EXHIBIT 10.13
EXECUTION COPY
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AMENDED AND RESTATED TRUST AGREEMENT
among
TOWER GROUP, INC.,
as Depositor
JPMORGAN CHASE BANK,
as Property Trustee
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
as Delaware Trustee
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
as Administrative Trustees
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Dated as of September 30, 2003
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TOWER GROUP STATUTORY TRUST II
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINED TERMS..........................................................................1
SECTION 1.1. Definitions...................................................................1
ARTICLE II. THE TRUST..............................................................................9
SECTION 2.1. Name..........................................................................9
SECTION 2.2. Office of the Delaware Trustee; Principal Place of Business...................9
SECTION 2.3. Initial Contribution of Trust Property; Fees, Costs and Expenses..............9
SECTION 2.4. Purposes of Trust.............................................................9
SECTION 2.5. Authorization to Enter into Certain Transactions.............................10
SECTION 2.6. Assets of Trust..............................................................12
SECTION 2.7. Title to Trust Property......................................................12
ARTICLE III. PAYMENT ACCOUNT; PAYING AGENTS........................................................12
SECTION 3.1. Payment Account..............................................................12
SECTION 3.2. Appointment of Paying Agents.................................................12
ARTICLE IV. DISTRIBUTIONS; REDEMPTION.............................................................13
SECTION 4.1. Distributions................................................................13
SECTION 4.2. Redemption...................................................................14
SECTION 4.3. Subordination of Common Securities...........................................16
SECTION 4.4. Payment Procedures...........................................................16
SECTION 4.5. Withholding Tax..............................................................16
SECTION 4.6. Tax Returns and Other Reports................................................17
SECTION 4.7. Payment of Taxes, Duties, Etc. of the Trust..................................17
SECTION 4.8. Payments under Indenture or Pursuant to Direct Actions.......................17
SECTION 4.9. Exchanges....................................................................17
SECTION 4.10. Calculation Agent............................................................18
SECTION 4.11. Certain Accounting Matters...................................................18
ARTICLE V. SECURITIES............................................................................19
SECTION 5.1. Initial Ownership............................................................19
SECTION 5.2. Authorized Trust Securities..................................................19
SECTION 5.3. Issuance of the Common Securities; Subscription and Purchase of Notes........19
SECTION 5.4. The Securities Certificates..................................................19
SECTION 5.5. Rights of Holders............................................................20
SECTION 5.6. Book-Entry Preferred Securities..............................................20
SECTION 5.7. Registration of Transfer and Exchange of Preferred Securities
Certificates.................................................................21
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SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Securities Certificates.................22
SECTION 5.9. Persons Deemed Holders.......................................................23
SECTION 5.10. Cancellation.................................................................23
SECTION 5.11. Ownership of Common Securities by Depositor..................................23
SECTION 5.12. Restricted Legends...........................................................24
SECTION 5.13. Form of Certificate of Authentication........................................25
ARTICLE VI. MEETINGS; VOTING; ACTS OF HOLDERS.....................................................26
SECTION 6.1. Notice of Meetings...........................................................26
SECTION 6.2. Meetings of Holders of the Preferred Securities..............................26
SECTION 6.3. Voting Rights................................................................26
SECTION 6.4. Proxies, Etc.................................................................26
SECTION 6.5. Holder Action by Written Consent.............................................27
SECTION 6.6. Record Date for Voting and Other Purposes....................................27
SECTION 6.7. Acts of Holders..............................................................27
SECTION 6.8. Inspection of Records........................................................28
SECTION 6.9. Limitations on Voting Rights.................................................28
SECTION 6.10. Acceleration of Maturity; Rescission of Annulment; Waivers of Past
Defaults.....................................................................28
ARTICLE VII. REPRESENTATIONS AND WARRANTIES........................................................30
SECTION 7.1. Representations and Warranties of the Property Trustee and the
Delaware Trustee.............................................................30
SECTION 7.2. Representations and Warranties of Depositor..................................31
ARTICLE VIII. THE TRUSTEES..........................................................................32
SECTION 8.1. Number of Trustees...........................................................32
SECTION 8.2. Property Trustee Required....................................................32
SECTION 8.3. Delaware Trustee Required....................................................32
SECTION 8.4. Appointment of Administrative Trustees.......................................33
SECTION 8.5. Duties and Responsibilities of the Trustees..................................33
SECTION 8.6. Notices of Defaults and Extensions...........................................34
SECTION 8.7. Certain Rights of Property Trustee...........................................34
SECTION 8.8. Delegation of Power..........................................................36
SECTION 8.9. May Hold Securities..........................................................36
SECTION 8.10. Compensation; Reimbursement; Indemnity.......................................36
SECTION 8.11. Resignation and Removal; Appointment of Successor............................37
SECTION 8.12. Acceptance of Appointment by Successor.......................................38
SECTION 8.13. Merger, Conversion, Consolidation or Succession to Business..................39
SECTION 8.14. Not Responsible for Recitals or Issuance of Securities.......................39
SECTION 8.15. Property Trustee May File Proofs of Claim....................................39
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SECTION 8.16. Reports to and from the Property Trustee.....................................39
ARTICLE IX. TERMINATION, LIQUIDATION AND MERGER...................................................40
SECTION 9.1. Dissolution Upon Expiration Date.............................................40
SECTION 9.2. Early Termination............................................................40
SECTION 9.3. Termination..................................................................40
SECTION 9.4. Liquidation..................................................................41
SECTION 9.5. Mergers, Consolidations, Amalgamations or Replacements of Trust..............42
ARTICLE X. MISCELLANEOUS PROVISIONS..............................................................43
SECTION 10.1. Limitation of Rights of Holders..............................................43
SECTION 10.2. Agreed Tax Treatment of Trust and Trust Securities...........................43
SECTION 10.3. Amendment....................................................................43
SECTION 10.4. Separability.................................................................44
SECTION 10.5. Governing Law................................................................44
SECTION 10.6. Successors...................................................................44
SECTION 10.7. Headings.....................................................................44
SECTION 10.8. Reports, Notices and Demands.................................................45
SECTION 10.9. Agreement Not to Petition....................................................45
SECTION 10.10. Counterparts.................................................................45
Exhibit A.........Certificate of Trust of Tower Group Statutory Trust II
Exhibit B.........Form of Common Securities Certificate
Exhibit C.........Form of Preferred Securities Certificate
Exhibit D.........Junior Subordinated Indenture
Exhibit E.........Form of Transferor Certificate to be Executed for QIBs
Exhibit F.........Form of Transferee Certificate to be Executed by Transferees other than QIBs
Exhibit G.........Form of Officer's Financial Certificate of the Depositor
Schedule A .......Calculation of LIBOR
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THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of
September 30, 2003, among (i) Tower Group, Inc., a Delaware corporation
(including any successors or permitted assigns, the "Depositor"), (ii) JPMorgan
Chase Bank, a New York banking corporation, as property trustee (in such
capacity, the "Property Trustee"), (iii) Chase Manhattan Bank USA, National
Association, a national banking association, as Delaware trustee (in such
capacity, the "Delaware Trustee"), (iv) ▇▇▇▇▇▇▇ ▇. ▇▇▇, an individual, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, an individual and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual, each of whose
address is c/o Tower Group, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, as administrative trustees (in such capacities, each an "Administrative
Trustee" and, collectively, the "Administrative Trustees" and, together with the
Property Trustee and the Delaware Trustee, the "Trustees") and (v) the several
Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Property Trustee and the Delaware
Trustee have heretofore created a Delaware statutory trust pursuant to the
Delaware Statutory Trust Act by entering into a Trust Agreement, dated as of
September 25, 2003 (the "Original Trust Agreement"), and by executing and filing
with the Secretary of State of the State of Delaware the Certificate of Trust,
substantially in the form attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Trust to the Depositor, (ii) the issuance and sale of the Preferred
Securities by the Trust pursuant to the Purchase Agreement and (iii) the
acquisition by the Trust from the Depositor of all of the right, title and
interest in and to the Notes;
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, each party, for the
benefit of the other parties and for the benefit of the Holders, hereby amends
and restates the Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
DEFINED TERMS
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article I have the
meanings assigned to them in this Article I;
(b) the words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without
limitation";
(c) all accounting terms used but not defined herein
have the meanings assigned to them in accordance with United
States generally accepted accounting principles;
(d) unless the context otherwise requires, any
reference to an "Article", a "Section", a "Schedule" or an
"Exhibit" refers to an Article, a Section, a Schedule or an
Exhibit, as the case may be, of or to this Trust Agreement;
(e) the words "hereby", "herein", "hereof" and
"hereunder" and other words of similar import refer to this
Trust Agreement as a whole and not to any particular Article,
Section or other subdivision;
(f) a reference to the singular includes the plural
and vice versa; and
(g) the masculine, feminine or neuter genders used
herein shall include the masculine, feminine and neuter
genders.
"Act" has the meaning specified in Section 6.7.
"Additional Interest" has the meaning specified in Section 1.1
of the Indenture.
"Additional Interest Amount" means, with respect to Trust
Securities of a given Liquidation Amount and/or a given period, the amount of
Additional Interest paid by the Depositor on a Like Amount of Notes for such
period.
"Additional Taxes" has the meaning specified in Section 1.1 of
the Indenture.
"Additional Tax Sums" has the meaning specified in Section
10.5 of the Indenture.
"Administrative Trustee" means each of the Persons identified
as an "Administrative Trustee" in the preamble to this Trust Agreement, solely
in each such Person's capacity as Administrative Trustee of the Trust and not in
such Person's individual capacity, or any successor Administrative Trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Accounting Principles" means accounting practices
prescribed or permitted by the National Association of Insurance Commissioners
and, with respect to the Depositor's subsidiary insurance companies, the
applicable insurance department of the state of domicile of such insurance
subsidiary and, in each case, applied consistently throughout the periods
involved.
"Applicable Depositary Procedures" means, with respect to any
transfer or transaction involving a Book-Entry Preferred Security, the rules and
procedures of the Depositary for such Book-Entry Preferred Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.
"Applicable Insurance Regulatory Authority" means the
Superintendent of the New York State Insurance Department or, if at any time
after the execution of this Trust Agreement any such entity is not existing and
performing the duties now assigned to it, any successor body performing similar
duties or functions.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises (i) judging such Person a
bankrupt or insolvent, (ii) approving as properly filed a
petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any
applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law, (iii) appointing a
custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of such Person or of
any substantial part of its property or (iv) ordering the
winding up or liquidation of its affairs, and the continuance
of any such decree or order unstayed and in effect for a
period of sixty (60) consecutive days; or
(b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable
Federal or State bankruptcy, insolvency, reorganization or
other similar law, or the consent by it to the filing of any
such petition or to the appointment of a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar
official of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due and
its willingness to be adjudicated a bankrupt or insolvent, or
the taking of corporate action by such Person in furtherance
of any such action.
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"Bankruptcy Laws" means all Federal and state bankruptcy,
insolvency, reorganization and other similar laws, including the United States
Bankruptcy Code.
