment Company Act, the Trust Indenture Act or the rules or
regulations of either such Act and (v) modify, eliminate and add to any
provision of this Guarantee to such extent as may be necessary or desirable;
provided that no such amendment made in reliance upon clause (v) above shall
have a material adverse effect on the rights, preferences or privileges of the
Holders of the Company Preferred Securities. Except as provided in the preceding
sentence, Sections 4.01, 4.02, 4.07 and the form of Exhibit A may not be amended
without the prior approval of each Holder of the Company Preferred Securities.
Any amendment hereof in accordance with this Section 8.02 shall be binding on
all Holders of Company Preferred Securities.
Section 8.03. Judgment Currency Indemnity.
(a) If, for the purposes of obtaining judgment in any court,
it is necessary to convert an amount due from the Guarantor under any provision
of this Guarantee to a currency other than U.S. dollars, the parties agree, to
the fullest extent that
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they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures Wilmington Trust Company
could purchase such other currency with U.S. dollars at its Wilmington office on
the second Business Day preceding the day on which final judgment is given.
(b) The obligations of the Guarantor in respect of any amount
due to the Guarantee Trustee or any Holders under this Agreement shall,
notwithstanding any judgment in a currency other than U.S. dollars, be
discharged only to the extent that on the Business Day following receipt by the
Guarantee Trustee or such Holders, as the case may be, of any amount adjudged to
be so due in such other currency the Guarantee Trustee or such Holders, as the
case may be, may in accordance with normal banking procedures purchase U.S.
dollars with such other currency.
(c) If the amount of U.S. dollars so purchased is less than
the amount originally due to the Guarantee Trustee or such Holders, as the case
may be, in U.S. dollars, the Guarantor agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify the Guarantee Trustee or such Holders, as the case may
be, against such loss.
(d) If the amount of dollars so purchased exceeds the amount
originally due to the Guarantee Trustee or such Holders, as the case may be, in
U.S. dollars, agree to remit any remaining amount to the Guarantor.
Section 8.04. Assignment of the Guarantor. The Guarantor may
not assign its obligations under the Guarantee, except in the case of a merger
or consolidation where the Guarantor is not the surviving entity, or a sale of
substantially all of its assets, and then only to the entity which is the
survivor of such merger or consolidation or the Purchaser in such sale.
Section 8.05. Notices. All notices provided for in this
Guarantee 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 Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below:
Wilmington Trust Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
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(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the Guarantor
may give notice of to the Holders of the Company Preferred Securities):
UBS AG
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: General Counsel
Telephone No.: ▇▇▇ ▇▇-▇-▇▇▇ 11 11
and
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: General Counsel
Telephone No.: ▇▇▇ ▇▇-▇▇-▇▇▇ 20 20
With copies to:
UBS AG
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(c) If given to any Holder of Company Preferred Securities, at
the address set forth on the books and records of the Company.
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, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
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SECTION 8.06. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 8.07. Jurisdiction. Any claim or proceeding brought by
the Guarantee Trustee on behalf of Holders or a Holder to enforce the
obligations of the Guarantor hereunder shall be brought exclusively in a court
of competent jurisdiction in New York. Any claim or proceeding relating to the
application of Articles 2 and 3, and the definitions of terms as used therein,
including, without limitation, any claims, counter-claims and cross-claims
asserted against the Guarantee Trustee in connection therewith, shall be brought
in a court of competent jurisdiction in the State of New York.
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This GUARANTEE is executed as of the day and year first above
written.
UBS AG,
as Guarantor
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer- Americas and
Regional Chief Operating Officer
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By:
------------------------------
Name:
Title:
95
EXHIBIT A
UBS AG
OFFICERS' CERTIFICATE
[Date]
The undersigned, ▇▇▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer --
Americas and Regional Chief Operating Officer, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Senior
Managing Director and Special Counsel, of UBS AG, a bank organized under the
laws of Switzerland, pursuant to Section 4.02 of the Subordinated Guarantee
Agreement, dated as of - 2001 (the "Guarantee"), executed and delivered by UBS
AG, as guarantor, Wilmington Trust Company, in its capacity as trustee pursuant
to the Trust Agreement, and Wilmington Trust Company, as trustee, for the
benefit of the Holders from time to time of the -% Noncumulative Company
Preferred Securities (the "Company Preferred Securities") of UBS Preferred
Funding Company LLC II, do hereby certify as of the date hereof on behalf of UBS
AG as follows (capitalized terms used herein without definitions have the
meanings assigned to them in the Guarantee):
1. We have read and are familiar with the provisions of the
Guarantee (including, without limitation, Section 4.02 thereof) and all
definitions therein.
2. We have reviewed all corporate documents necessary to state
the facts contained herein and are duly authorized to certify to those
facts.
3. In our opinion, we have made such examination or
investigation as is necessary to enable us to express an informed
opinion as to the facts certified herein.
4. [Neither] [Either] UBS AG [nor] [or] any of its
subsidiaries has redeemed, repurchased or otherwise acquired (other
than (I) in connection with transactions effected by or for the account
of customers of the Guarantor or any of its subsidiaries or in
connection with the distribution, trading or market-making in respect
of such securities, (II) in connection with the satisfaction by the
Guarantor or any of its subsidiaries of its obligations under any
employee benefit plans or similar arrangements with or for the benefit
of employees, officers, directors or consultants, (III) as a result of
a reclassification of the capital stock of the Guarantor or any of its
subsidiaries or the exchange or conversion of one class or series of
such capital stock for another class or series of such capital stock or
(IV) the purchase of fractional interests in shares of the capital
stock of the Guarantor or any of its
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subsidiaries pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged) for any
consideration (and moneys [have] [have not] been paid to or made
available for a sinking fund or for redemption of any such shares) any
Ordinary Shares or any Parity Securities during the twelve month period
immediately preceding and including the date hereof.
5. [Neither] [Either] UBS AG [nor] [or] any of its
subsidiaries has declared or made a dividend or other payment in
respect of the Ordinary Shares that pay dividends annually, if any,
during the twelve month period immediately preceding and including the
date hereof.
6. [Neither] [Either] UBS AG [nor] [or] any of its
subsidiaries has declared or made a dividend or other payment in
respect of the Ordinary Shares that pay dividends semi-annually, if
any, during the six month period immediately preceding and including
the date hereof.
7. [Neither] [Either] UBS AG [nor] [or] any of its
subsidiaries has declared or made a dividend or other payment in
respect of the Ordinary Shares that pay dividends quarterly, if any,
during the three month period immediately preceding and including the
date hereof.
8. (a) [Neither] [Either] UBS AG [nor] [or] any of its
subsidiaries has declared or made a dividend or other payment in
respect of the Parity Securities that pay dividends annually, if any,
during the twelve month period immediately preceding and including the
date hereof.
(b) A dividend or other payment in respect of the Parity
Securities that pay dividends annually, if any, was declared or made
[in full] [at __% of the stated dividend rate for such Parity
Securities].
9. (a) [Neither] [Either] UBS AG [nor] [or] any of its
subsidiaries has declared or made a dividend or other payment in
respect of its Parity Securities that pay dividends semi-annually, if
any, during the six month period immediately preceding and including
the date hereof.
(b) A dividend or other payment in respect of the Parity
Securities that pay dividends semi-annually, if any, was declared or
made [in full] [at __% of the stated dividend rate for such Parity
Securities].
10. (a) [Neither] [Either] UBS AG [nor] [or] any of its
subsidiaries has declared or made a dividend or other payment in
respect of the Parity Securities
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that pay dividends quarterly, if any, during the three month period
immediately preceding and including the date hereof.
(b) A dividend or other payment in respect of the Parity
Securities that pay dividends quarterly, if any, was declared or made
[in full] [at __% of the stated dividend rate for such Parity
Securities.]
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IN WITNESS WHEREOF, the undersigned have duly executed as of
the date first set forth above.
UBS AG
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer- Americas and
Regional Chief Operating Officer
By:
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
99
EXHIBIT A
$-
FORM OF SUBORDINATED NOTE
UBS AG,
acting through its Cayman Islands branch
-% PERPETUAL SUBORDINATED NOTE
UBS AG, a bank organized under the laws of Switzerland (the
"Bank"), acting through its Cayman Islands branch (the "Cayman Islands branch"),
for value received, hereby promises to pay to UBS PREFERRED FUNDING COMPANY LLC
II, a Delaware limited liability company (the "Company"), principal and interest
on the principal amount of this Subordinated Note (this "Subordinated Note"),
under the terms and conditions described hereunder.
Section 1. Definitions. The following terms are used herein
with the meanings assigned to them below:
"Administrative Action" means any judicial decision,
official administrative pronouncement, published or private ruling,
regulatory procedure, notice or announcement (including any notice or
announcement of intent to adopt such procedures or regulations) by any
legislative body, court, governmental authority or regulatory body
having appropriate jurisdiction.
"Bank" means UBS AG, a bank organized under the laws
of Switzerland, acting through its Cayman Islands branch.
A "Bankruptcy Event" shall be deemed to occur if (i)
at any time the Bank's unconsolidated unsubordinated liabilities exceed
its unconsolidated total assets (valued at the higher of their
going-concern and their liquidation value), as calculated based on the
most recent unconsolidated interim balance sheet of the Bank and the
unsubordinated creditors of the Bank do not agree to subordinate their
claims to the extent that such liabilities exceed such assets; or (ii)
the Swiss Federal Banking Commission exercises the broad discretion
granted to it under the Swiss Banking Law before the occurrence of such
an excess as described in (i), above, by withdrawing the banking
license of the affected bank, which has then been required to go into
liquidation pursuant to Article 23 quinquies of the Swiss Banking Law.
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"Business Day" means a day on which (i) the
Trans-European Automated Real-Time Gross Settlement Express Transfer
System ("TARGET") is operating, (ii) banks are open for business and
carrying out transactions in U.S. dollars in London, Luxembourg and
Wilmington, Delaware, U.S.A.
"Calculation Agent" means the London branch of UBS
AG.
"Capital Event" means the determination by the Bank
after consultation with the Swiss Federal Banking Commission that the
Company Preferred Securities cannot be included in calculating the Tier
1 capital of the Bank on a consolidated basis.
"Cayman Islands branch" means the branch of the Bank
located in the Cayman Islands.
"Change in Tax Law" means the receipt by the Bank of
an opinion of a nationally recognized law firm or other tax advisor
(which may be an accounting firm) in Switzerland, the United States or
the Cayman Islands, as appropriate, experienced in such matters to the
effect that an event of the type described in clause (A), (B) or (C) of
the definition of "Tax Event" has occurred or will occur as a result of
(i) any amendment to, clarification of, or change (including any
announced prospective change) in, the laws or treaties (or any
regulations under any laws or treaties) of the United States,
Switzerland or the Cayman Islands or any political subdivision or
taxing authority of or in the United States, Switzerland or the Cayman
Islands affecting taxation or (ii) any Administrative Action or any
amendment to, clarification of, or change in the official position or
Bank interpretation of any Administrative Action or any interpretation
or pronouncement that provides for a position with respect to any
Administrative Action that differs from the previously generally
accepted position, in each case, by any legislative body, court,
governmental authority or regulatory body, regardless of the manner in
which such amendment, clarification, change, interpretation or
pronouncement is made known, which amendment, clarification, change or
Administrative Action is effective or which interpretation or
pronouncement is announced on or after the date of issuance of the
Company Preferred Securities.