"Book-Entry Preferred Security" means a Preferred Security,
the ownership and transfers of which shall be made through book entries by a
Depositary.
"Business Day" means a day other than (a) a Saturday or
Sunday, (b) a day on which banking institutions in the City of New York are
authorized or required by law or executive order to remain closed or (c) a day
on which the Corporate Trust Office is closed for business.
"Calculation Agent" has the meaning specified in Section 4.10.
"Closing Date" has the meaning specified in the Purchase
Agreement.
"Code" means the United States Internal Revenue Code of 1986,
as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any time
after the execution of this Trust Agreement such Commission is not existing and
performing the duties assigned to it, then the body performing such duties at
such time.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.
"Common Security" means an undivided beneficial interest in
the assets of the Trust, having a liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement.
"Corporate Trust Office" means the principal office of the
Property Trustee at which any particular time its corporate trust business shall
be administered, which office at the date of this Trust Agreement is located at
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Institutional Trust
Services.
"Definitive Preferred Securities Certificates" means Preferred
Securities issued in certificated, fully registered form that are not Global
Preferred Securities.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code ss. 3801 et seq., or any successor statute
thereto, in each case as amended from time to time.
"Delaware Trustee" means the Person identified as the
"Delaware Trustee" in the preamble to this Trust Agreement, solely in its
capacity as Delaware Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor Delaware Trustee
appointed as herein provided.
"Depositary" means an organization registered as a clearing
agency under the Exchange Act that is designated as Depositary by the Depositor
or any successor thereto. DTC will be the initial Depositary.
"Depositary Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.
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"Depositor" has the meaning specified in the preamble to this
Trust Agreement and any successors and permitted assigns.
"Depositor Affiliate" has the meaning specified in Section
4.9.
"Distribution Date" has the meaning specified in Section 4. I
(a)(i).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company or any successor
thereto.
"Early Termination Event" has the meaning specified in Section
9.2.
"Event of Default" means any one of the following events
(whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Note Event of Default; or
(b) default by the Trust in the payment of any Distribution
when it becomes due and payable, and continuation of such
default for a period of thirty (30) days; or
(c) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable;
or
(d) default in the performance, or breach, in any material
respect of any covenant or warranty of the Trustees in this
Trust Agreement (other than those specified in clause (b) or
(c) above) and continuation of such default or breach for a
period of thirty (30) days after there has been given, by
registered or certified mail, to the Trustees and to the
Depositor by the Holders of at least twenty five percent (25%)
in aggregate Liquidation Amount of the Outstanding Preferred
Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee if a successor Property Trustee has not been
appointed within ninety (90) days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, and
any successor statute thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"Extension Period" has the meaning specified in Section
4.1(a)(ii).
"Fiscal Year" shall be the fiscal year of the Trust, which
shall be the calendar year, or such other period as is required by the Code.
"Global Preferred Security" means a Preferred Securities
Certificate evidencing ownership of Book-Entry Preferred Securities.
"Guarantee Agreement" means the Guarantee Agreement executed
and delivered by the Depositor and JPMorgan Chase Bank, as guarantee trustee,
contemporaneously with the execution and delivery of this Trust Agreement for
the benefit of the holders of the Preferred Securities, as amended from time to
time.
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"Holder" means a Person in whose name a Trust Security or
Trust Securities are registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Statutory Trust Act.
"Indemnified Person" has the meaning specified in Section
8.10(c).
"Indenture" means the Junior Subordinated Indenture executed
and delivered by the Depositor and the Note Trustee contemporaneously with the
execution and delivery of this Trust Agreement, for the benefit of the holders
of the Notes, a copy of which is attached hereto as Exhibit D, as amended or
supplemented from time to time.
"Indenture Redemption Price" means the Optional Note
Redemption Price or the Special Note Redemption Price, as applicable.
"Interest Payment Date" has the meaning specified in Section
1.1 of the Indenture.
"Investment Company Act" means the Investment Company Act of
1940, or any successor statute thereto, in each case as amended from time to
time.
"Investment Company Event" has the meaning specified in
Section 1.1 of the Indenture.
"LIBOR" has the meaning specified in Schedule A.
"LIBOR Business Day" has the meaning specified in Schedule A.
"LIBOR Determination Date" has the meaning specified in
Schedule A.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of any
Trust Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Notes to be contemporaneously redeemed or paid at maturity
in accordance with the Indenture, the proceeds of which will be used to pay the
Redemption Price of such Trust Securities, (b) with respect to a distribution of
Notes to Holders of Trust Securities in connection with a dissolution of the
Trust, Notes having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Notes are distributed and (c) with
respect to any distribution of Additional Interest Amounts to Holders of Trust
Securities, Notes having a principal amount equal to the Liquidation Amount of
the Trust Securities in respect of which such distribution is made.
"Liquidation Amount" means the stated amount of $1,000 per
Trust Security.
"Liquidation Date" means the date on which assets are to be
distributed to Holders in accordance with Section 9.4(a) hereunder following
dissolution of the Trust.
"Liquidation Distribution" has the meaning specified in
Section 9.4(d).
"Majority in Liquidation Amount" means Common or Preferred
Securities, as the case may be, representing more than fifty percent (50%) of
the aggregate Liquidation Amount of all (or a specified group of) then
Outstanding Common or Preferred Securities, as the case may be.
"Note Event of Default" means any "Event of Default" specified
in Section 5.1 of the Indenture.
"Note Redemption Date" means, with respect to any Notes to be
redeemed under the Indenture, the date fixed for redemption of such Notes under
the Indenture.
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"Note Trustee" means the Person identified as the "Trustee" in
the Indenture, solely in its capacity as Trustee pursuant to the Indenture and
not in its individual capacity, or its successor in interest in such capacity,
or any successor Trustee appointed as provided in the Indenture.
"Notes" means the Depositor's Floating Rate Junior
Subordinated Notes issued pursuant to the Indenture.
"Officers Certificate" means a certificate signed by the Chief
Executive Officer, the President or an Executive Vice President, and by the
Chief Financial Officer, Treasurer or an Assistant Treasurer, of the Depositor,
and delivered to the Trustees. Any Officers' Certificate delivered with respect
to compliance with a condition or covenant provided for in this Trust Agreement
(other than the certificate provided pursuant to Section 8.16 which is not an
Officers' Certificate) shall include:
(a) a statement by each officer signing the Officers'
Certificate that such officer has read the covenant or
condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in
rendering the Officers' Certificate;
(c) a statement that 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 such officer,
such condition or covenant has been complied with.
"Operative Documents" means the Purchase Agreement, the
Indenture, the Trust Agreement, the Guarantee Agreement, the Notes and the Trust
Securities.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for, or an employee of, the Depositor or any Affiliate of the
Depositor.
"Optional Redemption Price" means, with respect to any Trust
Security, an amount equal to one hundred percent (100%) of the Liquidation
Amount of such Trust Security on the Redemption Date, plus accumulated and
unpaid Distributions to the Redemption Date, plus the related amount of the
premium, if any, and/or accrued interest, including Additional Interest, if any,
thereon paid by the Depositor upon the concurrent redemption or payment at
maturity of a Like Amount of Notes.
"Optional Note Redemption Price" means, with respect to any
Note to be redeemed on any Redemption Date under the Indenture, an amount equal
to one hundred percent (100%) of the outstanding principal amount of such Note,
together with accrued interest, including any Additional Interest (to the extent
legally enforceable), thereon through but not including the date fixed as such
Redemption Date.
"Original Issue Date" means the date of original issuance of
the Trust Securities.
"Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
"Outstanding", when used with respect to any Trust Securities,
means, as of the date of determination, all Trust Securities theretofore
executed and delivered under this Trust Agreement, except:
(a) Trust Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation:
(b) Trust Securities for which payment or redemption money in
the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent in trust for the Holders
of such Trust Securities: provided, that if such Trust
Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Trust Agreement; and
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(c) Trust Securities that have been paid or in exchange for or
in lieu of which other Trust Securities have been executed and
delivered pursuant to the provisions of this Trust Agreement,
unless proof satisfactory to the Property Trustee is presented
that any such Trust Securities are held by Holders in whose
hands such Trust Securities are valid, legal and binding
obligations of the Trust;
provided, that in determining whether the Holders of the requisite Liquidation
Amount of the Outstanding Preferred Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Preferred
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or of any Trustee shall be disregarded and deemed not to be Outstanding, except
that (i) in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Preferred Securities that such Trustee knows to be so owned shall be so
disregarded and (ii) the foregoing shall not apply at anytime when all of the
Outstanding Preferred Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Preferred Securities so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Administrative Trustees the pledgee's right so to act
with respect to such Preferred Securities and that the pledgee is not the
Depositor, any Trustee or any Affiliate of the Depositor or of any Trustee.
"Owner" means each Person who is the beneficial owner of
Book-Entry Preferred Securities as reflected in the records of the Depositary
or, if a Depositary Participant is not the beneficial owner, then the beneficial
owner as reflected in the records of the Depositary Participant.
"Paying Agent" means any Person authorized by the
Administrative Trustees to pay Distributions or other amounts in respect of any
Trust Securities on behalf of the Trust.
"Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee for the benefit of
the Holders in which all amounts paid in respect of the Notes will be held and
from which the Property Trustee, through the Paying Agent, shall make payments
to the Holders in accordance with Sections 3.1, 4.1 and 4.2.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, company, limited liability company, trust, unincorporated association
or government, or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Preferred Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $1,000 and having the
rights provided therefor in this Trust Agreement.
"Preferred Securities Certificate" means a certificate
evidencing ownership of Preferred Securities, substantially in the form attached
as Exhibit C.
"Property Trustee" means the Person identified as the
"Property Trustee" in the preamble to this Trust Agreement, solely in its
capacity as Property Trustee of the Trust and not in its individual capacity, or
its successor in interest in such capacity, or any successor Property Trustee
appointed as herein provided.
"Purchase Agreement" means the Purchase Agreement executed and
delivered by the Trust, the Depositor and ▇▇▇▇▇▇▇ ▇▇▇▇, Ltd., as purchaser,
contemporaneously with the execution and delivery of this Trust Agreement, as
amended from time to time.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act of 1933, as amended.
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"Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided, that each Note Redemption Date and the stated maturity (or
any date of principal repayment upon early maturity) of the Notes shall be a
Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means the Special Redemption Price or
Optional Redemption Price, as applicable. If the Depositor has redeemed the
Notes at the Special Note Redemption Price, the Trust shall redeem the Trust
Securities at the Special Redemption Price. If the Depositor has redeemed the
Notes at the Optional Note Redemption Price, the Trust shall redeem the Trust
Securities at the Optional Redemption Price.
"Reference Banks" has the meaning specified in Schedule A.
"Responsible Officer" means, with respect to the Property
Trustee, the officer in the Institutional Trust Services department of the
Property Trustee having direct responsibility for the administration of this
Trust Agreement.
"Securities Act" means the Securities Act of 1933, and any
successor statute thereto, in each case as amended from time to time.
"Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.7.