"Company" means UBS Preferred Funding Company LLC II,
a Delaware limited liability company.
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"Company Agreement" means the Amended and Restated
Limited Liability Company Agreement of the Company, as amended and
restated as of the Issue Date of the Company Preferred Securities.
"Company Common Securities" means the securities of
the Company representing the common limited liability company interests
in the Company.
"Company Preferred Securities" means the -%
Noncumulative Company Preferred Securities, aggregate liquidation
preference $-, offered by the Company pursuant to a Prospectus dated -,
2001 together with any subsequent offering by the Company of -%
Noncumulative Company Preferred Securities, each representing preferred
limited liability company interests in the Company.
"Dividend Payment Date" means, with respect to
dividends on the Company Preferred Securities, the date on which such
dividends are payable under the Company Agreement.
"Determination Date" for an Interest Period means the
day that is two London Banking Days preceding the first day of that
Interest Period.
"Eligible Investments" means, pursuant to the
Investment Policies, the assets or investments which the Company may
hold and consist of (i) the Subordinated Notes and (ii) other
securities issued by the Bank acting through a branch, agency or other
office located outside of the United States or by a non-U.S. branch of
a non-U.S. subsidiary of the Bank.
"Interest Payment Date" means, with respect to the
Subordinated Notes, each date on which interest is payable, as
specified in Section 3(a).
"Interest Period" has the meaning ascribed thereto in
Section 3.
"Investment Company Act Event" means the receipt by
the Bank of an opinion of a nationally recognized law firm in the
United States experienced in such matters to the effect that there is
more than an insubstantial risk that the Company or the Trust is an
"investment company" within the meaning of the 1940 Act.
"Investment Policies" means the investment policies
of the Company as set forth in Annex F of the Company Agreement.
"Issue Date" means the date of initial issuance of
the Company Preferred Securities and the Trust Preferred Securities.
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"London Banking Day" means a day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.
"1940 Act" means the Investment Company Act of 1940,
as amended.
"Subordinated Note Make Whole Amount" as applied to a
redemption of this Subordinated Note means the greater of (i) 100% of
the principal amount of this Subordinated Note and (ii) as determined
by a Quotation Agent (as defined below), the sum of the present value
of the principal amount of this Subordinated Note together with the
present values of scheduled payments of interest accrued from the date
of redemption to the Dividend Payment Date in ----- 2011 (the
"Remaining Life"), in each case discounted to the date of redemption on
a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate.
For purposes of determining the Subordinated Note Make Whole
Amount:
"Adjusted Treasury Rate" means, with respect
to any redemption date, the Treasury Rate plus .75%.
"Comparable Treasury Issue" means, with
respect to any Redemption Date, the United States Treasury
security selected by the Quotation Agent as having a maturity
comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the Remaining Life. If no
United States Treasury security has a maturity that is within
a period from three months before to three months after the
Interest Payment Date and Dividend Payment Date in October
2010, the two most closely corresponding United States
Treasury securities shall be used as the Comparable Treasury
Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest
month using such securities.
"Comparable Treasury Price" means (A) the
average of five Reference Treasury Dealer Quotations for such
Redemption Date, after excluding the highest and lowest of
such Reference Treasury Dealer Quotations, or (B) if the
Calculation Agent obtains fewer than five such Reference
Treasury Dealer Quotations, the average of all such
Quotations.
"Quotation Agent" means UBS Warburg LLC and
its successors, except that if UBS Warburg LLC shall cease to
be a primary
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U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Corporation will designate another
Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the
Quotation Agent and (ii) any other Primary Treasury Dealer
selected by the Quotation Agent after consultation with the
Company.
"Reference Treasury Dealer Quotations"
means, with respect to each Reference Treasury Dealer and any
Redemption Date, the average, as determined by the Calculation
Agent, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Calculation Agent by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on
the third Business Day preceding such Redemption Date.
"Treasury Rate" means (i) the yield, under
the heading which represents the average for the week
immediately prior to the redemption date, appearing in the
most recently published statistical release designated
"H.15(519)" or any successor publication which is published
weekly by the Federal Reserve and which establishes yields on
actively traded United States Treasury securities adjusted to
constant maturity under the caption "Treasury Constant
Maturities," for the maturity corresponding to the Remaining
Life (or if no maturity is within three months before or after
the Remaining Life, yields for the two published maturities
most closely corresponding to the Remaining Life will be
determined and the Treasury Rate will be interpolated or
extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any
successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate
per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a
price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date. The Treasury Rate
will be calculated on the third Business Day preceding the
Redemption Date.
"Subordinated Notes" means the 8.622% Perpetual
Subordinated Notes issued by the Cayman Islands branch under the
Subordinated Notes Purchase Agreement, including this Subordinated
Note.
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"Subordinated Notes Purchase Agreement" means the
Subordinated Notes Purchase Agreement, dated , 2001, between
the Bank, acting through the Cayman Islands branch, and the Company.
"Swiss Federal Banking Commission" means the Swiss
Federal Banking Commission and, if any successor governmental authority
succeeds to the bank regulatory functions of the Swiss Federal Banking
Commission in Switzerland, such successor governmental authority;
provided, however, that if the Bank becomes domiciled in a jurisdiction
other than Switzerland, then each reference herein to the Swiss Federal
Banking Commission shall be deemed to instead refer to the governmental
authority having primary regulatory authority with respect to the
Bank's capital adequacy in such other jurisdiction.
"Tax Event" means the receipt by the Bank of an
opinion of a nationally recognized law firm or other tax advisor (which
may be an accounting firm) in Switzerland or the United States, as
appropriate, experienced in such matters to the effect that there is
more than an insubstantial risk that (A) the Company or the Trust is or
will be subject to more than a de minimis amount of additional taxes,
duties or other governmental charges, (B) the Bank is or will be
required to pay any additional amounts in respect of any taxes, duties
or other governmental charges with respect to payments of interest or
principal on the Subordinated Notes and with respect to any payments on
the Trust Preferred Securities, (C) the Company is or will be required
to pay any additional amounts in respect of any taxes, duties or other
governmental charges with respect to payments of dividends on the
Company Preferred Securities or the Trust is or will be required to pay
any additional amounts in respect of any taxes, duties or other
governmental charges with respect to distributions on the Trust
Preferred Securities, or (D) the treatment of any of the Company's
items of income, gain, loss, deduction or expense, or the treatment of
any item of income, gain, loss, deduction or expense of the Bank
related to the Subordinated Notes or its ownership of the Company, in
each case as reflected on the tax returns (including estimated returns)
filed (or to be filed) by the Company or the Bank, will not be
respected by a taxing authority, as a result of which the Company or
the Bank is or will be subject to more than a de minimis amount of
additional taxes, duties or other governmental charges or civil
liabilities, the effect of which cannot be avoided by the Company or
the Bank taking reasonable measures available to it without any adverse
effect on or material cost to the Bank or the Company (as determined by
the Bank in its sole discretion).
"Telerate Page 3750" means the display designated as
"Page 3750" on the Bridge/Telerate Service (or such other page as may
replace Page 3750) or such other service or services as may be
nominated by the British
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Bankers' Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits.
"Trust" means UBS Preferred Funding Trust II, a
Delaware statutory business trust.
"Trust Preferred Securities" means the -%
Noncumulative Trust Preferred Securities, aggregate liquidation amount
$-, offered by the Trust together with any subsequent offering by the
Trust of -% Noncumulative Trust Preferred Securities, in each case
representing an equal number of Company Preferred Securities.
"UBS AG Senior Liabilities" has the meaning set forth
in Section 6(a).
"U.S. dollars," "dollars," "U.S.$" and "$" mean the
currency of the United States of America.
Section 2. Form of Subordinated Notes. This Subordinated Note
is one of a duly authorized issue of the Subordinated Notes of the Bank in the
aggregate principal amount of $- designated as its -% Perpetual Subordinated
Notes and purchased pursuant to the Subordinated Notes Purchase Agreement. The
Subordinated Notes are represented by a single definitive note in registered
form.
Section 3. Payments of Interest.
(a) Interest on the Subordinated Notes is payable from the
date of initial issuance as follows (or, if any such day is not a Business Day,
the next Business Day, but without any additional interest or other payment in
respect of such delay) (each an "Interest Payment Date" and the period from and
including an Interest Payment Date, or the date of initial issuance, as
applicable, to but not including the next Interest Payment Date, an "Interest
Period"):
(i) for each Interest Period through the Interest
Period ending on the Interest Payment Date in - 2011, semi-annually in
arrears on April 1 and October 1 of each year at a fixed rate per annum
on the principal amount of this Subordinated Note equal to -%
(calculated on the basis of a 360-day year consisting of twelve 30-day
months); and
(ii) for each Interest Period ending after
2011, quarterly in arrears on the first business day on or after
, , and of each year at a floating
rate per annum on the principal amount of
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this Subordinated Note equal to 3.07% above three-month LIBOR
(calculated on the basis of the actual number of days elapsed in a
360-day year).
LIBOR, with respect to a Determination Date, means the rate
(expressed as a percentage per annum) for deposits in U.S. dollars for a
three-month period commencing on the second London Banking Day immediately
following that Determination Date that appears on Telerate Page 3750 as of 11:00
a.m. (London time) on that Determination Date. If such rate does not appear on
Telerate Page 3750, LIBOR will be determined on the basis of the rates which
deposits in U.S. dollars for a three-month period commencing on the second
London Banking Day immediately following that Determination Date and in a
principal amount of not less than $1,000,000 that is representative for a single
transaction in such market at such time, are offered to prime banks in the
London interbank market by four major banks in the London interbank market
selected by the Calculation Agent, after consultation with the Company, at
approximately 11:00 a.m., London time, on that Determination Date.
The Calculation Agent will request the principal London office
of each of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR with respect to that Determination will be the
arithmetic mean of such quotations. If fewer than two quotations are provided,
LIBOR in respect of that Determination Date will be the arithmetic mean of the
rates quoted by three major money center banks in New York City selected by the
Calculation Agent, after consultation with the Company, at approximately 11:00
a.m., New York City time, on that Determination Date for loans in U.S. dollars
to leading European banks for a three-month period commencing on the second
London Banking Day immediately following that Determination Date and in a
principal amount of not less than $1,000,000. However, if the banks selected by
the Calculation Agent to provide quotations are not quoting as mentioned in this
paragraph, LIBOR for the applicable period will be the same as LIBOR as
determined on the previous Determination Date.