"Special Redemption Price" means, with respect to any Trust
Security, an amount equal to one hundred seven and one half percent (107.5%) of
the Liquidation Amount of such Trust Security on the Redemption Date, plus
accumulated and unpaid Distributions to the Redemption Date, plus the related
amount of the premium, if any, and/or accrued interest, including Additional
Interest, if any, thereon paid by the Depositor upon the concurrent redemption
or payment at maturity of a Like Amount of Notes.
"Special Note Redemption Price" means, with respect to any
Note to be redeemed on any Redemption Date under the Indenture, an amount equal
to one hundred seven and one half percent (107.5%) of the outstanding principal
amount of such Note, together with accrued interest, including Additional
Interest, thereon through but not including the date fixed as such Redemption
Date.
"Statutory Financial Statements" means all financial
statements of the Depositor's subsidiary insurance companies for each relevant
period, prepared in accordance with Applicable Accounting Principles.
"Successor Securities" has the meaning specified in Section
9.5(a).
"Tax Event" has the meaning specified in Section 1.1 of the
Indenture.
"Trust" means the Delaware statutory trust known as "Tower
Group Statutory Trust II," which was created on September 25, 2003 under the
Delaware Statutory Trust Act pursuant to the Original Trust Agreement and the
filing of the Certificate of Trust, and continued pursuant to this Trust
Agreement.
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"Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented from time to
time in accordance with the applicable provisions hereof, including all
Schedules and Exhibits.
"Trustees" means the Administrative Trustees, the Property
Trustee and the Delaware Trustee, each as defined in this Article I.
"Trust Property" means (a) the Notes, (b) any cash on deposit
in, or owing to, the Payment Account and (c) all proceeds and rights in respect
of the foregoing and any other property and assets for the time being held or
deemed to be held by the Property Trustee pursuant to the trusts of this Trust
Agreement.
"Trust Security" means any one of the Common Securities or the
Preferred Securities.
ARTICLE II.
THE TRUST
SECTION 2.1. Name.
The trust continued hereby shall be known as "Tower Group
Statutory Trust II", as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and ▇▇▇ and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal Place
of Business.
The address of the Delaware Trustee in the State of Delaware
is Chase Manhattan Bank USA, National Association, c/o JPMorgan Chase Bank, 500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Road, Building 4, (3rd Floor), Newark, Delaware 19713,
Attention: Institutional Trust Services, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the Holders,
the Depositor, the Property Trustee and the Administrative Trustees. The
principal executive office of the Trust is ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as such address may be changed
from time to time by the Administrative Trustees following written notice to the
Holders and the other Trustees.
SECTION 2.3. Initial Contribution of Trust Property; Fees,
Costs and Expenses.
The Property Trustee acknowledges receipt from the Depositor
in connection with the Original Trust Agreement of the sum of ten dollars ($10),
which constituted the initial Trust Property. The Depositor shall pay all fees,
costs and expenses of the Trust (except with respect to the Trust Securities) as
they arise or shall, upon request of any Trustee, promptly reimburse such
Trustee for any such fees, costs and expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
fees, costs or expenses.
SECTION 2.4. Purposes of Trust.
(a) The exclusive purposes and functions of the Trust are to
(i) issue and sell Trust Securities and use the proceeds from such sale to
acquire the Notes and (ii) engage in only those activities necessary or
incidental thereto. The Delaware Trustee, the Property Trustee and the
Administrative Trustees are trustees of the Trust, and have all the rights,
powers and duties to the extent set forth herein. The Trustees hereby
acknowledge that they are trustees of the Trust.
(b) So long as this Trust Agreement remains in effect, the
Trust (or the Trustees acting on behalf of the Trust) shall not undertake any
business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, the Trust (or the Trustees acting on behalf
of the Trust) shall not (i) acquire any investments or engage in any activities
not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange,
mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or
interests therein, including to Holders, except as expressly provided herein,
(iii) incur any indebtedness for borrowed money or issue any other debt, (iv)
take or consent to any action that would result in the placement of a lien on
any of the Trust Property, (v) take or consent to any action that would
reasonably be expected to cause the Trust to become taxable as a corporation or
classified as other than a grantor trust for United States federal income tax
purposes, (vi) take or consent to any action that would cause the Notes to be
treated as other than indebtedness of the Depositor for United States federal
income tax purposes or (vii) take or consent to any action that would cause the
Trust to be deemed to be an "investment company" required to be registered under
the Investment Company Act.
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SECTION 2.5. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in
accordance with and subject to the terms of this Trust Agreement. In accordance
with the following provisions (i) and (ii), the Trustees shall have the
authority to enter into all transactions and agreements determined by the
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees, under this Trust Agreement, and to perform
all acts in furtherance thereof, including the following:
(i) As among the Trustees, each Administrative
Trustee shall severally have the power and authority to act on
behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Trust
Securities;
(B) to cause the Trust to enter into, and to
execute, deliver and perform on behalf of the Trust, such
agreements as may be necessary or desirable in connection with
the purposes and function of the Trust, including, without
limitation, a common securities subscription agreement and a
junior subordinated note purchase agreement;
(C) assisting in the sale of the Preferred
Securities in one or more transactions exempt from
registration under the Securities Act, and in compliance with
applicable state securities or blue sky laws;
(D) assisting in (tie sending of notices (other
than notices of default) and other information regarding the
Trust Securities and the Notes to the Holders in accordance
with this Trust Agreement;
(E) the appointment of a Paying Agent and
Securities Registrar in accordance with this Trust Agreement;
(F) execution of the Trust Securities on behalf
of the Trust in accordance with this Trust Agreement;
(G) execution and delivery of closing
certificates, if any, pursuant to the Purchase Agreement and
application for a taxpayer identification number for the
Trust;
(H) preparation and filing of all applicable tax
returns and tax information reports that are required to be
filed on behalf of the Trust;
(I) establishing a record date with respect to
all actions to be taken hereunder that require a record date
to be established, except as provided in Section 6.10(a);
(J) unless otherwise required by the Delaware
Statutory Trust Act to execute on behalf of the Trust (either
acting alone or together with the other Administrative
Trustees) any documents that such Administrative Trustee has
the power to execute pursuant to this Trust Agreement; and
(K) the taking of any action incidental to the
foregoing as such Administrative Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement.
(ii) As among the Trustees, the Property Trustee
shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) the receipt and holding of legal title of the
Notes;
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(B) the establishment of the Payment Account;
(C) the collection of interest, principal and any
other payments made in respect of the Notes and the holding of
such amounts in the Payment Account;
(D) the distribution through the Paying Agent of
amounts distributable to the Holders in respect of the Trust
Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Notes in accordance with the
terms of this Trust Agreement;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Notes to
the Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in
accordance with the terms of this Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and liquidation of
the Trust and the preparation, execution and filing of the
certificate of cancellation of the Trust with the Secretary of
State of the State of Delaware; and
(I) the taking of any action incidental to the
foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the
terms of this Trust Agreement and protect and conserve the
Trust Property for the benefit of the Holders (without
consideration of the effect of any such action on any
particular Holder).
(b) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the negotiation of the terms of, and the execution and
delivery of, the Purchase Agreement providing for the sale of the
Preferred Securities in one or more transactions exempt from
registration under the Securities Act, and in compliance with
applicable state securities or blue sky laws. and
(ii) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(c) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and authorized to operate the Trust so that the Trust will not be
taxable as a corporation or classified as other than a grantor trust for United
States federal income tax purposes, so that the Notes will be treated as
indebtedness of the Depositor for United States federal income tax purposes and
so that the Trust will not be deemed to be an "investment company" required to
be registered under the Investment Company Act. In respect thereof, each
Administrative Trustee is authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Trust Agreement, that such
Administrative Trustee determines in his or her discretion to be necessary or
desirable for such purposes, as long as such action does not adversely affect in
any material respect the interests of the Holders of the Outstanding Preferred
Securities. In no event shall the Administrative Trustees be liable to the Trust
or the Holders for any failure to comply with this Section 2.5 to the extent
that such failure results solely from a change in law or regulation or in the
interpretation thereof.
(d) Any action taken by a Trustee in accordance with its
powers shall constitute the act of and serve to bind the Trust. In dealing with
any Trustee acting on behalf of the Trust, no Person shall be required to
inquire into the authority of such Trustee to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
any Trustee as set forth in this Trust Agreement.
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SECTION 2.6. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.7. Title to Trust Property.
(a) Legal title to all Trust Property shall be vested at all
times in the Property Trustee and shall be held and administered by the Property
Trustee in trust for the benefit of the Trust and the Holders in accordance with
this Trust Agreement.
(b) The Holders shall not have any right or title to the Trust
Property other than the undivided beneficial interest in the assets of the Trust
conferred by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust except as
described below. The "Trust Securities shall be personal property giving only
the rights specifically set forth therein and in this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT; PAYING AGENTS
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and the Paying Agent
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Holders and for Distribution as herein provided.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments with respect to, the Notes. Amounts held in the Payment Account
shall not be invested by the Property Trustee pending distribution thereof
SECTION 3.2. Appointment of Paying Agents.
The Paying Agent shall initially be the Property Trustee. The
Paying Agent shall make Distributions to Holders from the Payment Account and
shall report the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account solely for the purpose of making the
Distributions referred to above. The Administrative Trustees may revoke such
power and remove the Paying Agent in their sole discretion. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon thirty (30) days'
written notice to the Administrative Trustees and the Property Trustee. If the
Property Trustee shall no longer be the Paying Agent or a successor Paying Agent
shall resign or its authority to act be revoked, the Administrative Trustees
shall appoint a successor (which shall be a bank or trust company) to act as
Paying Agent. Such successor Paying Agent appointed by the Administrative
Trustees shall execute and deliver to the Trustees an instrument in which such
successor Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent will hold all sums, if any, held by it for payment to the
Holders in trust for the benefit of the Holders entitled thereto until such sums
shall be paid to such Holders. The Paying Agent shall return all unclaimed funds
to the Property Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Property Trustee. The
provisions of Article VIII shall apply to the Property Trustee also in its role
as Paying Agent, for so long as the Property Trustee shall act as Paying Agent
and, to the extent applicable, to any other Paying Agent appointed hereunder.
Any reference in this Trust Agreement to the Paying Agent shall include any
co-paying agent unless the context requires otherwise.
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ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial
interests in the Trust Property, and Distributions (including any Additional
Interest Amounts) will be made on the Trust Securities at the rate and on the
dates that payments of interest (including any Additional Interest) are made on
the Notes. Accordingly:
(i) Distributions on the Trust Securities shall be
cumulative, and shall accumulate whether or not there are funds of the
Trust available for the payment of Distributions. Distributions shall
accumulate from September 30, 2003, and, except as provided in clause
(ii) below, shall be payable quarterly in arrears on March 3 1, June
30, September 30 and December 31 of each year, commencing on December
31, 2003. If any date on which a Distribution is otherwise payable on
the Trust Securities is not a Business Day, then the payment of such
Distribution shall be made on the next succeeding Business Day (and no
interest shall accrue in respect of the amounts whose payment is so
delayed for the period from and after each such date until the next
succeeding Business Day), except that, if such Business Day falls in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force
and effect as if made on such date (each date on which Distributions
are payable in accordance with this Section 4.l(a)(i), a "Distribution
Date");
(ii) in the event (and to the extent) that the Depositor
exercises its right under the Indenture to defer the payment of
interest on the Notes, Distributions on the Trust Securities shall be
deferred. Under the Indenture, so long as no Note Event of Default has
occurred and is continuing, the Depositor shall have the right, at any
time and from time to time during the term of the Notes, to defer the
payment of interest on the Notes for a period of up to twenty (20)
consecutive quarterly interest payment periods (each such extended
interest payment period, an "Extension Period"), during which Extension
Period no interest on the Notes shall be due and payable (except any
Additional Tax Sums that may be due and payable). No interest on the
Notes shall be due and payable during an Extension Period, except at
the end thereof, but each installment of interest that would otherwise
have been due and payable during such Extension Period shall bear
Additional Interest (to the extent payment of such interest would be
legally enforceable) at the fixed rate equal to 7.5% through the
interest payment date in September 2008 and thereafter at a variable
rate equal to LIBOR plus 4.00% per annum compounded quarterly, from the
dates on which amounts would have otherwise been due and payable until
paid or until funds for the payment thereof have been made available
for payment. If Distributions are deferred, the deferred Distributions
(including Additional Interest Amounts) shall be paid on the date that
the related Extension Period terminates, to Holders of the Trust
Securities as they appear on the books and records of the Trust on the
record date immediately preceding such termination date.
(iii) Distributions shall accumulate in respect of the
Trust Securities at a fixed rate equal to 7.5% through the interest
payment date in September 2008 and thereafter at a variable rate equal
to LIBOR plus 4.00% of the Liquidation Amount of the Trust Securities,
such rate being the rate of interest payable on the Notes. LIBOR shall
be determined by the Calculation Agent in accordance with Schedule A.
The amount of Distributions payable for any period less than a full
Distribution period shall be computed on the basis of a 360-day year
and the actual number of days elapsed in the relevant Distribution
period. The amount of Distributions payable for any period shall
include any Additional Interest Amounts in respect of such period; and
(iv) Distributions on the Trust Securities shall be made
by the Paying Agent from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Trust has funds then
on hand and available in the Payment Account for the payment of such
Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day (whether or not a Business Day) preceding the relevant Distribution Date.
Distributions payable on any Trust Securities that are not punctually paid on
any Distribution Date as a result of the Depositor having failed to make an
interest payment under the Notes will cease to be payable to the Person in whose
name such Trust Securities are registered on the relevant record date, and such
defaulted Distributions and any Additional Interest Amounts will instead be
payable to the Person in whose name such Trust Securities are registered on the
special record date, or other specified date for determining Holders entitled to
such defaulted Distribution and Additional Interest Amount, established in the
same manner, and on the same date, as such is established with respect to the
Notes under the Indenture.
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SECTION 4.2. Redemption.
(a) On each Note Redemption Date and on the stated maturity
(or any date of principal repayment upon early maturity) of the Notes and on
each other date on (or in respect of) which any principal on the Notes is
repaid, the Trust will be required to redeem a Like Amount of Trust Securities
at the Redemption Price.
(b) Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than thirty (30)
nor more than sixty (60) days prior to the Redemption slate to each Holder of
Trust. Securities to be redeemed, at such Holder's address appearing in the
Securities Register. All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or, if the Redemption Price
cannot be calculated prior to the time the notice is required to be
sent, the estimate of the Redemption Price provided pursuant to the
Indenture, as calculated by the Depositor, together with a statement
that it is an estimate and that the actual Redemption Price will be
calculated by the Calculation Agent on the fifth Business Day prior to
the Redemption Date (and if an estimate is provided, a further notice
shall be sent of the actual Redemption Price on the date that such
Redemption Price is calculated):
(iii) if less than all the Outstanding Trust Securities
are to be redeemed, the identification (and, in the case of partial
redemption, the respective amounts) and Liquidation Amounts of the
particular Trust Securities to be redeemed;
(iv) that on the Redemption Date, the Redemption Price
will become due and payable upon each such Trust Security, or portion
thereof to be redeemed and that Distributions thereon will cease to
accumulate on such Trust Security or such portion, as the case may be,
on and after said date, except as provided in Section 4.2(d);
(v) the place or places where the Trust Securities are to
be surrendered for the payment of the Redemption Price; and
(vi) such other provisions as the Property Trustee deems
relevant.
(c) The Trust Securities (or portion thereof) redeemed on each
Redemption Date shall be redeemed at the Redemption Price with the proceeds from
the contemporaneous redemption or payment at maturity of Notes. Redemptions of
the Trust Securities (or portion thereof) shall be made and the Redemption Price
shall be payable on each Redemption Date only to the extent that the Trust has
funds then on hand and available in the Payment Account for the payment of such
Redemption Price. Under the Indenture, the Notes may be redeemed by the
Depositor on any Interest Payment Date, at the Depositor's option, on or after
September 30, 2008, in whole or in part, from time to time at the Optional Note
Redemption Price; provided, that the Depositor shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required. The
Notes may also be redeemed by the Depositor, at its option pursuant to the terms
of the Indenture, in whole but not in part, upon the occurrence and during the
continuation of an Investment Company Event or a Tax Event, at the Special Note
Redemption Price; provided, that the Depositor shall have received the prior
approval of any Applicable Insurance Regulatory Authority then required.
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(d) If the Property Trustee gives a notice of redemption in
respect of any Preferred Securities, then by 10:00 A.M., New York City time, on
the Redemption Date, the Depositor shall deposit sufficient funds with the
Property Trustee to pay the Redemption Price. If such deposit has been made by
such time, then by 12:00 noon, New York City time, on the Redemption Date, the
Property Trustee will, with respect to Book-Entry Preferred Securities,
irrevocably deposit with the Depositary for such Book-Entry Preferred
Securities, to the extent available therefor, funds sufficient to pay the
applicable Redemption Price and will give such Depositary irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities. With respect to Preferred Securities that are not
Book-Entry Preferred Securities, the Property Trustee will irrevocably deposit
with the Paying Agent, to the extent available therefor, funds sufficient to pay
the applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities (or portion thereof) called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Securities Register on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required. then upon the date of such deposit, all rights of Holders
holding Trust Securities (or portion thereof) so called for redemption will
cease, except the right of such Holders to receive the Redemption Price and any
Distribution payable in respect of the Trust Securities on or prior to the
Redemption Date, but without interest, and, in the case of a partial redemption,
the right of such Holders to receive a new Trust Security or Securities of
authorized denominations, in aggregate Liquidation Amount equal to the
unredeemed portion of such Trust Security or Securities, and such Securities (or
portion thereof) called for redemption will cease to be Outstanding. In the
event that any date on which any Redemption Price is payable is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding Business Day (and no interest shall accrue in respect of the
amounts whose payment is so delayed for the period from and after each such date
until the next succeeding Business Day), except that, if such Business Day falls
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case, with the same force and effect
as if made on such date. In the event that payment of the Redemption Price in
respect of any Trust Securities (or portion thereof) called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee Agreement, Distributions on such Trust
Securities (or portion thereof) will continue to accumulate, as set forth in
Section 4.1, from the Redemption Date originally established by the Trust for
such Trust Securities (or portion thereof) to the date such Redemption Price is
actually paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
(e) Subject to Section 4.3(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of Trust Securities to be redeemed shall be
allocated pro rata to the Common Securities and the Preferred Securities based
upon the relative aggregate Liquidation Amounts of the Common Securities and the
Preferred Securities. The Preferred Securities to be redeemed shall be selected
on a pro rata basis based upon their respective Liquidation Amounts not more
than sixty (60) days prior to the Redemption Date by the Property Trustee from
the Outstanding Preferred Securities not previously called for redemption;
provided, that with respect to Holders that would be required to hold less than
one hundred (100) but more than zero (0) Trust Securities as a result of such
redemption, the Trust shall redeem F rust Securities of each such Holder so that
after such redemption such Holder shall hold either one hundred (100) Trust
Securities or such Holder no longer holds any Trust Securities, and shall use
such method (including, without limitation, by lot) as the Trust shall deem fair
and appropriate; and provided, further, that so long as the Preferred Securities
are Book-Entry Preferred Securities, such selection shall be made in accordance
with the Applicable Depositary Procedures for the Preferred Securities by such
Depositary. The Property Trustee shall promptly notify the Securities Registrar
in writing of the Preferred Securities (or portion thereof) selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the aggregate Liquidation Amount of Preferred Securities that has been or is
to be redeemed.
(f) The Trust in issuing the Trust Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall
indicate the "CUSIP" numbers of the Trust Securities in notices of redemption
and related materials as a convenience to Holders; provided, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Trust Securities or as contained in any notice
of redemption and related materials.
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SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional
Interest Amounts) on, the Redemption Price of and the Liquidation Distribution
in respect of, the Trust Securities, as applicable, shall be made, pro rata
among the Common Securities and the Preferred Securities based on the
Liquidation Amount of the respective Trust Securities; provided, that if on any
Distribution Date, Redemption Date or Liquidation Date an Event of Default shall
have occurred and be continuing, no payment of any Distribution (including any
Additional Interest Amounts) on, Redemption Price of or Liquidation Distribution
in respect of, any Common Security, and no other payment on account of the
redemption, liquidation or other acquisition of Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions
(including any Additional Interest Amounts) on all Outstanding Preferred
Securities for all Distribution periods terminating, on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Preferred Securities then called for redemption, or in
the case of payment of the Liquidation Distribution the full amount of such
Liquidation Distribution on all Outstanding Preferred Securities, shall have
been made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Interest Amounts) on, or the Redemption
Price of or the Liquidation Distribution in respect of, the Preferred Securities
then due and payable.
(b) In the case of the occurrence of any Event of Default, the
Holders of the Common Securities shall have no right to act with respect to any
such Event of Default under this Trust Agreement until all such Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until all such Events of Default under this Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not on behalf of the Holders of the
Common Securities, and only the Holders of all the Preferred Securities will
have the right to direct the Property Trustee to act on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including any Additional Interest
Amounts), the Redemption Price, Liquidation Amount or any other amounts in
respect of the Preferred Securities shall be made by wire transfer at such place
and to such account at a banking institution in the United States as may be
designated in writing at least ten (10) Business Days prior to the date for
payment by the Person entitled thereto unless proper written transfer
instructions have not been received by the relevant record date, in which case
such payments shall be made by check mailed to the address of such Person as
such address shall appear in the Securities Register. If any Preferred
Securities are held by a Depositary, such Distributions thereon shall be made to
the Depositary in immediately available funds. Payments in respect of the Common
Securities shall be made in such manner as shall be mutually agreed between the
Property Trustee and the Holder of all the Common Securities.
SECTION 4.5. Withholding Tax.