All percentages resulting from any calculations on this
Subordinated Note will be rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point, with five one-millionths of a
percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded to
9.87655% (or .0987655)), and all dollar amounts used in or resulting from such
calculation will be rounded to the nearest cent (with one-half cent being
rounded upward).
(b) Interest due on an Interest Payment Date is deferrable at
the option of the Cayman Islands branch to the extent that, pursuant to the
Company Agreement, dividends on the Company Preferred Securities due on the
corresponding Dividend Payment Date would constitute Nondefinitive Dividends (as
defined in the Company Agreement). Interest deferred in this manner will not
itself bear interest.
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Section 4. Redemption. The Subordinated Notes are redeemable
with the consent of the Swiss Federal Banking Commission and at the option of
the Cayman Islands branch:
(a) on the Interest Payment Date in - 2011 or any
Interest Payment Date occurring after that date, in whole or in part,
at a redemption price equal to 100% of their principal amount plus
interest accrued but unpaid to the date fixed for redemption; and
(b) prior to the Interest Payment Date in - 2011, in
whole but not in part, if a Tax Event resulting from a Change in Tax
Law (and relating to an event described in clauses (A), (B) or (C) of
the definition of "Tax Event") occurs at a redemption price equal to
100% of their principal amount plus interest accrued but unpaid to the
date fixed for redemption, or
(c) prior to the Interest Payment Date in - 2011, in
whole but not in part, if a Tax Event not resulting from a Change in
Tax Law relating to an event described in clauses (A), (B) or (C) of
the definition of "Tax Event", an Investment Company Act Event or a
Capital Event occurs at a redemption equal to interest accrued but
unpaid to the date fixed for redemption plus the Subordinated Note Make
Whole Amount.
Section 5. Additional Amounts. If the Cayman Islands branch is
required to withhold any taxes, duties or other governmental changes with
respect to any payment in respect of this Subordinated Note, the Cayman Islands
branch will pay such additional amounts as shall be required so that the amount
received by the Company under this Subordinated Note is not less than the amount
that would have been received in the absence of any such additional taxes,
duties or other governmental charges.
Section 6. Subordination.
(a) This Subordinated Note constitutes a general and unsecured
obligation of the Bank and, in liquidation of the Bank, will rank, both as to
payment and in liquidation:
(i) subordinate and junior to all deposits and other
liabilities of the Bank (including those in respect of bonds, notes and
debentures that do not expressly rank pari passu with the obligations
of the Bank under the Subordinated Notes; and
(ii) senior to the ordinary shares and any other
securities of the Bank expressed to rank junior to the most senior
preference shares of the Bank (if any) from time to time outstanding.
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The foregoing liabilities that rank senior to this Subordinated Note are
collectively called "UBS AG Senior Liabilities".
(b) Payments under the Subordinated Notes (other than payments
upon a winding-up or dissolution, by bankruptcy or otherwise, in Switzerland of
the Bank) are conditional upon the Bank (i) not being in default in the payment
of UBS AG Senior Liabilities, (ii) being able to pay its debts as they fall due
and (iii) having consolidated gross assets in excess of consolidated gross
liabilities (other than liabilities to persons who are not senior creditors) at
the time of payment. A report as to the insolvency of the Bank by two persons,
each being a managing director, director or other authorized officer or agent of
the Bank or employees of the independent accountants of the Bank will, in the
absence of manifest error be treated and accepted by the Bank, the holders of
Company Preferred Securities and all other interested parties as correct and
sufficient evidence thereof.
Section 7. Failure of Payment. If the Bank fails to make a
payment when due of an installment of interest on this Subordinated Note, the
Company shall be entitled to seek to enforce payment only of the defaulted
installment of interest but not in respect of any failure to pay interest due
under this Subordinated Note that was deferred because the dividends on the
Company Preferred Securities on the corresponding Dividend Payment Date would
have constituted Nondefinitive Dividends (as defined in the Company Agreement).
The Company may, in its discretion, proceed to protect and enforce its rights by
such appropriate judicial proceedings as the Company shall deem most effectual
to protect and enforce any such rights, whether for the specific performance of
any covenant or agreement in the Subordinated Notes Purchase Agreement or in aid
of the exercise of any power granted therein, or to enforce any other proper
remedy. Except with respect to a failure of payment of principal, the principal
amount of this Subordinated Note shall not be subject to acceleration or become
due and payable, whether upon notice or otherwise, upon the failure of the Bank
to make a payment when due of an installment of interest or a winding-up of the
Bank.
If a Bankruptcy Event or a Capital Event occurs, then this
Subordinated Note shall be canceled and the Bank's obligations hereunder
(including, without limitation, its obligations to pay principal and interest,
including interest not paid on any Interest Payment date as specified in Section
3(b) shall be forgiven.
If the Bank is liquidated and upon commencement of the related
liquidation proceedings the Subordinated Notes are still outstanding, then the
Subordinated Notes or other Eligible Investments shall be distributed by the
Company to the Bank, as holder of the Company Common Securities.
Section 8. Forgiveness of Debt. If a Bankruptcy Event or a
Capital Event occurs, then this Subordinated Note or successor Eligible
Investments then held by the
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Company shall be canceled and the Bank's obligations thereunder (including,
without limitation, its obligations to pay principal and interest, including any
interest deferred in accordance with Section 3(b)) shall be forgiven.
Section 9. Transfer of the Subordinated Note. This
Subordinated Note may not be sold and may not be divided into denominations of
less than $1,000.
Section 10. GOVERNING LAW. THIS SUBORDINATED NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
UNITED STATES OF AMERICA.
Section 11. Submission to Jurisdiction. The Bank irrevocably
consents and agrees, that any legal action, suit or proceeding against it with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement may be brought in the courts of the State of New
York or the courts of the United States of America located in New York City and
until amounts due and to become due under this Subordinated Note have been paid,
hereby irrevocably consents and submits to the non-exclusive jurisdiction of
each such court in personam, generally and unconditionally with respect to any
such action, suit or proceeding for itself and in respect of its properties,
assets and revenues. Service of process upon the branch in any such action, suit
or proceeding shall be deemed in every respect service of process upon the Bank.
The Bank hereby irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid action, suits or proceedings brought in the
United States Federal courts located in New York City or the courts of the State
of New York and hereby further irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. The
provisions of this Section 11 shall survive any termination of this Subordinated
Note, in whole or in part.
Section 12. Modification and Amendment. This Subordinated Note
may be modified or amended only by the written agreement of the Cayman Islands
branch and the Company.
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IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
Dated: -, 2001
UBS AG,
acting through its Cayman Islands branch
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer- Americas and
Regional Chief Operating Officer
By:
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
111
Annex B
to the Amended and Restated
Limited Liability Company Agreement
[Form of Administration Agreement]
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ADMINISTRATION AGREEMENT
BETWEEN
UBS PREFERRED FUNDING COMPANY LLC II
AND
UBS AG,
ACTING THROUGH ITS STAMFORD BRANCH
DATED AS OF -, 2001
113
TABLE OF CONTENTS
Page
----
Section 1. Administrative Services...................................... 2
Section 2. Compensation; Indemnities.................................... 3
Section 3. Term......................................................... 4
Section 4. Obligation to Supply Information............................. 4
Section 5. The Administrator's Liability and Standard of Care........... 4
Section 6. Reliance on Information Obtained from Third Parties.......... 5
Section 7. Notices...................................................... 5
Section 8. Amendment.................................................... 6
Section 9. No Joint Venture............................................. 6
Section 10. Assignment................................................... 6
Section 11. Governing Law................................................ 6
Section 12. Submission to Jurisdiction................................... 6
Section 13. Execution in Counterparts.................................... 7
Section 14. Section Headings............................................. 7
Section 15. Entire Agreement............................................. 7
114
ADMINISTRATION AGREEMENT (this "Agreement"), dated as of -,
2001, between UBS Preferred Funding Company LLC II, a Delaware limited liability
company (the "Company") and UBS AG, a bank organized under the laws of
Switzerland (the "Bank"), acting through its Stamford branch, as administrator
(the "Administrator").
WITNESSETH
WHEREAS, the Company proposes to engage in the following
activities (among others):
(a) to purchase newly issued undated subordinated
notes (the "Subordinated Notes"), issued by the Bank through its Cayman
Islands branch office, in an aggregate principal amount of $-;
(b) to issue (i) 2,000 common limited liability
company interests in the Company (the "Company Common Securities"),
representing all of the common limited liability company interests in
the Company, to the Bank, acting through its Cayman Islands branch, at
an aggregate purchase price of $2,000; and (ii) -% Noncumulative
Company Preferred Securities with an aggregate liquidation preference
of - (the "Company Preferred Securities"), representing preferred
limited liability company interests in the Company to UBS Preferred
Funding Trust II, a Delaware statutory business trust (the "Trust"),
the proceeds of which will be used to purchase the Subordinated Notes
and pay certain expenses relating to the foregoing offering;
(c) to enter into any agreements in connection with
the foregoing (together with the Amended and Restated Limited Liability
Company Agreement of the Company (the "Company Agreement"), the
"Transaction Documents");
(d) to enter into any agreement providing for the
management and administration of the activities of the Company; and
(e) to engage in such activities and to exercise such
powers permitted to limited liability companies under the laws of the
State of Delaware that are incidental to or connected with the
foregoing business or purposes or necessary to accomplish the foregoing
or any other lawful purpose which is, in each case, not inconsistent
with the Company Agreement as amended from time to time; and
WHEREAS, the Company has requested that the Administrator
provide assistance to the Company and perform various services for the Company,
and the
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Administrator is willing to furnish such services on the terms and conditions
herein set forth. In connection herewith, the Administrator has also requested
certain indemnities from the Company.
NOW, THEREFORE, in mutual consideration of these premises, the
parties hereto agree as follows:
Section 1. Administrative Services. The Administrator hereby
agrees to provide corporate management and administrative services to the
Company and the Company hereby authorizes the Administrator to provide such
services, including:
(a) taking such actions, as Administrator on behalf
of the Company (including through directors or officers of the Company
or through employees of the Administrator who are authorized by the
Company), as are necessary or desirable for the Company to remain
organized and qualified in all appropriate jurisdictions and to carry
out its business in such manner as the directors of the Company
determine and as the Company shall from time to time reasonably request
in order to effect transactions of the type described in the
Preliminary Statement to this Agreement;
(b) providing, or causing to be provided, clerical,
bookkeeping and other services necessary and appropriate for the
Company, including, without limitation, the following services:
(i) providing such banking and investment
services as may be agreed upon from time to time;
(ii) providing from its employees
signatories to the Company's bank and investment accounts;
(iii) maintaining any books and records that
are required in the ordinary course of the business of the
Company (the "Business"), are agreed between the parties and
are required in order to comply with any laws or regulations
of the State of Delaware and in such form and manner as may be
agreed upon from time to time;
(iv) preparing such periodic reports and
accounting information as may be requested from time to time
by the board of directors;
(v) dealing with correspondence relating to
the Business;
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(vi) providing a Company Secretary;
(vii) providing non-exclusive telephone,
telecopy, telex, post office box and duplicating facilities
and within its premises and such other non-exclusive space and
ancillary services as may be necessary for the other purposes
of the Business including facilities for meetings of the
directors of the Company from time to time;
(viii) complying with the terms of the
Company Agreement all agreements to which the Company is a
party and, without prejudice to the foregoing, not entering
into, on behalf of the Company, any commitments, loans or
obligations nor charging, mortgaging, pledging, encumbering or
otherwise restricting or disposing of the Company's property
or assets and generally not taking any action inconsistent
with the Business; and
(ix) keeping confidential all documents,
materials and other information relating to the Business and
not disclosing any of the aforesaid without the prior consent
of the Company unless it shall in good faith determine that
such disclosure is necessary to protect the interests of the
Administrator; and
(c) undertaking such other administrative services as
may be reasonably requested by the Company, including providing notices
to third parties on behalf of the Company and providing such other
services as are necessary or desirable for the Company to carry out its
duties and obligations under the Transaction Documents.
Any of the above services may, if the Administrator or the
Company deems it necessary or desirable, be subcontracted by the Administrator;
provided that prior written consent is obtained from the Company of such
subcontract and, provided further that notwithstanding such subcontract, the
Administrator shall remain responsible for performance of the services set forth
above.
Section 2. Compensation; Indemnities.
(a) The Company agrees to pay to the Administrator, in
consideration for the Administrator's services described in paragraphs (a)-(c)
of Section 1, an annual fee as determined periodically by the Company and the
Administrator, which fee in no event shall exceed the value of the services
provided by the Administrator to the Company on an arm-length basis.
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(b) The Company shall pay and shall indemnify and hold
harmless the Administrator and the Administrator's directors, officers,
employees and agents (each of the foregoing an "Administrator Indemnified
Person") from and against any and all losses, liabilities (including liabilities
for penalties), actions, suits, judgments, demands, damages, costs and expenses
(including, without limitation, under any securities laws, rules or regulations)
arising from or relating to the transactions contemplated hereby (all of the
foregoing being collectively referred to as "Indemnified Amounts"), provided,
however, that the Company shall have no obligation to indemnify any
Administrator Indemnified Person hereunder in respect of Indemnified Amounts to
the extent any such losses, liabilities, actions, suits, judgments, demands,
damages, costs and expenses resulted from the negligence or willful misconduct
of such Administrator Indemnified Person.
(c) The Administrator shall pay and shall protect, indemnify
and hold harmless the Company and its directors, officers, employees and agents
and all Persons affiliated with the Company (each of the foregoing a "Company
Indemnified Person") from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, damages, costs
and expenses (including, without limitation, reasonable fees and expenses of
counsel) of any nature (including, without limitation, under any securities
laws, rules or regulations) arising from or relating to the Administrator's
negligence or willful misconduct or that of its directors, officers, employees
and agents in connection with the exercise of the Administrator's rights and/or
the performance of the Administrator's duties hereunder.
(d) This Section 2 shall survive the termination of this
Agreement.
Section 3. Term. The Company may terminate this Agreement upon
at least 90 days' written notice to the Administrator.
Section 4. Obligation to Supply Information. The Company shall
forward to the Administrator such information in connection with the Transaction
Documents as the Administrator may from time to time reasonably request in
connection with the performance of its obligations hereunder.
Section 5. The Administrator's Liability and Standard of Care.
The Administrator assumes no liability for anything other than the services
rendered by it pursuant to Section 1. Without limiting the generality of the
foregoing, it is agreed that the Administrator assumes no liability with respect
to any of the Company's obligations under the Transaction Documents.
The Administrator shall perform its duties hereunder
diligently and with the same standard of care exercised by a prudent person in
connection with the performance of the same or similar duties and, in no event
with less care than the
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Administrator exercises or would exercise in connection with the same or similar
obligations if those obligations were the direct obligations of the
Administrator.
Section 6. Reliance on Information Obtained from Third
Parties. The Company recognizes that the accuracy and completeness of the
records maintained and the information supplied by the Administrator hereunder
is dependent upon the accuracy and completeness of the information obtained by
the Administrator from the parties to the Transaction Documents and other
sources and the Administrator shall not be responsible for any inaccuracy in the
information so obtained or for any inaccuracy in the records maintained by the
Administrator hereunder that may result therefrom.
Section 7. Notices. All notices and other communications to be
given shall be in writing (including by facsimile transmission) and delivered to
the relevant address or number specified below (or such other address or number
as may be notified in accordance with this Section 7) and shall take effect at
the time of receipt.
The Company:
UBS Preferred Funding Company LLC II
c/o UBS AG
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With copies to:
UBS AG
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
The Administrator:
UBS AG (Stamford)
UBS AG
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With copies to:
UBS AG
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Section 8. Amendment. No waiver, alteration, modification,
amendment or supplement of the terms of this Agreement shall be effective unless
accomplished by written instrument signed by all parties hereto.
Section 9. No Joint Venture. Nothing contained in this
Agreement shall constitute the Administrator and the Company as members of any
partnership, joint venture, association, syndicate or unincorporated business.
Section 10. Assignment. This Agreement may not be assigned by
any party without the prior written consent of the other parties, provided that
the parties hereby agree that if the Bank sells, assigns or otherwise transfers
the Company Common Securities to a wholly owned subsidiary of the Bank, the
Bank's rights (and obligations) under this Agreement (including those of the
Administrator) may be assigned to such subsidiary. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 11. GOVERNING LAW. THIS ADMINISTRATION AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA.
Section 12. Submission to Jurisdiction. The Bank irrevocably
consents and agrees, that any legal action, suit or proceeding against it with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement may be brought in the courts of the State of New
York or the courts of the United States of America located in The City of New
York and until amounts due and to become due under this Agreement have been
paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction
of each such court in personam, generally and unconditionally with respect to
any such action, suit or proceeding for itself and in respect of its properties,
assets and revenues. Service of process upon the branch in any such action, suit
or proceeding shall be deemed in every respect service of process upon the
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Bank. The Bank hereby irrevocably and unconditionally waives, to the fullest
extent permitted by law, except as otherwise provided for in this Agreement, any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions, suit or proceedings brought in the United States Federal
courts located in The City of New York or the courts of the State of New York
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum. The provisions of this
Section 12 shall survive any termination of this Agreement, in whole or in part.
Section 13. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute one and the same Agreement.
Section 14. Section Headings. Section headings used in this
Agreement are for convenience only and shall not affect the construction of this
Agreement.
Section 15. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters covered
hereby and supersedes all prior agreements and understandings with respect to
such matters between the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
UBS AG,
acting through its Stamford branch
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer- Americas and
Regional Chief Operating Officer
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Managing Director and General
Counsel
UBS PREFERRED FUNDING COMPANY LLC II
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and Managing Director
122
Annex C
to the Amended and Restated
Limited Liability Company Agreement
BY-LAWS
OF
UBS PREFERRED FUNDING COMPANY LLC II
These By-laws have been established as the By-laws of UBS
Preferred Funding Company LLC II, a Delaware limited liability company (the
"Company") pursuant to the Amended and Restated Limited Liability Company
Agreement, dated as of - 2001 (as from time to time amended, modified or
supplemented, the "Agreement"), pursuant to which the Company's existence has
been continued, and, together with the Agreement and Annexes, C, E, F, G, H and
I thereto, are deemed to be the limited liability company agreement of the
Company for purposes of the Delaware Act. In the event of any inconsistency
between the Agreement and these By-laws, the provisions of the Agreement shall
control.
Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Agreement.
ARTICLE I
SECURITYHOLDERS
Section 1.1. Annual Meetings. An annual meeting of
Securityholders may be held at such date, time and place either within or
without the State of Delaware if and as may be decided and designated by the
Board of Directors from time to time; provided, however the Company shall not be
required to have an annual meeting of Securityholders. Any other proper business
may be transacted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of
Securityholders may be called at any time by the Chairman of the Board, if any,
the President or the Board of Directors, to be held at such date, time and place
either within or without the State of Delaware as may be stated in the notice of
the meeting. A special meeting of Securityholders shall be called by the
Secretary upon the written request, stating the purpose of the meeting, of
Securityholders who together own of record a majority of the Securities entitled
to vote at such meeting.
Section 1.3. Notice of Meetings. Whenever Securityholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the written
notice of any meeting shall be given not less than ten nor more than sixty days
before the date of the meeting to each Securityholder entitled to vote at such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the United States mail, postage prepaid, directed to the Securityholder at such
Securityholder's address as it appears on the records of the Company.
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Section 1.4. Adjournments. Any meeting of Securityholders,
annual or special, may be adjourned from time to time, to reconvene at the same
or some other place, and notice need not be given of any such adjourned meeting
if the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the Company may transact any
business which might have been transacted at the original meeting. If the
adjournment is for more than thirty days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each Securityholder of record entitled to vote at the
meeting.
Section 1.5. Quorum. At each meeting of Securityholders,
except where otherwise provided by law or the Agreement or these By-laws, the
holders of at least 50% of the Securities entitled to vote on a matter at the
meeting, present in person or represented by proxy, shall constitute a quorum.
In the absence of a quorum of the holders of Securities entitled to vote on a
matter, the holders of a majority of the Securities present or represented may
adjourn such meeting from time to time in the manner provided by Section 1.4 of
these By-laws until a quorum shall be so present or represented. Securities
other than Common Securities belonging on the record date for the meeting to the
Company or an Affiliate of the Company shall neither be entitled to vote nor be
counted for quorum purposes.
Section 1.6. Organization. Meetings of Securityholders shall
be presided over by the Chairman of the Board, if any, or in the absence of the
Chairman of the Board by the President, or in the absence of the President by a
Vice President, or in the absence of the foregoing persons, by a chairman
designated by the Board of Directors, or in the absence of such designation, by
a chairman chosen at the meeting. The Secretary, or in the absence of the
Secretary, an Assistant Secretary, shall act as secretary of the meeting, but in
the absence of the Secretary and any Assistant Secretary, the chairman of the
meeting may appoint any person to act as secretary of the meeting.
Section 1.7. Voting; Proxies. Unless otherwise provided in the
Agreement, each Securityholder entitled to vote at any meeting of
Securityholders shall have voting power proportionate to the outstanding amount,
based on initial issue price, of the Securities held by such Securityholder that
have voting power upon the matter in question. Each Securityholder entitled to
vote at a meeting of Securityholders or to express consent or dissent to action
in writing without a meeting may authorize another person or persons to act for
such Securityholder by proxy, but no such proxy shall be voted or acted upon
after three years from its date, unless the proxy provides for a longer period.