The Trust and the Administrative Trustees shall comply with
all withholding and backup withholding tax requirements under United States
federal, state and local law. The Administrative Trustees on behalf of the Trust
shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding and
backup withholding tax with respect to each Holder and any representations and
forms as shall reasonably be requested by the Administrative Trustees on behalf
of the Trust to assist it in determining the extent of, and in fulfilling, its
withholding and backup withholding tax obligations. The Administrative Trustees
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding and backup withholding tax is properly established by a Holder,
shall remit amounts withheld with respect to the Holder to applicable
jurisdictions. To the extent that the Trust is required to withhold and pay over
any amounts to any jurisdiction with respect to Distributions or allocations to
any Holder, the amount withheld shall be deemed to be a Distribution in the
amount of the withholding to the Holder. In the event of any claimed
overwithholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from actual
Distributions made, the Administrative Trustees on behalf of the Trust may
reduce subsequent Distributions by the amount of such required withholding.
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SECTION 4.6. Tax Returns and Other Reports.
(a) The Administrative Trustees shall prepare (or cause to be
prepared) at the principal office of the Trust in the United States, as defined
for purposes of Treasury regulations section 301.7701-7, at the Depositor's
expense, and file, all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. The Administrative Trustees shall prepare at the principal office of the
Trust in the United States, as defined for purposes of Treasury regulations
section 301.7701-7, and furnish (or cause to be prepared and furnished), by
January 31 in each taxable year of the Trust to each Holder all Internal Revenue
Service forms and returns required to be provided by the Trust. The
Administrative Trustees shall provide the Depositor, Dekania Capital Management,
LLC and the Property Trustee with a copy of all such returns and reports
promptly after such filing or furnishing.
(b) So long as the Property Trustee for the benefit of the
Trust is the holder of the Notes, the Administrative Trustees will cause any
Statutory Financial Statements to be delivered to the Property Trustee and to
each Holder and Dekania Capital Management, LLC promptly following the filing of
each such document with the relevant Applicable Insurance Regulatory Authority.
The delivery requirement set forth in the preceding sentence may be satisfied by
submitting the required Statutory Financial Statements pursuant to Section
8.16(b) hereof.
SECTION 4.7. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Notes of Additional Tax Sums and upon
the written direction of the Administrative Trustees, the Property Trustee shall
promptly pay, solely out of monies on deposit pursuant to this Trust Agreement,
any Additional Taxes imposed on the Trust by the United States or any other
taxing authority.
SECTION 4.8. Payments under Indenture or Pursuant to Direct
Actions.
Any amount payable hereunder to any Holder of Preferred
Securities shall be reduced by the amount of any corresponding payment such
Holder (or any Owner with respect thereto) has directly received pursuant to
Section 5.8 of the Indenture or Section 6.10(b) of this Trust Agreement.
SECTION 4.9. Exchanges.
(a) If at any time the Depositor or any of its Affiliates (in
either case, a "Depositor Affiliate") is the Owner or Holder of any Preferred
Securities, such Depositor Affiliate shall have the right to deliver to the
Property Trustee all or such portion of its Preferred Securities as it elects
and, subject to compliance with Sections 2.2 and 3.5 of the Indenture, receive,
in exchange therefor, a like Amount of Notes. Such election shall be exercisable
effective on any Distribution Date by such Depositor Affiliate delivering to the
Property Trustee (i) at least ten (10) Business Days prior to the Distribution
Date on which such exchange is to occur, the registration instructions and the
documentation, if any, required pursuant to Sections 2.2 and 3.5 of the
Indenture to enable the Indenture Trustee to issue the requested Like Amount of
Notes, (ii) a written notice of such election specifying the Liquidation Amount
of Preferred Securities with respect to which such election is being made and
the Distribution Date on which such exchange shall occur, which Distribution
Date shall be not less than ten (10) Business Days after the date of receipt by
the Property Trustee of such election notice and (iii) shall be conditioned upon
such Depositor Affiliate having delivered or caused to be delivered to the
Property Trustee or its designee the Preferred Securities that are the subject
of such election by 10:00 A.M. New York time, on the Distribution Date on which
such exchange is to occur. After the exchange, such Preferred Securities will be
canceled and will no longer be deemed to be Outstanding and all rights of the
Depositor Affiliate with respect to such Preferred Securities will cease.
(b) In the case of an exchange described in Section 4.9(a),
the Property Trustee on behalf of the Trust will, on the date of such exchange,
exchange Notes having a principal amount equal to a proportional amount of the
aggregate Liquidation Amount of the Outstanding Common Securities, based on the
ratio of the aggregate Liquidation Amount of the Preferred Securities exchanged
pursuant to Section 4.9(a) divided by the aggregate Liquidation Amount of the
Preferred Securities Outstanding immediately prior to such exchange, for such
proportional amount of Common Securities held by the Depositor (which
contemporaneously shall be canceled and no longer be deemed to be Outstanding);
provided, that the Depositor delivers or causes to be delivered to the Property
Trustee or its designee the required amount of Common Securities to be exchanged
by 10:00 A.M. New York time, on the Distribution Date on which such exchange is
to occur.
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SECTION 4.10. Calculation Agent.
(a) The Property Trustee shall initially, and, subject to the
immediately following sentence, for so long as it holds any of the Notes, be the
Calculation Agent for purposes of determining LIBOR for each Distribution Date.
The Calculation Agent may be removed by the Administrative Trustees at any time.
If the Calculation Agent is unable or unwilling to act as such or is removed by
the Administrative Trustees, the Administrative Trustees will promptly appoint
as a replacement Calculation Agent the London office of a leading bank which is
engaged in transactions in six-month Eurodollar deposits in the international
Eurodollar market and which does not control or is not controlled by or under
common control with the Administrative Trustee or its Affiliates. The
Calculation Agent may not resign its duties without a successor having been duly
appointed.
(b) The Calculation Agent shall be required to agree that, as
soon as possible after 11:00 a.m. (London time) on each LIBOR Determination
Date, but in no event later than 11:00 a.m. (London time) on the Business Day
immediately following each LIBOR Determination Date, the Calculation Agent will
calculate the interest rate (rounded to the nearest cent, with half a cent being
rounded upwards) for the related Distribution Date, and will communicate such
rate and amount to the Depositor, the Administrative Trustees, the Note Trustee,
each Paying Agent and the Depositary. The Calculation Agent will also specify to
the Administrative Trustee the quotations upon which the foregoing rates and
amounts are based and, in any event, the Calculation Agent shall notify the
Administrative Trustee before 5:00 p.m. (London time) on each LIBOR
Determination Date that either: (i) it has determined or is in the process of
determining the foregoing rates and amounts or (ii) it has not determined and is
not in the process of determining the foregoing rates and amounts, together with
its reasons therefor. The Calculation Agent's determination of the foregoing
rates and amounts for any Distribution Date will (in the absence of manifest
error) be final and binding upon all parties. For the sole purpose of
calculating the interest rate for the Trust Securities, "Business Day" shall be
defined as any day on which dealings in deposits in Dollars are transacted in
the London interbank market.
SECTION 4.11. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept at the principal office
of the Trust in the United States, as defined for purposes of Treasury
Regulations section 301.7701-7, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied.
(b) The Administrative Trustees shall either (i) if the
Depositor is then subject to such reporting requirements, cause each Form I0-K
and Form 10-Q prepared by the Depositor and filed with the Commission in
accordance with the Exchange Act to be delivered to each Holder, with a copy to
the Property Trustee, within thirty (30) days after the filing thereof or (ii)
cause to be prepared at the principal office of the Trust in the United States,
as defined for purposes of Treasury Regulations section 301.7701-7, and
delivered to each of the Holders, with a copy to the Property Trustee, within
ninety (90) days after the end of each Fiscal Year, annual financial statements
of the Trust, including a balance sheet of the Trust as of the end of such
Fiscal Year, and the related statements of income or loss.
(c) If the Depositor intends to file its annual and quarterly
information with the Commission in electronic form pursuant to Regulation S-T of
the Commission using the Commission's Electronic Data Gathering, Analysis and
Retrieval ("▇▇▇▇▇") system, the Administrative Trustees shall notify the
Property Trustee in the manner prescribed herein of each such annual and
quarterly filing. The Property Trustee is hereby authorized and directed to
access the ▇▇▇▇▇ system for purposes of retrieving the financial information so
filed. Compliance with the foregoing shall constitute delivery by the
Administrative Trustees of its financial statements to the Property Trustee in
compliance with the provisions of Section 314(a) of the Trust Indenture Act, if
applicable. The Property Trustee shall have no duty to search for or obtain any
electronic or other filings that the Depositor makes with the Commission,
regardless of whether such filings are periodic, supplemental or otherwise.
Delivery of reports, information and documents to the Property Trustee pursuant
to this Section 4.11(c) shall be solely for purposes of compliance with this
Section 4.11 and, if applicable, with Section 314(a) of the Trust Indenture Act.
The Property Trustee's receipt of such reports, information and documents shall
not constitute notice to it of the content thereof or any matter determinable
from the content thereof, including the Company's compliance with any of its
covenants hereunder, as to which the Property Trustee is entitled to rely upon
Officers' Certificates.
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(d) The Trust shall maintain one or more bank accounts in the
United States, as defined for purposes of Treasury Regulations section
301.7701-7, in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Notes held by the Property
Trustee shall be made directly to the Payment Account and no other funds of the
Trust shall be deposited in the Payment Account. The sole signatories for such
accounts (including the Payment Account) shall be designated by the Property
Trustee.
ARTICLE V.
SECURITIES
SECTION 5.1. Initial Ownership.
Upon the creation of the Trust and the contribution by the
Depositor referred to in Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are Outstanding,
the Depositor shall be the sole beneficial owner of the Trust.
SECTION 5.2. Authorized Trust Securities.
The Trust shall be authorized to issue one series of Preferred
Securities having an aggregate Liquidation Amount of $10,000,000 and one series
of Common Securities having an aggregate Liquidation Amount of $310,000.
SECTION 5.3. Issuance of the Common Securities; Subscription
and Purchase of Notes.
On the Closing Date, an Administrative Trustee, on behalf of
the Trust, shall execute and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, evidencing an aggregate
of 310 Common Securities having an aggregate Liquidation Amount of Three Hundred
Ten Thousand Dollars ($310,000), against receipt by the Trust of the aggregate
purchase price of such Common Securities of Three Hundred Ten Thousand Dollars
($310,000). Contemporaneously therewith and with the sale by the Trust to the
Holders of an aggregate of 10,000 Preferred Securities having an aggregate
Liquidation Amount of Ten Million Dollars ($10,000,000), an Administrative
Trustee, on behalf of the Trust, shall purchase from the Depositor Notes, to be
registered in the name of the Property Trustee on behalf of the Trust and having
an aggregate principal amount equal to Ten Million Dollars ($10,000,000), and,
in satisfaction of the purchase price for such Notes, the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the sure of Ten Million
Dollars ($10,000,000) (being the aggregate amount paid by the Holders for the
Preferred Securities, and the amount paid by the Depositor for the Common
Securities).
SECTION 5.4. The Securities Certificates.