A duly executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power, regardless of whether the interest with which it
is coupled is an interest in the Securities themselves or an interest in the
Company generally. A Securityholder may revoke any proxy which is not
irrevocable by attending the meeting and voting in person or by filing an
instrument in writing revoking the proxy or another duly executed proxy bearing
a later date with the Secretary of the Company. Voting at meetings of
Securityholders need not be by written ballot unless the holders of a majority
of the outstanding Securities entitled to vote thereon present in person or
represented by proxy at such meeting shall so determine. Directors shall be
designated, removed and replaced
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as provided in the Agreement and Article II hereof. Other than in the case of
any matter expressly set forth in the Agreement for which a higher vote may be
required, the affirmative vote of the holders of a majority of the Securities
present in person or represented by proxy at the meeting and entitled to vote on
the subject matter shall be the act of the Securityholders.
Section 1.8. Fixing Date for Determination of Securityholders
of Record. In order that the Company may determine the Securityholders entitled
to notice of or to vote at any meeting of Securityholders or any adjournment
thereof, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board of Directors, and which record date shall not be more than sixty
nor less than ten days before the date of such meeting. If no record date is
fixed by the Board of Directors, the record date for determining Securityholders
entitled to notice of or to vote at a meeting of Securityholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held. A determination of Securityholders of record
entitled to notice of or to vote at a meeting of Securityholders shall apply to
any adjournment of the meeting; provided, however, that the Board of Directors
may fix a new record date for the adjourned meeting.
In order that the Company may determine the Securityholders
entitled to consent to action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors, the
record date for determining Securityholders entitled to consent to action in
writing without a meeting, when no prior action by the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Company by delivery to (a) its registered office in the State of Delaware, (b)
its principal place of business, or (c) an Officer or agent of the Company
having custody of the book in which proceedings of meetings of Securityholders
are recorded. Delivery made to the Company's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining Securityholders
entitled to consent to action in writing without a meeting shall be at the close
of business on the day on which the Board of Directors adopts the resolution
taking such prior action.
In order that the Company may determine the Securityholders
entitled to receive payment of any distribution or allotment of any rights or
the Securityholders entitled to exercise any rights in respect of any exchange
of Securities, or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted, and which record
date shall be not more than sixty days prior to such action. If no record date
is fixed, the record date for determining Securityholders for any such purpose
shall be at the close of business on the day on which the Board of Directors
adopts the resolution relating thereto.
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Section 1.9. List of Securityholders Entitled to Vote. The
Secretary shall prepare and make, at least ten days before every meeting of
Securityholders, a complete list of the Securityholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
Securityholder and the amount of Securities registered in the name of each
Securityholder. Such list shall be open to the examination of any
Securityholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof and may be inspected by any
Securityholder who is present.
Section 1.10. Consent of Securityholders in Lieu of Meeting.
Unless otherwise provided in the Agreement or by law, any action required by law
to be taken at any annual or special meeting of Securityholders of the Company,
or any action which may be taken at any annual or special meeting of such
Securityholders, may be taken without a meeting, without prior notice and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holders of outstanding Securities having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all Securities entitled to vote thereon were
present and voted and shall be delivered to the Company by delivery to (a) its
registered office in the State of Delaware by hand or by certified mail or
registered mail, return receipt requested, (b) its principal place of business,
or (c) an Officer or agent of the Company having custody of the book in which
proceedings of meetings of Securityholders are recorded. Every written consent
shall bear the date of signature of each Securityholder who signs the consent
and no written consent shall be effective to take the action referred to therein
unless, within sixty days of the earliest dated consent delivered in the manner
required by this By-Law to the Company, written consents signed by holders
representing a sufficient amount of Securities to take action are delivered to
the Company by delivery to (a) its registered office in the State of Delaware by
hand or by certified or registered mail, return receipt requested, (b) its
principal place of business, or (c) an Officer or agent of the Company having
custody of the book in which proceedings of meetings of Securityholders are
recorded. Prompt notice of the taking of the action without a meeting by less
than unanimous written consent shall be given to those Securityholders who have
not consented in writing.
ARTICLE II
BOARD OF DIRECTORS
2.1. Number; Powers; By-laws. The business and affairs of the
Company shall be managed by or under the direction of a Board composed of not
less than three nor more than five Directors. The Board shall manage the
business and affairs of the Company and may exercise all powers in connection
therewith, except for such powers as are required to be exercised by
Securityholders, all in accordance with the Agreement, these By-laws and
applicable law. Except to the extent that the Board or the Securityholders
confer such authority on a Director, no Director shall have the authority to
bind the Company.
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2.2. Voting Power. Each Director shall, in the consideration
of any matter by the Board, have a single vote at the time such vote is taken or
made (whether at a meeting or by written consent). Except where a greater
percentage approval may be provided for herein or in the Agreement or by law, an
action shall be deemed approved by the Board only if it has been approved by a
majority of the Directors.
2.3. Quorum. At all meetings of the Board, the presence of at
least a majority of Directors shall constitute a quorum for the transaction of
business. In case at any meeting of the Board a quorum shall not be present, any
Director present may adjourn the meeting from time to time until a quorum shall
be present.
2.4. Designation; Removal; Replacement. The term of office of
a Director shall be until the earliest of the following events: (i) his or her
successor is designated or (ii) he or she resigns or is removed. Any Director
may be removed, with or without cause by majority vote of the remaining
Directors. In the event of the resignation, removal or death of a Director, such
Director shall be replaced by another person designated by majority vote of the
remaining Directors. Any Director may resign at any time upon written notice to
the Board of Directors or to the President or the Secretary of the Company. Such
resignation shall take effect at the time specified therein, and unless
otherwise specified therein no acceptance of such resignation shall be necessary
to make it effective.
Section 2.5. Regular Meetings. Regular meetings of the Board
of Directors may be held at such places within or without the State of Delaware
and at such times as the Board may from time to time determine, and if so
determined notice thereof need not be given.
Section 2.6. Special Meetings. Special meetings of the Board
of Directors may be held at any time or place within or without the State of
Delaware whenever called by the Chairman of the Board, by the President or by
any two Directors. Reasonable notice thereof shall be given by the person or
persons calling the meeting.
Section 2.7. Participation in Meetings by Conference Telephone
Permitted. Unless otherwise restricted by the Agreement or these By-laws, the
Board of Directors, or any committee designated by the Board, may participate in
a meeting of the Board or of such committee, as the case may be, by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this By-Law shall constitute presence in person at such
meeting.
Section 2.8. Organization. Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, or in the absence of the
Chairman of the Board by the President, or in their absence, by a chairman
chosen at the meeting. The Secretary, or in the absence of the Secretary, an
Assistant Secretary, shall act as secretary of the meeting, but in the absence
of the Secretary and any Assistant Secretary, the chairman of the meeting may
appoint any person to act as secretary of the meeting.
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Section 2.9. Action by Directors Without a Meeting. Unless
otherwise restricted by the Agreement or these By-laws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all of the Board or of such
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
ARTICLE III
COMMITTEES
Section 3.1. Committees. The Board of Directors may, by
resolution of the Board adopted by majority vote, designate one or more
committees, each committee to consist of one or more of the Directors of the
Company. Any such committee, to the extent provided in the resolution of the
Board of Directors or in these By-laws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Company, and may authorize the seal of the Company to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Certificate of Formation,
adopting an agreement of merger, consolidation or conversion, recommending to
the Securityholders the sale, lease or exchange of all or substantially all of
the Company's property and assets, recommending to the Securityholders a
dissolution of the Company or a revocation of a dissolution, amending these
By-laws and, unless the resolution, these By-laws or the Agreement expressly so
provides, no such committee shall have the power or authority to authorize the
issuance of Securities, to adopt a certificate of ownership and merger,
consolidation or conversion or to remove or indemnify Officers or Directors.
Section 3.2. Committee Rules. Unless the Board of Directors
otherwise provides, each committee designated by the Board may adopt, amend and
repeal rules for the conduct of its business. In the absence of a provision by
the Board or a provision in the rules of such committee to the contrary, a
majority of the members of such committee shall constitute a quorum for the
transaction of business, the vote of a majority of the members present at a
meeting at the time of such vote if a quorum is then present shall be the act of
such committee, and in other respects each committee shall conduct its business
in the same manner as the Board conducts its business pursuant to Article II of
these By-laws.
ARTICLE IV
OFFICERS
Section 4.1. Officers; Election. As soon as practicable after
the annual meeting of Securityholders in each year, the Board of Directors shall
elect a President and a Secretary, and may also elect one or more Vice
Presidents, one or more Assistant Vice Presidents, one or more Assistant
Secretaries, a Treasurer and one or more Assistant Treasurers and such other
Officers as the Board may deem desirable or appropriate and may give any of them
such further designations or alternate
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titles as it considers desirable. Any number of offices may be held by the same
person unless the Agreement or these By-laws otherwise provide.
Section 4.2. Term of Office; Resignation; Removal; Vacancies.
Unless otherwise provided in the resolution of the Board of Directors electing
any Officer, each Officer shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any
Officer may resign at any time upon written notice to the Board or to the
President or the Secretary of the Company. Such resignation shall take effect at
the time specified therein, and, unless otherwise specified therein, no
acceptance of such resignation shall be necessary to make it effective. The
Board may remove any Officer with or without cause at any time. Any such removal
shall be without prejudice to the contractual rights of such Officer, if any,
with the Company, but the election of an Officer shall not of itself create
contractual rights. Any vacancy occurring in any office of the Company by death,
resignation, removal or otherwise may be filled by the Board at any regular or
special meeting.
Section 4.3. Powers and Duties. The Officers of the Company
shall have such powers and duties in the management of the Company as shall be
stated in these By-laws or in a resolution of the Board of Directors which is
not inconsistent with these By-laws and, to the extent not so stated, as
generally pertain to comparable offices in a corporation organized under the
General Corporation Law of the State of Delaware, subject to the control of the
Board. The Secretary shall have the duty to record the proceedings of the
meetings of the Securityholders, the Board of Directors and any committees in a
book to be kept for that purpose. The Board may require any Officer, agent or
employee to give security for the faithful performance of his or her duties.
ARTICLE V
SECURITIES
Section 5.1. Certificates for Securities. The Preferred
Securities in the Company shall be registered in certificated form. If such
certificate is manually countersigned by a transfer agent or by a registrar, any
other signature on the certificate may be a facsimile. In case any Officer who
has signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such Officer before such certificate is issued, it may be
issued by the Company with the same effect as if such person were such Officer
at the date of issue.
Section 5.2. Lost, Stolen or Destroyed Certificates; Issuance
of New Certificates. The Company may issue a new certificate representing
Securities in the place of any certificate theretofore issued by it, alleged to
have been lost, stolen or destroyed, and the Company may require the owner of
the lost, stolen or destroyed certificate, or such owner's legal representative,
to give the Company a bond sufficient to indemnify it against any claim that may
be made against it on account of the alleged loss, theft or destruction of any
such certificate or the issuance of such new certificate or uncertificated
Securities.
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ARTICLE VI
MISCELLANEOUS
Section 6.1. Seal. The Company may have a company seal which
shall have the name of the Company inscribed thereon and shall be in such form
as may be approved from time to time by the Board of Directors. The Company seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
in any other manner reproduced.
Section 6.2. Waiver of Notice of Meetings of Securityholders,
Directors and Committees. Whenever notice is required to be given by law or
under any provision of the Agreement or these By-laws, a written waiver thereof,
signed by the person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Securityholders, Directors or
a committee of Directors need be specified in any written waiver of notice
unless so required by the Agreement or these By-laws.
Section 6.3. Indemnification of Directors, Officers and
Employees. The Company shall indemnify to the full extent permitted under the
Delaware Act and other applicable law any person made or threatened to be made a
party to any action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that such person or such person's
testator or intestate is or was a Director, Officer or employee of the Company
or serves or served at the request of the Company any other enterprise as a
Director, director, officer or employee except for such Director's or Officer's
gross negligence or willful misconduct. Expenses, including reasonable
attorneys' fees, incurred by any such person in defending any such action, suit
or proceeding shall be paid or reimbursed by the Company promptly upon receipt
by it of an undertaking of such person to repay such expenses if it shall
ultimately be determined that such person is not entitled to be indemnified by
the Company. The rights provided to any person by this By-Law shall be
enforceable against the Company by such person who shall be presumed to have
relied upon it in serving or continuing to serve as a Director, Officer or
employee as provided above. No amendment of this By-Law shall impair the rights
of any person arising at any time with respect to events occurring prior to such
amendment. For purposes of this By-Law, the term "Company" shall include any
predecessor of the Company and any constituent company (including any
constituent of a constituent) absorbed by the Company in a consolidation or
merger; the term "other enterprise" shall include any limited liability company,
corporation, partnership, joint venture, trust or employee benefit plan; service
"at the request of the Company" shall include service as a Director, Officer or
employee of the Company which imposes duties on, or involves services by, such
Director, Officer or employee with respect to an employee benefit plan, its
participants or beneficiaries; any excise taxes assessed on a person with
respect to an employee benefit plan shall be deemed to be indemnifiable
expenses; and action by a person with respect to an employee benefit plan which
such person reasonably believes to be in the interest of the participants and
beneficiaries of such plan shall be deemed to be action not opposed to the best
interests of the Company. The
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rights conferred on any Person by this Section 6.3 shall not be exclusive of any
other rights which such Person may have or hereafter acquire under any statute,
provision of these By-Laws, the Agreement, any other agreement, vote of
Securityholders or disinterested Directors or otherwise. The Company's
obligation, if any, to indemnify any Person who was or is serving at its request
as a director, officer, employee or agent of any other enterprise shall be
reduced by any amount such Person may collect as indemnification from such other
enterprise. Any repeal or modification of the foregoing provisions of this
Section 6.4 shall not adversely affect any right of protection hereunder of any
Person in respect of any act or omission occurring prior to the time of such
repeal or modification.
Section 6.4. Interested Directors; Quorum. No contract or
transaction between the Company and one or more of its Directors or Officers, or
between the Company and any other limited liability company, corporation,
partnership, association or other organization in which one or more of its
Directors or Officers are Directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the Director
or Officer is present at or participates in the meeting of the Board of
Directors or committee thereof which authorizes the contract or transaction, or
solely because his or her or their votes are counted for such purpose, if: (1)
the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the Board or the
committee, and the Board or committee in good faith authorizes the contract or
transaction by the affirmative votes of disinterested Directors, even though the
disinterested Directors be less than a quorum; or (2) the material facts as to
his or her relationship or interest and as to the contract or transaction are
disclosed or are known to the Securityholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
Securityholders; or (3) the contract or transaction is fair as to the Company as
of the time it is authorized, approved or ratified, by the Board, a committee
thereof or the Securityholders. Common or interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
Section 6.5. Form of Records. Any records maintained by the
Company in the regular course of its business, including its Securities ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape or disk, photographs, microphotographs or any other
information storage device, provided that the records so kept can be converted
into clearly legible form within a reasonable time. The Company shall so convert
any records so kept upon the request of any person entitled to inspect the same.
Section 6.6. Amendment of By-laws. These By-laws may be
amended or repealed, and new by-laws adopted, by the Board of Directors in
accordance with the Agreement.
Section 6.7. Governing Law. These By-laws shall be governed by
and construed in accordance with the laws of the State of Delaware (without
regard to principles of conflict of laws).
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Annex D
FORM OF SUBORDINATED NOTE
UBS AG,
acting through its Cayman Islands branch
_% PERPETUAL SUBORDINATED NOTE
UBS AG, a bank organized under the laws of Switzerland (the "Bank"),
acting through its Cayman Islands branch (the "Cayman Islands branch"), for
value received, hereby promises to pay to UBS PREFERRED FUNDING COMPANY LLC II,
a Delaware limited liability company (the "Company"), principal and interest on
the principal amount of this Subordinated Note (this "Subordinated Note"), under
the terms and conditions described hereunder.
Section 1. Definitions. The following terms are used herein with the
meanings assigned to them below:
"Administrative Action" means any judicial decision, official
administrative pronouncement, published or private ruling, regulatory
procedure, notice or announcement (including any notice or announcement
of intent to adopt such procedures or regulations) by any legislative
body, court, governmental authority or regulatory body having
appropriate jurisdiction.
"Bank" means UBS AG, a bank organized under the laws of
Switzerland, acting through its Cayman Islands branch.
A "Bankruptcy Event" shall be deemed to occur if (i) at any
time the Bank's unconsolidated unsubordinated liabilities exceed its
unconsolidated total assets (valued at the higher of their
going-concern and their liquidation value), as calculated based on the
most recent unconsolidated interim balance sheet of the Bank and the
unsubordinated creditors of the Bank do not agree to subordinate their
claims to the extent that such liabilities exceed such assets; or (ii)
the Swiss Federal Banking Commission exercises the broad discretion
granted to it under the Swiss Banking Law before the occurrence of such
an excess as described in (i), above, by withdrawing the banking
license of the affected bank, which has then been required to go into
liquidation pursuant to Article 23 quinquies of the Swiss Banking Law.
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"Business Day" means a day on which (i) the Trans-European
Automated Real-Time Gross Settlement Express Transfer System ("TARGET")
is operating, (ii) banks are open for business and carrying out
transactions in U.S. dollars in London, Luxembourg and Wilmington,
Delaware, U.S.A.
"Calculation Agent" means the London branch of UBS AG.
"Capital Event" means the determination by the Bank after
consultation with the Swiss Federal Banking Commission that the Company
Preferred Securities cannot be included in calculating the Tier 1
capital of the Bank on a consolidated basis.
"Cayman Islands branch" means the branch of the Bank located
in the Cayman Islands.
"Change in Tax Law" means the receipt by the Bank of an
opinion of a nationally recognized law firm or other tax advisor (which
may be an accounting firm) in Switzerland, the United States or the
Cayman Islands, as appropriate, experienced in such matters to the
effect that an event of the type described in clause (A), (B) or (C) of
the definition of "Tax Event" has occurred or will occur as a result of
(i) any amendment to, clarification of, or change (including any
announced prospective change) in, the laws or treaties (or any
regulations under any laws or treaties) of the United States,
Switzerland or the Cayman Islands or any political subdivision or
taxing authority of or in the United States, Switzerland or the Cayman
Islands affecting taxation or (ii) any Administrative Action or any
amendment to, clarification of, or change in the official position or
Bank interpretation of any Administrative Action or any interpretation
or pronouncement that provides for a position with respect to any
Administrative Action that differs from the previously generally
accepted position, in each case, by any legislative body, court,
governmental authority or regulatory body, regardless of the manner in
which such amendment, clarification, change, interpretation or
pronouncement is made known, which amendment, clarification, change or
Administrative Action is effective or which interpretation or
pronouncement is announced on or after the date of issuance of the
Company Preferred Securities.
"Company" means UBS Preferred Funding Company LLC II, a
Delaware limited liability company.
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"Company Agreement" means the Amended and Restated Limited
Liability Company Agreement of the Company, as amended and restated as
of the Issue Date of the Company Preferred Securities.
"Company Common Securities" means the securities of the
Company representing the common limited liability company interests in
the Company.
"Company Preferred Securities" means the _% Noncumulative
Company Preferred Securities, aggregate liquidation preference $_,
offered by the Company pursuant to a Prospectus dated _, 2001 together
with any subsequent offering by the Company of _% Noncumulative Company
Preferred Securities, each representing preferred limited liability
company interests in the Company.
"Dividend Payment Date" means, with respect to dividends on
the Company Preferred Securities, the date on which such dividends are
payable under the Company Agreement.
"Determination Date" for an Interest Period means the day that
is two London Banking Days preceding the first day of that Interest
Period.
"Eligible Investments" means, pursuant to the Investment
Policies, the assets or investments which the Company may hold and
consist of (i) the Subordinated Notes and (ii) other securities issued
by the Bank acting through a branch, agency or other office located
outside of the United States or by a non- U.S. branch of a non-U.S.
subsidiary of the Bank.
"Interest Payment Date" means, with respect to the
Subordinated Notes, each date on which interest is payable, as
specified in Section 3(a).
"Interest Period" has the meaning ascribed thereto in Section
3.
"Investment Company Act Event" means the receipt by the Bank
of an opinion of a nationally recognized law firm in the United States
experienced in such matters to the effect that there is more than an
insubstantial risk that the Company or the Trust is an "investment
company" within the meaning of the 1940 Act.
"Investment Policies" means the investment policies of the
Company as set forth in Annex F of the Company Agreement.
"Issue Date" means the date of initial issuance of the Company
Preferred Securities and the Trust Preferred Securities.
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"London Banking Day" means a day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market.
"1940 Act" means the Investment Company Act of 1940, as
amended.
"Subordinated Note Make Whole Amount" as applied to a
redemption of this Subordinated Note means the greater of (i) 100% of
the principal amount of this Subordinated Note and (ii) as determined
by a Quotation Agent (as defined below), the sum of the present value
of the principal amount of this Subordinated Note together with the
present values of scheduled payments of interest accrued from the date
of redemption to the Dividend Payment Date in October 2010 (the
"Remaining Life"), in each case discounted to the date of redemption on
a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate.
For purposes of determining the Subordinated Note
Make Whole Amount:
"Adjusted Treasury Rate" means, with respect to any
redemption date, the Treasury Rate plus .75%.
"Comparable Treasury Issue" means, with respect to
any Redemption Date, the United States Treasury security
selected by the Quotation Agent as having a maturity
comparable to the Remaining Life that would be utilized, at
the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the Remaining Life. If no
United States Treasury security has a maturity that is within
a period from three months before to three months after the
Interest Payment Date and Dividend Payment Date in October
2010, the two most closely corresponding United States
Treasury securities shall be used as the Comparable Treasury
Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest
month using such securities.