(a) The Preferred Securities Certificates shall be issued in
minimum denominations of $100,000 Liquidation Amount and integral multiples of
$1,000 in excess thereof, and the Common Securities Certificates shall be issued
in minimum denominations of $10,000 Liquidation Amount and integral multiples of
$1,000 in excess thereof. The Securities Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of at least one
Administrative Trustee. Securities Certificates bearing the signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign such Securities Certificates on behalf of the Trust shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Securities Certificates or did not have
such authority at the date of delivery of such Securities Certificates.
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(b) On the Closing Date, upon the written order of an
authorized officer of the Depositor, the Administrative Trustees shall cause
Securities Certificates to be executed on behalf of the Trust and delivered,
without further corporate action by the Depositor, in authorized denominations.
(c) The Preferred Securities issued to QIBs shall be, except
as provided in Section 5.6, Book-Entry Preferred Securities issued in the form
of one or more Global Preferred Securities registered in the name of the
Depositary, or its nominee and deposited with the Depositary or a custodian for
the Depositary for credit by the Depositary to the respective accounts of the
Depositary Participants thereof (or such other accounts as they may direct). The
Preferred Securities issued to a Person other than a QIB shall be issued in the
form of Definitive Preferred Securities Certificates.
(d) A Preferred Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the Property
Trustee. Such signature shall be conclusive evidence that the Preferred Security
has been authenticated under this Trust Agreement. Upon written order of the
Trust signed by one Administrative Trustee, the Property Trustee shall
authenticate the Preferred Securities for original issue. The Property Trustee
may appoint an authenticating agent that is a U.S. Person acceptable to the
Trust to authenticate the Preferred Securities. A Common Security need not be so
authenticated and shall be valid upon execution by one or more Administrative
Trustees. The form of this certificate of authentication can be found in Section
5.13.
SECTION 5.5. Rights of Holders.
The Trust Securities shall have no preemptive or similar
rights and when issued and delivered to holders against payment of the purchase
price therefor will be fully paid and nonassessable by the Trust. Except as
provided in Section 5.11 (b), the Holders of the Trust Securities, in their
capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
SECTION 5.6. Book-Entry Preferred Securities.
(a) A Global Preferred Security may be exchanged, in whole or
in part, for Definitive Preferred Securities Certificates registered in the
names of the Owners only if such exchange complies with Section 5.7 and (i) the
Depositary advises the Administrative Trustees and the Property Trustee in
writing that the Depositary is no longer willing or able properly to discharge
its responsibilities with respect to the Global Preferred Security, and no
qualified successor is appointed by the Administrative Trustees within ninety
(90) days of receipt of such notice, (ii) the Depositary ceases to be a clearing
agency registered under the Exchange Act and the Administrative Trustees fail to
appoint a qualified successor within ninety (90) days of obtaining knowledge of
such event, (iii) the Administrative Trustees at their option advise the
Property Trustee in writing that the Trust elects to terminate the book-entry
system through the Depositary or (iv) a Note Event of Default has occurred and
is continuing. Upon the occurrence of any event specified in clause (i), (ii),
(iii) or (iv) above, the Administrative Trustees shall notify the Depositary and
instruct the Depositary to notify all Owners of Book-Entry Preferred Securities,
the Delaware Trustee and the Property Trustee of the occurrence of such event
and of the availability of the Definitive Preferred Securities Certificates to
Owners of the Preferred Securities requesting the same. Upon the issuance of
Definitive Preferred Securities Certificates, the Trustees shall recognize the
Holders of the Definitive Preferred Securities Certificates as Holders.
Notwithstanding the foregoing, if an Owner of a beneficial interest in a Global
Preferred Security wishes at any time to transfer an interest in such Global
Preferred Security to a Person other than a QIB, such transfer shall be
effected, subject to the Applicable Depositary Procedures, in accordance with
the provisions of this Section 5.6 and Section 5.7, and the transferee shall
receive a Definitive Preferred Securities Certificate in connection with such
transfer. A holder of a Definitive Preferred Securities Certificate that is a
QIB may, upon request and in accordance with the provisions of this Section 5.6
and Section 5.7, exchange such Definitive Preferred Securities Certificate for a
beneficial interest in a Global Preferred Security.
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(b) If any Global Preferred Security is to be exchanged for
Definitive Preferred Securities Certificates or canceled in part, or if any
Definitive Preferred Securities Certificate is to be exchanged in whole or in
part for any Global Preferred Security, then either (i) such Global Preferred
Security shall be so surrendered for exchange or cancellation as provided in
this Article V or (ii) the aggregate Liquidation Amount represented by such
Global Preferred Security shall be reduced, subject to Section 5.4, or increased
by an amount equal to the Liquidation Amount represented by that portion of the
Global Preferred Security to be so exchanged or canceled, or equal to the
Liquidation Amount represented by such Definitive Preferred Securities
Certificates to be so exchanged for any Global Preferred Security, as the case
may be, by means of an appropriate adjustment made on the records of the
Securities Registrar, whereupon the Property Trustee, in accordance with the
Applicable Depositary Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender to the Administrative Trustees or the Securities
Registrar of any Global Preferred Security or Securities by the Depositary,
accompanied by registration instructions, the Administrative Trustees, or any
one of them, shall execute the Definitive Preferred Securities Certificates in
accordance with the instructions of the Depositary. None of the Securities
Registrar or the Trustees shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be fully protected in
relying on, such instructions.
(c) Every Definitive Preferred Securities Certificate executed
and delivered upon registration or transfer of, or in exchange for or in lieu
of, a Global Preferred Security or any portion thereof shall be executed and
delivered in the form of, and shall be, a Global Preferred Security, unless such
Definitive Preferred Securities Certificate is registered in the name of a
Person other than the Depositary for such Global Preferred Security or a nominee
thereof.
(d) The Depositary or its nominee, as registered owner of a
Global Preferred Security, shall be the Holder of such Global Preferred Security
for all purposes under this Trust Agreement and the Global Preferred Security,
and Owners with respect to a Global Preferred Security shall hold such interests
pursuant to the Applicable Depositary Procedures. The Securities Registrar and
the Trustees shall be entitled to deal with the Depositary for all purposes of
this Trust Agreement relating to the Global Preferred Securities (including the
payment of the Liquidation Amount of and Distributions on the Book-Entry
Preferred Securities represented thereby and the giving of instructions or
directions by Owners of Book-Entry Preferred Securities represented thereby and
the giving of notices) as the sole Holder of the Book-Entry Preferred Securities
represented thereby and shall have no obligations to the Owners thereof. None of
the Trustees nor the Securities Registrar shall have any liability in respect of
any transfers effected by the Depositary.
(e) The rights of the Owners of the Book-Entry Preferred
Securities shall be exercised only through the Depositary and shall be limited
to those established by law, the Applicable Depositary Procedures and agreements
between such Owners and the Depositary and/or the Depositary Participants;
provided, solely for the purpose of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided for
in this Trust Agreement, to the extent that Preferred Securities are represented
by a Global Preferred Security, the Trustees may conclusively rely on, and shall
be fully protected in relying on, any written instrument (including a proxy)
delivered to the Property Trustee by the Depositary setting forth the Owners'
votes or assigning the right to vote on any matter to any other Persons either
in whole or in part. To the extent that Preferred Securities are represented by
a Global Preferred Security, the initial Depositary will make book-entry
transfers among the Depositary Participants and receive and transmit payments on
the Preferred Securities that are represented by a Global Preferred Security to
such Depositary Participants, and none of the Depositor or the Trustees shall
have any responsibility or obligation with respect thereto.
(f) To the extent that a notice or other communication to the
Holders is required under this Trust Agreement, for so long as Preferred
Securities are represented by a Global Preferred Security, the Trustees shall
give all such notices and communications to the Depositary, and shall have no
obligations to the Owners.
SECTION 5.7. Registration of Transfer and Exchange of
Preferred Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept, at
the Corporate Trust Office, a register or registers (the "Securities Register")
in which the registrar and transfer agent with respect to the Trust Securities
(the "Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Preferred Securities
Certificates and Common Securities Certificates and registration of transfers
and exchanges of Preferred Securities Certificates as herein provided. The
Person acting as the Property Trustee shall at all times also be the Securities
Registrar. The provisions of Article VIII shall apply to the Property Trustee in
its role as Securities Registrar.
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(b) Subject to Section 5.7(d), upon surrender for registration
of transfer of any Preferred Securities Certificate at the office or agency
maintained pursuant to Section 5.7(f), the Administrative Trustees or any one of
them shall execute by manual or facsimile signature and deliver to the Property
Trustee, and the Property Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
as may be required by this Trust Agreement dated the date of execution by such
Administrative Trustee or Trustees. At the option of a Holder, Preferred
Securities Certificates may be exchanged for other Preferred Securities
Certificates in authorized denominations and of a like aggregate Liquidation
Amount upon surrender of the Preferred Securities Certificate to be exchanged at
the office or agency maintained pursuant to Section 5.7(f). Whenever any
Preferred Securities Certificates are so surrendered for exchange, the
Administrative Trustees or any one of them shall execute by manual or facsimile
signature and deliver to the Property Trustee, and the Property Trustee shall
authenticate and deliver, the Preferred Securities Certificates that the Holder
making the exchange is entitled to receive.
(c) The Securities Registrar shall not be required, (i) to
issue, register the transfer of or exchange any Preferred Security during a
period beginning at the opening of business fifteen (15) days before the day of
selection for redemption of such Preferred Securities pursuant to Article IV 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 Preferred
Security so selected for redemption in whole or in part, except, in the case of
any such Preferred Security to be redeemed in part, any portion thereof not to
be redeemed.
(d) Every Preferred Securities Certificate presented or
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Securities Registrar duly executed by the Holder or such Holder's attorney duly
authorized in writing and (i) if such Preferred Securities Certificate is being
transferred to a QIB, accompanied by a certificate of the transferor
substantially in the form set forth as Exhibit E hereto or (ii) if such
Preferred Securities Certificate is being transferred otherwise than to a QIB,
accompanied by a certificate of the transferee substantially in the form set
forth as Exhibit F hereto.
(e) No service charge shall be made for any registration of
transfer or exchange of Preferred Securities Certificates, but the Property
Trustee on behalf of the Trust 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 Preferred Securities Certificates.
(f) The Administrative Trustees shall designate an office or
offices or agency or agencies where Preferred Securities Certificates may be
surrendered for registration of transfer or exchange. The Depositor initially
designates the Corporate Trust Office as its office and agency for such
purposes. The Administrative Trustees shall give prompt written notice to the
Depositor, the Property Trustee and to the Holders of any change in the location
of any such office or agency.
SECTION 5.8. Mutilated, Destroyed, Lost or Stolen Securities
Certificates.
(a) If any mutilated Securities Certificate shall be
surrendered to the Securities Registrar together with such security or indemnity
as may be required by the Securities Registrar to save each of the Trustees
harmless, the Administrative Trustees, or any one of them, on behalf of the
Trust, shall execute and make available for delivery in exchange therefor a new
Securities Certificate of like class, tenor and denomination.
(b) If the Securities Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Securities Certificate and
there shall be delivered to the Securities Registrar such security or indemnity
as may be required by it to save each of the Trustees harmless, then in the
absence of notice that such Securities Certificate shall have been acquired by a
protected purchaser, the Administrative Trustees, or any one of them, on behalf
of the Trust, shall execute and make available for delivery, and, with respect
to Preferred Securities, the Property Trustee shall authenticate, in exchange
for or in lieu of any such destroyed, lost or stolen Securities Certificate, a
new Securities Certificate of like class, tenor and denomination.
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(c) In connection with the issuance of any new Securities
Certificate under this Section 5.8, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
(d) Any duplicate Securities Certificate issued pursuant to
this Section 5.8 shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Trust corresponding to that evidenced by the
mutilated, lost, stolen or destroyed Securities Certificate, as if originally
issued, whether or not the lost, stolen or destroyed Securities Certificate
shall be found at any time.
(e) If any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Depositor in its
discretion may, instead of issuing a new Security, pay such Security.
(f) The provisions of this Section 5.8 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement of mutilated, destroyed, lost or stolen Securities Certificates.
SECTION 5.9. Persons Deemed Holders.
The Trustees and the Securities Registrar shall each treat the
Person in whose name any Securities Certificate shall be registered in the
Securities Register as the owner of such Securities Certificate for the purpose
of receiving Distributions and for all other purposes whatsoever, and none of
the Trustees and the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.10. Cancellation.
All Preferred Securities Certificates surrendered for
registration of transfer or exchange or for payment shall, if surrendered to any
Person other than the Property Trustee, be delivered to the Property Trustee,
and any such Preferred Securities Certificates and Preferred Securities
Certificates surrendered directly to the Property Trustee for any such purpose
shall be promptly canceled by it. The Administrative Trustees may at any time
deliver to the Property Trustee for cancellation any Preferred Securities
Certificates previously delivered hereunder that the Administrative Trustees may
have acquired in any manner whatsoever, and all Preferred Securities
Certificates so delivered shall be promptly canceled by the Property Trustee. No
Preferred Securities Certificates shall be executed and delivered in lieu of or
in exchange for any Preferred Securities Certificates canceled as provided in
this Section 5.10, except as expressly permitted by this Trust Agreement. All
canceled Preferred Securities Certificates shall be retained by the Property
Trustee in accordance with its customary practices.
SECTION 5.11. Ownership of Common Securities by Depositor.
(a) On the Closing Date, the Depositor shall acquire, and
thereafter shall retain, beneficial and record ownership of the Common
Securities. Neither the Depositor nor any successor Holder of the Common
Securities may transfer less than all the Common Securities, and the Depositor
or any such successor Holder may transfer the Common Securities only (i) in
connection with a consolidation or merger of the Depositor into another Person,
or any conveyance, transfer or lease by the Depositor of its properties and
assets substantially as an entirety to any Person (in which event such Common
Securities will be transferred to such surviving entity, transferee or lessee,
as the case may be), pursuant to Section 8.1 of the Indenture or (ii) to the
Depositor or an Affiliate of the Depositor, in each such case in compliance with
applicable law (including the Securities Act, and applicable state securities
and blue sky laws). To the fullest extent permitted by law, any attempted
transfer of the Common Securities other than as set forth in the immediately
preceding sentence shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating substantially "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE
WITH APPLICABLE LAW AND SECTION 5.11 OF THE TRUST AGREEMENT."
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(b) Any Holder of the Common Securities shall be liable for
the debts and obligations of the Trust in the manner and to the extent set forth
with respect to the Depositor and agrees that it shall be subject to all
liabilities to which the Depositor may be subject and, prior to becoming such a
Holder, shall deliver to the Administrative Trustees an instrument of assumption
satisfactory to such Trustees.
SECTION 5.12. Restricted Legends.
(a) Each Preferred Security Certificate shall bear a legend in
substantially the following form:
"[IF THIS SECURITY IS A GLOBAL SECURITY INSERT: THIS PREFERRED
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE TRUST
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY ("DTC") OR A NOMINEE OF
DTC. THIS PREFERRED SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
TRUST AGREEMENT, AND NO TRANSFER OF THIS PREFERRED SECURITY
(OTHER THAN A TRANSFER OF THIS PREFERRED SECURITY AS A WHOLE
BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR
ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC TO TOWER GROUP STATUTORY TRUST II OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
THE PREFERRED SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND SUCH PREFERRED SECURITIES OR ANY INTEREST THEREIN,
MAY NOT BE OFFERED, SOLD OR OTHERWISE -TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF ANY PREFERRED SECURITIES IS
HEREBY NOTIFIED THAT THE SELLER OF THE PREFERRED SECURITIES
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A UNDER THE
SECURITIES ACT.
THE HOLDER OF THE PREFERRED SECURITIES REPRESENTED BY THIS
CERTIFICATE AGREES FOR THE BENEFIT OF THE TRUST AND THE
DEPOSITOR THAT (A) SUCH PREFERRED SECURITIES MAY BE OFFERED,
RESOLD OR OTHERWISE TRANSFERRED ONLY (I) TO THE TRUST, (II) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (III) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2),(3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (IV) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR (V) PURSUANT TO AN EXEMPTION FROM THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND, IN THE CASE OF (III) OR (V), SUBJECT TO THE
RIGHT OF THE TRUST AND THE DEPOSITOR TO REQUIRE AN OPINION OF
COUNSEL AND OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND
(B) THE HOLDER WILL NOTIFY ANY PURCHASER OF ANY PREFERRED
SECURITIES FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE.
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THE PREFERRED SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED
ONLY IN BLOCKS HAVING AN AGGREGATE LIQUIDATION AMOUNT OF NOT
LESS THAN $100,000. ANY ATTEMPTED TRANSFER OF PREFERRED
SECURITIES, OR ANY INTEREST THEREIN, IN A BLOCK HAVING AN
AGGREGATE LIQUIDATION AMOUNT OF LESS THAN $100,000 AND
MULTIPLES OF $1,000 IN EXCESS THEREOF SHALL BE DEEMED TO BE
VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH
PREFERRED SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT
LIMITED TO, THE RECEIPT OF PRINCIPAL OF OR INTEREST ON SUCH
PREFERRED SECURITIES; OR ANY INTEREST THEREIN, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH PREFERRED SECURITIES.
THE HOLDER OF THIS SECURITY, OR ANY INTEREST THEREIN, BY ITS
ACCEPTANCE HEREOF OR THEREOF ALSO AGREES, REPRESENTS AND
WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH A "PLAN"),
OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY
REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY, AND NO PERSON
INVESTING "PLAN ASSETS" OF ANY PLAN MAY ACQUIRE OR HOLD THIS
PREFERRED SECURITY OR ANY INTEREST THEREIN. ANY PURCHASER OR
HOLDER OF THE PREFERRED SECURITIES OR ANY INTEREST THEREIN
WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
THEREOF THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE
MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION
4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON
ACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY
OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEE
BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE.
THIS OBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES,
INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE
"FDIC"),"
(b) The above legend shall not be removed from any of the
Preferred Securities Certificates unless there is delivered to the Property
Trustee and the Depositor satisfactory evidence, which may include an opinion of
counsel, as may be reasonably required to ensure that any future transfers
thereof may be made without restriction under the provisions of the Securities
Act and other applicable law. Upon provision of such satisfactory evidence, one
or more of the Administrative Trustees on behalf of the Trust shall execute and
deliver to the Property Trustee, and the Property Trustee shall deliver, at the
written direction of the Administrative Trustees and the Depositor, Preferred
Securities Certificates that do not bear the legend.
SECTION 5.13. Form of Certificate of Authentication.
The Property Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Preferred Securities referred to in the
within-mentioned Trust Agreement.
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Dated: JPMORGAN CHASE BANK, not in its individual
capacity, but solely as Property Trustee
By:
------------------------------------
Authorized signatory
ARTICLE VI.
MEETINGS; VOTING; ACTS OF HOLDERS
SECTION 6.1. Notice of Meetings.
Notice of all meetings of the Holders of the Preferred
Securities, stating the time, place and purpose of the meeting, shall be given
by the Property Trustee pursuant to Section 10.8 to each Holder of Preferred
Securities, at such Holder's registered address, at least fifteen (15) days and
not more than ninety (90) days before the meeting. At any such meeting, any
business properly before the meeting may be so considered whether or not stated
in the notice of the meeting. Any adjourned meeting may be held as adjourned
without further notice.
SECTION 6.2. Meetings of Holders of the Preferred Securities.
(a) No annual meeting of Holders is required to be held. The
Property Trustee, however, shall call a meeting of the Holders of the Preferred
Securities to vote on any matter upon the written request of the Holders of at
least twenty five percent (25%) in aggregate Liquidation Amount of the
Outstanding Preferred Securities and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of the Holders of
the Preferred Securities to vote on any matters as to which such Holders are
entitled to vote.
(b) The Holders of at least a Majority in Liquidation Amount
of the Preferred Securities, present in person or by proxy, shall constitute a
quorum at any meeting of the Holders of the Preferred Securities.
(c) If a quorum is present at a meeting, an affirmative vote
by the holders present, in person or by proxy, holding Preferred Securities
representing at least a Majority in Liquidation Amount of the Preferred
Securities held by the Holders present, either in person or by proxy, at such
meeting shall constitute the action of the Holders of the Preferred Securities,
unless this Trust Agreement requires a lesser or greater number of affirmative
votes.
SECTION 6.3. Voting Rights.
Holders shall be entitled to one vote for each $10,000 of
Liquidation Amount represented by their Outstanding Trust Securities in respect
of any matter as to which such Holders are entitled to vote.
SECTION 6.4. Proxies, Etc.
At any meeting of Holders, any Holder entitled to vote thereat
may vote by proxy, provided, that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Administrative Trustees, or with such
other officer or agent of the Trust as the Administrative Trustees may direct,
for verification prior to the time at which such vote shall be taken. Pursuant
to a resolution of the Property Trustee, proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Holders of record shall be entitled to vote. When Trust Securities are held
jointly by several Persons, any one of them may vote at any meeting in person or
by proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
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SECTION 6.5. Holder Action by Written Consent.
Any action that may be taken by Holders at a meeting may be
taken without a meeting and without prior notice if Holders holding at least a
Majority in Liquidation Amount of all Preferred Securities entitled to vote in
respect of such action (or such lesser or greater proportion thereof as shall be
required by any other provision of this Trust Agreement) shall consent to the
action in writing; provided, that notice of such action is promptly provided to
the Holders of Preferred Securities that did not consent to such action. Any
action that may be taken by the Holders of all the Common Securities may be
taken without a meeting and without prior notice if such Holders shall consent
to the action in writing.
SECTION 6.6. Record Date for Voting and Other Purposes.
Except as provided in Section 6.10(a), for the purposes of
determining the Holders who are entitled to notice of and to vote at any meeting
or to act by written consent, or to participate in any distribution on the Trust
Securities in respect of which a record date is not otherwise provided for in
this Trust Agreement, or for the purpose of any other action, the Administrative
Trustees may from time to time fix a date, not more than ninety (90) days prior
to the date of any meeting of Holders or the payment of a Distribution or other
action, as the case may be, as a record date for the determination of the
identity of the Holders of record for such purposes.