"Comparable Treasury Price" means (A) the average of
five Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest of such Reference
Treasury Dealer Quotations, or (B) if the Calculation Agent
obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Quotation Agent" means UBS Warburg LLC and its
successors, except that if UBS Warburg LLC shall cease to be a
primary
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U.S. Government securities dealer in New York City (a "Primary
Treasury Dealer"), the Corporation will designate another
Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation
Agent and (ii) any other Primary Treasury Dealer selected by
the Quotation Agent after consultation with the Company.
"Reference Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any Redemption
Date, the average, as determined by the Calculation Agent, of
the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal
amount) quoted in writing to the Calculation Agent by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on
the third Business Day preceding such Redemption Date.
"Treasury Rate" means (i) the yield, under the
heading which represents the average for the week immediately
prior to the redemption date, appearing in the most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Federal
Reserve and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under
the caption "Treasury Constant Maturities," for the maturity
corresponding to the Remaining Life (or if no maturity is
within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to
the Remaining Life will be determined and the Treasury Rate
will be interpolated or extrapolated from such yields on a
straight-line basis, rounding to the nearest month) or (ii) if
such release (or any successor release) is not published
during the week preceding the calculation date or does not
contain such yields, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable
Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such
Redemption Date. The Treasury Rate will be calculated on the
third Business Day preceding the Redemption Date.
"Subordinated Notes" means the 8.622% Perpetual Subordinated
Notes issued by the Cayman Islands branch under the Subordinated Notes
Purchase Agreement, including this Subordinated Note.
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"Subordinated Notes Purchase Agreement" means the Subordinated
Notes Purchase Agreement, dated 2001 between the Bank,
acting through the Cayman Islands branch, and the Company.
"Swiss Federal Banking Commission" means the Swiss Federal
Banking Commission and, if any successor governmental authority
succeeds to the bank regulatory functions of the Swiss Federal Banking
Commission in Switzerland, such successor governmental authority;
provided, however, that if the Bank becomes domiciled in a jurisdiction
other than Switzerland, then each reference herein to the Swiss Federal
Banking Commission shall be deemed to instead refer to the governmental
authority having primary regulatory authority with respect to the
Bank's capital adequacy in such other jurisdiction.
"Tax Event" means the receipt by the Bank of an opinion of a
nationally recognized law firm or other tax advisor (which may be an
accounting firm) in Switzerland or the United States, as appropriate,
experienced in such matters to the effect that there is more than an
insubstantial risk that (A) the Company or the Trust is or will be
subject to more than a de minimis amount of additional taxes, duties or
other governmental charges, (B) the Bank is or will be required to pay
any additional amounts in respect of any taxes, duties or other
governmental charges with respect to payments of interest or principal
on the Subordinated Notes and with respect to any payments on the Trust
Preferred Securities, (C) the Company is or will be required to pay any
additional amounts in respect of any taxes, duties or other
governmental charges with respect to payments of dividends on the
Company Preferred Securities or the Trust is or will be required to pay
any additional amounts in respect of any taxes, duties or other
governmental charges with respect to distributions on the Trust
Preferred Securities, or (D) the treatment of any of the Company's
items of income, gain, loss, deduction or expense, or the treatment of
any item of income, gain, loss, deduction or expense of the Bank
related to the Subordinated Notes or its ownership of the Company, in
each case as reflected on the tax returns (including estimated returns)
filed (or to be filed) by the Company or the Bank, will not be
respected by a taxing authority, as a result of which the Company or
the Bank is or will be subject to more than a de minimis amount of
additional taxes, duties or other governmental charges or civil
liabilities, the effect of which cannot be avoided by the Company or
the Bank taking reasonable measures available to it without any adverse
effect on or material cost to the Bank or the Company (as determined by
the Bank in its sole discretion).
"Telerate Page 3750" means the display designated as "Page
3750" on the Bridge/Telerate Service (or such other page as may replace
Page 3750) or such other service or services as may be nominated by the
British
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Bankers' Association as the information vendor for the purpose of
displaying London interbank offered rates for U.S. dollar deposits.
"Trust" means UBS Preferred Funding Trust II, a Delaware
statutory business trust.
"Trust Preferred Securities" means the _% Noncumulative Trust
Preferred Securities, aggregate liquidation amount $_, offered by the
Trust together with any subsequent offering by the Trust of _%
Noncumulative Trust Preferred Securities, in each case representing an
equal number of Company Preferred Securities.
"UBS AG Senior Liabilities" has the meaning set forth in
Section 6(a).
"U.S. dollars," "dollars," "U.S.$" and "$" mean the currency
of the United States of America.
Section 2. Form of Subordinated Notes. This Subordinated Note is one of
a duly authorized issue of the Subordinated Notes of the Bank in the aggregate
principal amount of $_ designated as its _% Perpetual Subordinated Notes and
purchased pursuant to the Subordinated Notes Purchase Agreement. The
Subordinated Notes are represented by a single definitive note in registered
form.
Section 3. Payments of Interest.
(a) Interest on the Subordinated Notes is payable from the date of
initial issuance as follows (or, if any such day is not a Business Day, the next
Business Day, but without any additional interest or other payment in respect of
such delay) (each an "Interest Payment Date" and the period from and including
an Interest Payment Date, or the date of initial issuance, as applicable, to but
not including the next Interest Payment Date, an "Interest Period"):
(i) for each Interest Period through the Interest Period
ending on the Interest Payment Date in - 2011, semi-annually in arrears
on April 1 and October 1 of each year at a fixed rate per annum on the
principal amount of this Subordinated Note equal to _% (calculated on
the basis of a 360-day year consisting of twelve 30-day months); and
(ii) for each Interest Period ending after 2011, quarterly
in arrears on the first business day on or after , , and
of each year at a floating rate per annum on the principal amount of
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this Subordinated Note equal to 3.07% above three-month LIBOR
(calculated on the basis of the actual number of days elapsed in a
360-day year).
LIBOR, with respect to a Determination Date, means the rate (expressed
as a percentage per annum) for deposits in U.S. dollars for a three-month period
commencing on the second London Banking Day immediately following that
Determination Date that appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on that Determination Date. If such rate does not appear on Telerate Page
3750, LIBOR will be determined on the basis of the rates which deposits in U.S.
dollars for a three-month period commencing on the second London Banking Day
immediately following that Determination Date and in a principal amount of not
less than $1,000,000 that is representative for a single transaction in such
market at such time, are offered to prime banks in the London interbank market
by four major banks in the London interbank market selected by the Calculation
Agent, after consultation with the Company, at approximately 11:00 a.m., London
time, on that Determination Date.
The Calculation Agent will request the principal London office of each
of such banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR with respect to that Determination will be the
arithmetic mean of such quotations. If fewer than two quotations are provided,
LIBOR in respect of that Determination Date will be the arithmetic mean of the
rates quoted by three major money center banks in New York City selected by the
Calculation Agent, after consultation with the Company, at approximately 11:00
a.m., New York City time, on that Determination Date for loans in U.S. dollars
to leading European banks for a three-month period commencing on the second
London Banking Day immediately following that Determination Date and in a
principal amount of not less than $1,000,000. However, if the banks selected by
the Calculation Agent to provide quotations are not quoting as mentioned in this
paragraph, LIBOR for the applicable period will be the same as LIBOR as
determined on the previous Determination Date.
All percentages resulting from any calculations on this Subordinated
Note will be rounded, if necessary, to the nearest one hundred-thousandth of a
percentage point, with five one-millionths of a percentage point rounded upward
(e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and
all dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward).
(b) Interest due on an Interest Payment Date is deferrable at the
option of the Cayman Islands branch to the extent that, pursuant to the Company
Agreement, dividends on the Company Preferred Securities due on the
corresponding Dividend Payment Date would constitute Nondefinitive Dividends (as
defined in the Company Agreement). Interest deferred in this manner will not
itself bear interest.
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Section 4. Redemption. The Subordinated Notes are redeemable with the
consent of the Swiss Federal Banking Commission and at the option of the Cayman
Islands branch:
(a) on the Interest Payment Date in - 2011 or any Interest
Payment Date occurring after that date, in whole or in part, at a
redemption price equal to 100% of their principal amount plus interest
accrued but unpaid to the date fixed for redemption; and
(b) prior to the Interest Payment Date in - 2011, in whole but
not in part, if a Tax Event resulting from a Change in Tax Law (and
relating to an event described in clauses (A), (B) or (C) of the
definition of "Tax Event") occurs at a redemption price equal to 100%
of their principal amount plus interest accrued but unpaid to the date
fixed for redemption, or
(c) prior to the Interest Payment Date in - 2011, in whole but
not in part, if a Tax Event not resulting from a Change in Tax Law
relating to an event described in clauses (A), (B) or (C) of the
definition of "Tax Event", an Investment Company Act Event or a Capital
Event occurs at a redemption equal to interest accrued but unpaid to
the date fixed for redemption plus the Subordinated Note Make Whole
Amount.
Section 5. Additional Amounts. If the Cayman Islands branch is required
to withhold any taxes, duties or other governmental changes with respect to any
payment in respect of this Subordinated Note, the Cayman Islands branch will pay
such additional amounts as shall be required so that the amount received by the
Company under this Subordinated Note is not less than the amount that would have
been received in the absence of any such additional taxes, duties or other
governmental charges.
Section 6. Subordination.
(a) This Subordinated Note constitutes a general and unsecured
obligation of the Bank and, in liquidation of the Bank, will rank, both as to
payment and in liquidation:
(i) subordinate and junior to all deposits and other
liabilities of the Bank (including those in respect of bonds, notes and
debentures that do not expressly rank pari passu with the obligations
of the Bank under the Subordinated Notes; and
(ii) senior to the ordinary shares and any other securities of
the Bank expressed to rank junior to the most senior preference shares
of the Bank (if any) from time to time outstanding.
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The foregoing liabilities that rank senior to this Subordinated Note are
collectively called "UBS AG Senior Liabilities".
(b) Payments under the Subordinated Notes (other than payments upon a
winding-up or dissolution, by bankruptcy or otherwise, in Switzerland of the
Bank) are conditional upon the Bank (i) not being in default in the payment of
UBS AG Senior Liabilities, (ii) being able to pay its debts as they fall due and
(iii) having consolidated gross assets in excess of consolidated gross
liabilities (other than liabilities to persons who are not senior creditors) at
the time of payment. A report as to the insolvency of the Bank by two persons,
each being a managing director, director or other authorized officer or agent of
the Bank or employees of the independent accountants of the Bank will, in the
absence of manifest error be treated and accepted by the Bank, the holders of
Company Preferred Securities and all other interested parties as correct and
sufficient evidence thereof.
Section 7. Failure of Payment. If the Bank fails to make a payment when
due of an installment of interest on this Subordinated Note, the Company shall
be entitled to seek to enforce payment only of the defaulted installment of
interest but not in respect of any failure to pay interest due under this
Subordinated Note that was deferred because the dividends on the Company
Preferred Securities on the corresponding Dividend Payment Date would have
constituted Nondefinitive Dividends (as defined in the Company Agreement). The
Company may, in its discretion, proceed to protect and enforce its rights by
such appropriate judicial proceedings as the Company shall deem most effectual
to protect and enforce any such rights, whether for the specific performance of
any covenant or agreement in the Subordinated Notes Purchase Agreement or in aid
of the exercise of any power granted therein, or to enforce any other proper
remedy. Except with respect to a failure of payment of principal, the principal
amount of this Subordinated Note shall not be subject to acceleration or become
due and payable, whether upon notice or otherwise, upon the failure of the Bank
to make a payment when due of an installment of interest or a winding-up of the
Bank.
If a Bankruptcy Event or a Capital Event occurs, then this Subordinated
Note shall be canceled and the Bank's obligations hereunder (including, without
limitation, its obligations to pay principal and interest, including interest
not paid on any Interest Payment date as specified in Section 3(b) shall be
forgiven.
If the Bank is liquidated and upon commencement of the related
liquidation proceedings the Subordinated Notes are still outstanding, then the
Subordinated Notes or other Eligible Investments shall be distributed by the
Company to the Bank, as holder of the Company Common Securities.
Section 8. Forgiveness of Debt. If a Bankruptcy Event or a Capital
Event occurs, then this Subordinated Note or successor Eligible Investments then
held by the
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Company shall be canceled and the Bank's obligations thereunder (including,
without limitation, its obligations to pay principal and interest, including any
interest deferred in accordance with Section 3(b)) shall be forgiven.
Section 9. Transfer of the Subordinated Note. This Subordinated Note
may not be sold and may not be divided into denominations of less than $1,000.
Section 10. GOVERNING LAW. THIS SUBORDINATED NOTE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED
STATES OF AMERICA.
Section 11. Submission to Jurisdiction. The Bank irrevocably consents
and agrees, that any legal action, suit or proceeding against it with respect to
its obligations, liabilities or any other matter arising out of or in connection
with this Agreement may be brought in the courts of the State of New York or the
courts of the United States of America located in New York City and until
amounts due and to become due under this Subordinated Note have been paid,
hereby irrevocably consents and submits to the non-exclusive jurisdiction of
each such court in personam, generally and unconditionally with respect to any
such action, suit or proceeding for itself and in respect of its properties,
assets and revenues. Service of process upon the branch in any such action, suit
or proceeding shall be deemed in every respect service of process upon the Bank.
The Bank hereby irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid action, suits or proceedings brought in the
United States Federal courts located in New York City or the courts of the State
of New York and hereby further irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. The
provisions of this Section 11 shall survive any termination of this Subordinated
Note, in whole or in part.
Section 12. Modification and Amendment. This Subordinated Note may be
modified or amended only by the written agreement of the Cayman Islands branch
and the Company.
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142
IN WITNESS WHEREOF, the Bank has caused this instrument to be duly
executed.
Dated: _ , 2001
UBS AG,
acting through its Cayman Islands branch
By: ________________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer - Americas and
Regional Chief Operating Officer
By: ________________________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
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143
Annex E
to the Amended and Restated
Limited Liability Company Agreement
LIST OF INITIAL DIRECTORS AND OFFICERS
Name Position and Offices Held
--------------------------- ------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ Managing Director and President
Per Dyrvik Director and Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Director and Secretary
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144
Annex F
to the Amended and Restated
Limited Liability Company Agreement
INVESTMENT POLICIES
The Company will maintain its assets in a manner that will not require
the Company to be registered as an investment company under the 1940 Act. The
Company will not (i) invest in the securities of other issuers for the purpose
of exercising control over such issuers, (ii) underwrite securities of other
issuers, (iii) actively trade in investments, (iv) offer securities in exchange
for property or (v) make loans to third parties, including, without limitation,
officers, directors or other affiliates of the Company.
The Company may not hold or invest in any securities other than the
Subordinated Notes issued by the Cayman Islands branch of the Bank with an
aggregate principal amount of $- or other securities issued by the Bank acting
through a branch, agency or other office located outside of the United States or
by a non-U.S. branch of a non-U.S. subsidiary of the Bank (together, "Eligible
Investments"). With respect to any Eligible Investments other than the
Subordinated Notes purchased by the Company, the terms thereof must be
established in good faith to reflect, to the extent deemed advisable by the
Bank, arm's-length market terms at the time of purchase and the purchase by the
Company of Eligible Investments must be approved by the affirmative vote of a
majority of the entire Board of Directors.
Upon receipt at of the principal amount of the Subordinated Notes, the
Company will either invest the principal amount received in other Eligible
Investments or, if the Company elects to redeem the Company Preferred Securities
at such time (subject to having received prior approval of the Swiss Federal
Banking Commission to do so, if then required), apply such amount to the
redemption price of the Company Preferred Securities.
Capitalized terms not defined herein have the meanings ascribed to such
terms in the Amended and Restated Limited Liability Company Agreement, dated -
2001, of UBS Preferred Funding Company LLC II, as the same may be amended from
time to time.
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145
Annex G
to the Amended and Restated
Limited Liability Company Agreement
AMOUNT OF COMPANY
CERTIFICATE NUMBER - PREFERRED SECURITIES: $-
-% NONCUMULATIVE COMPANY PREFERRED SECURITIES
(liquidation preference $1,000 per security)
of
UBS PREFERRED FUNDING COMPANY LLC II
UBS PREFERRED FUNDING COMPANY LLC II, a limited liability
company formed under the laws of the State of Delaware (the "Company"), hereby
certifies that UBS Preferred Funding Trust II (the "Securityholder") is the
registered owner of Company Preferred Securities representing preferred limited
liability company interests in the Company, which are designated the -%
Noncumulative Company Preferred Securities, liquidation preference $1,000 per
security and aggregate liquidation preference $- (the "Company Preferred
Securities"). Subject to certain obligations which may arise under the Delaware
Limited Liability Company Act (the "Delaware Act"), no additional payments will
be required pursuant to the Delaware Act for the Company Preferred Securities to
represent preferred limited liability company interests in the Company, as to
which the Securityholders of the Company who hold the Company Preferred
Securities (the "Securityholders"), in their capacities as such, have no
liability in excess of their obligations to make payments provided for in the
LLC Agreement (as defined below) and their share as provided in the LLC
Agreement of the Company's assets and undistributed profits (subject to their
obligation to repay any funds wrongfully distributed to them), and are
transferable on the books and records of the Company, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer and otherwise in accordance with the provisions of the
LLC Agreement. The powers, preferences and special rights and limitations of the
Company Preferred Securities are set forth in, and this certificate and the
Company Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Limited Liability Company Agreement of the Company dated as of October 10, as
the same may be amended from time to time in accordance with its terms (the "LLC
Agreement"), authorizing the issuance of the Company Preferred Securities and
determining the powers, preferences and other special rights and limitations,
regarding dividends, voting, return of capital and otherwise, and other matters
relating to the Company Preferred Securities. Capitalized terms used herein but
not defined herein shall have the meaning given them in the LLC Agreement. The
Securityholder is entitled to the benefits of the Bank Subordinated Guarantee of
UBS AG, a bank organized under the laws of Switzerland, dated as of - 2001 (the
"Bank Subordinated Guarantee") to the extent provided therein. The Company will
furnish a copy of the LLC Agreement and the Bank Subordinated Guarantee to
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146
the Securityholder without charge upon written request to the Company at its
principal place of business.
All dividends and redemption price and other payments and all
other monetary rights and obligations in respect of the Company Preferred
Securities shall be performed in U.S. dollars.
The Securityholder, by accepting this certificate, is deemed
to have agreed to be bound by the provisions of the LLC Agreement. Upon receipt
of this certificate, the Securityholder is admitted to the Company as a
Preferred Securityholder, is bound by the LLC Agreement and is entitled to the
benefits thereunder.
This certificate shall be governed by and construed in
accordance with the laws of the State of Delaware (without regard to principles
of conflict of laws).
G-2
147
IN WITNESS WHEREOF, this certificate has been executed on
behalf of the Company by a duly authorized officer as of this - day of - 2001.
UBS PREFERRED FUNDING COMPANY LLC II
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and Managing Director
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148
Annex H
to the Amended Restated
Limited Liability Company Agreement
FORM OF NO DIVIDEND INSTRUCTION
(pursuant to Section 9.3 of the Amended and Restated Limited Liability Company
Agreement of UBS Preferred Funding Company LLC II)
[Date]
UBS Preferred Funding Company LLC II
[ ]
----------------
[ ]
----------------
[ ]
----------------
Attention: [ ]
----------------
[ ]
----------------
[ ]
----------------
[ ]
----------------
Attention: [ ]
----------------
Re: Dividends on Company Preferred Securities
Reference is made to the Amended and Restated Limited
Liability Company Agreement, dated as of - 2001 (as amended from time to time
the "Agreement"), of UBS Preferred Funding Company LLC II (the "Company"). Terms
used herein and defined in the Agreement are used herein as so defined.
Pursuant to Section 9.3 of the Agreement, the undersigned, as
the Common Securityholder[s], hereby instruct[s] the Company to pay [ ]% of the
otherwise scheduled dividends on the Company Preferred Securities on the
dividend payment date for such series immediately following the date of receipt
of this letter. All amounts otherwise payable on such series of Company
Preferred Securities shall be paid on the Company Common Securities in
accordance with the Agreement.
[Common Securityholder(s)]
-------------------------------
Name:
Title:
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149
Annex I
to Amended and Restated
Limited Liability Agreement
FORM OF NOMINEE LETTER
[Date]
Re: -% Noncumulative Company Preferred Securities
To the nominee holder of the above-referenced securities,
c/o [Common Depositary]
Ladies and Gentlemen:
With respect to any -% Noncumulative Company Preferred
Securities of UBS Preferred Funding Company LLC II (the "Company") that you may
hold as a nominee on behalf of another person or for your own account, you are
hereby authorized to omit from any statement that you may be required to furnish
to the Company under paragraph (a)(1)(i) or paragraph (a)(3)(i) of United
States Treasury Regulations Section 1.6031(c)-1T (the "Regulation") that part of
the information described in paragraphs (a)(1)(ii)(E) and (a)(3)(ii)(D) of the
Regulation regarding the method of acquisition and acquisition cost and that
part of the information described in paragraphs (a)(1)(ii)(F) and (a)(3)(ii)(E)
of the Regulation regarding the net proceeds from the transfer.
This authorization shall continue in effect for each taxable
year of the Company unless modified or revoked in writing by the Company more
than 60 days before the beginning of such taxable year.
Sincerely yours,
I-1