SECTION 6.7. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Trust Agreement to
be given, made or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by an agent thereof duly appointed in writing; and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Trust Agreement and conclusive in favor of the Trustees, if made in the manner
provided in this Section 6.7.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner that any Trustee receiving the same
deems sufficient.
(c) The ownership of Trust Securities shall be proved by the
Securities Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Trust Security shall bind
every future Holder of the same Trust Security and the Holder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees, the Administrative Trustees or the Trust in reliance
thereon, whether or not notation of such action is made upon such Trust
Security.
(e) Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
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(f) If any dispute shall arise among the Holders or the
Trustees with respect to the authenticity, validity or binding nature of any
request, demand, authorization, direction, notice, consent, waiver or other Act
of such Holder or Trustee under this Article VI, then the determination of such
matter by the Property Trustee shall be conclusive with respect to such matter.
SECTION 6.8. Inspection of Records.
Upon reasonable written notice to the Administrative Trustees
and the Property Trustee, the records of the Trust shall be open to inspection
by any Holder during normal business hours for any purpose reasonably related to
such Holder's interest as a Holder.
SECTION 6.9. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and
in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Securities Certificates, be construed so as to constitute the Holders
from time to time as partners or members of an association.
(b) So long as any Notes are held by the Property Trustee on
behalf of the Trust, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Note
Trustee, or exercise any trust or power conferred on the Property Trustee with
respect to the Notes, (ii) waive any past default that may be waived under
Section 5.13 of the Indenture or waive compliance with any covenant or condition
under Section 10.7 of the Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Notes shall be due and payable
or (iv) consent to any amendment, modification or termination of the Indenture
or the Notes, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities; provided, that where a consent
under the Indenture would require the consent of each holder of Notes (or each
Holder of Preferred Securities) affected thereby, no such consent shall be given
by the Property Trustee without the prior written consent of each Holder of
Preferred Securities. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the Preferred
Securities. In addition to obtaining the foregoing approvals of the Holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Property Trustee shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that such action shall not
cause the Trust to be taxable as a corporation or classified as other than a
grantor trust for United States federal income tax purposes.
(c) If any proposed amendment to the Trust Agreement provides
for, or the Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise or (ii) the dissolution, winding-up or termination of the
Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Trust to be taxable
as a corporation or classified as other than a grantor trust for United States
federal income tax purposes.
SECTION 6.10. Acceleration of Maturity; Rescission of
Annulment; Waivers of Past Defaults.
(a) For so long as any Preferred Securities remain
Outstanding, if, upon a Note Event of Default, the Note Trustee fails or the
holders of not less than twenty five percent (25%) in principal amount of the
outstanding Notes fail to declare the principal of all of the Notes to be
immediately due and payable, the Holders of at least twenty five percent (25%)
in Liquidation Amount of the Preferred Securities then Outstanding shall have
the right to make such declaration by a notice in writing to the Property
Trustee, the Depositor and the Note Trustee. At any time after a declaration of
acceleration with respect to the Notes has been made and before a judgment or
decree for payment of the money due has been obtained by the Note Trustee as
provided in the Indenture, the Holders of at least a Majority in Liquidation
Amount of the Preferred Securities, by written notice to the Property Trustee,
the Depositor and the Note Trustee, may rescind and annul such declaration and
its consequences if:
28
(i) the Depositor has paid or deposited with the Note
Trustee a sum sufficient to pay:
(A) all overdue installments of interest on all of the
Notes;
(B) any accrued Additional interest on all of the
Notes;
(C) the principal of and any premium, if any, on any
Notes that have become due otherwise than by such declaration of
acceleration and interest and Additional Interest thereon at the
rate borne by the Notes; and
(D) all sums paid or advanced by the Note Trustee
under the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Note Trustee, the Property
Trustee and their agents and counsel; and
(ii) all Note Events of Default, other than the non-payment of
the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 1.13 of
the Indenture.
Upon receipt by the Property Trustee of written notice
requesting such an acceleration, or rescission and annulment thereof, by Holders
of any part of the Preferred Securities, a record date shall be established for
determining Holders of Outstanding Preferred Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Property Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record date;
provided, that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is
ninety (90) days after such record date, such notice of declaration of
acceleration, or rescission and annulment, as the case may be, shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such ninety (90)-day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice that has been
canceled pursuant to the proviso to the preceding sentence, in which event a new
record date shall be established pursuant to the provisions of this Section
6.10(a).
(b) For so long as any Preferred Securities remain
Outstanding, to the fullest extent permitted by law and subject to the terms of
this Trust Agreement and the Indenture, upon a Note Event of Default specified
in paragraph (a) or (b) of Section 5.1 of the Indenture, any Holder of Preferred
Securities shall have the right to institute a proceeding directly against the
Depositor, pursuant to Section 5.8 of the Indenture, for enforcement of payment
to such Holder of any amounts payable in respect of Notes having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such Holder. Except as set forth in Section 6.10(a) and this
Section 6.10(b), the Holders of Preferred Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Notes.
(c) Notwithstanding paragraphs (a) and (b) of this Section
6.10, the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any Note Event of Default, except any Note Event of Default arising from the
failure to pay any principal of or any premium, if any, or interest on
(including any Additional Interest) the Notes (unless such Note Event of Default
has been cured and a sum sufficient to pay all matured installments of interest
and all principal and premium, if any, on all Notes due otherwise than by
acceleration has been deposited with the Note Trustee) or a Note Event of
Default in respect of a covenant or provision that under the Indenture cannot be
modified or amended without the consent of the holder of each outstanding Note.
Upon any such waiver, such Note Event of Default shall cease to exist and any
Note Event of Default arising therefrom shall be deemed to have been cured for
every purpose of the Indenture; but no such waiver shall affect any subsequent
Note Event of Default or impair any right consequent thereon.
29
(d) Notwithstanding paragraphs (a) and (b) of this Section
6.10, the Holders of at least a Majority in Liquidation Amount of the Preferred
Securities may, on behalf of the Holders of all the Preferred Securities, waive
any past Event of Default and its consequences. 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 Trust Agreement,
but no such waiver shall extend to any subsequent or other Event of Default or
impair any right consequent thereon.
(e) The Holders of a Majority in Liquidation Amount of the
Preferred Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Property Trustee in
respect of this Trust Agreement or the Notes or exercising any trust or power
conferred upon the Property Trustee under this Trust Agreement; provided, that,
subject to Sections 8.5 and 8.7, the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee being advised by
counsel determines that the action so directed may not lawfully be taken, or if
the Property Trustee in good faith shall, by an officer or officers of the
Property Trustee, determine that the proceedings so directed would be illegal or
involve it in personal liability or be unduly prejudicial to the rights of
Holders not party to such direction, and provided, further, that nothing in this
Trust Agreement shall impair the right of the Property Trustee to take any
action deemed proper by the Property Trustee and which is not inconsistent with
such direction.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the Property
Trustee and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally
on behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:
(a) the Property Trustee is a New York banking corporation,
duly organized, validly existing and in good standing under the laws of the
State of New York;
(b) the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) the Delaware Trustee is a national banking association,
duly formed and validly existing under the laws of the United States:,
(d) the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and the Delaware Trustee and constitutes
the legal, valid and binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity;
(f) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other action
on the part of the Property Trustee and the Delaware Trustee and do not require
any approval of stockholders of the Property Trustee and the Delaware Trustee
and such execution, delivery and performance will not (i) violate the Charter or
By-laws of the Property Trustee or the Delaware Trustee, (ii) violate any
provision of, or constitute, with or without notice or lapse of time, a default
under, or result in the imposition of any lien on any properties included in the
Trust Property pursuant to the provisions of any indenture, mortgage, credit
agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any applicable law, governmental rule or regulation of the United States
or the State of Delaware, as the case may be, governing the banking, trust or
general powers of the Property Trustee or the Delaware Trustee or any order,
judgment or decree applicable to the Property Trustee or the Delaware Trustee;
30
(g) neither the authorization, execution or delivery by the
Property Trustee or the Delaware Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Property Trustee or the Delaware
Trustee contemplated herein requires the consent or approval of, the giving of
notice to, the registration with or the taking of any other action with respect
to any governmental authority or agency under any existing law of the United
States or the State of Delaware governing the banking, trust or general powers
of the Property Trustee or the Delaware Trustee, as the case may be; and
(h) to the best of each of the Property Trustee's and the
Delaware Trustee's knowledge, there are no proceedings pending or threatened
against or affecting the Property Trustee or the Delaware Trustee in any court
or before any governmental authority, agency or arbitration board or tribunal
that, individually or in the aggregate, would materially and adversely affect
the Trust or would question the right, power and authority of the Property
Trustee or the Delaware Trustee, as the case may be, to enter into or perform
its obligations as one of the Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit
of the Holders that:
(a) the Depositor is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation;
(b) the Depositor has full corporate power, authority and
legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed
and delivered by the Depositor and constitutes the legal, valid and binding
agreement of the Depositor enforceable against the Depositor in accordance with
its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general principles of equity;
(d) the Securities Certificates issued at the Closing Date on
behalf of the Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the applicable Trustees pursuant to
the terms and provisions of, and in accordance with the requirements of, this
Trust Agreement and the Holders will be, as of such date, entitled to the
benefits of this Trust Agreement;
(e) the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other action
on the part of the Depositor and do not require any approval of stockholders of
the Depositor and such execution, delivery and performance will not (i) violate
the articles or certificate of incorporation or by-laws (or other organizational
documents) of the Depositor or (ii) violate any applicable law, governmental
rule or regulation governing the Depositor or any material portion of its
property or any order, judgment or decree applicable to the Depositor or any
material portion of its property;
(f) neither the authorization, execution or delivery by the
Depositor of this Trust Agreement nor the consummation of any of the
transactions by the Depositor contemplated herein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing law governing the Depositor or any material portion of its property;
and
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(g) there are no proceedings pending or, to the best of the
Depositor's knowledge, threatened against or affecting the Depositor or any
material portion of its property in any court or before any governmental
authority, agency or arbitration board or tribunal that, individually or in the
aggregate, would materially and adversely affect the Trust or would question the
right, power and authority of the Depositor, as the case may be, to enter into
or perform its obligations under this Trust Agreement.
ARTICLE VIII.
THE TRUSTEES
SECTION 8.1. Number of Trustees.
The number of Trustees shall be five (5); provided, that the
Property Trustee and the Delaware Trustee may be the same Person, in which case
the number of Trustees shall be four (4). The number of Trustees may be
increased or decreased by Act of the Holder of the Common Securities subject to
Sections 8.2, 8.3, and 8.4. The death, resignation, retirement, removal,
bankruptcy, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul, dissolve or terminate the Trust.
SECTION 8.2. Property Trustee Required.
There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a corporation
organized and doing business under the laws of the United States or of any state
thereof, authorized to exercise corporate trust powers, having a combined
capital and surplus of at least fifty million dollars ($50,000,000), subject to
supervision or examination by federal or state authority and having an office
within the United States. If any such Person publishes reports of condition at
least annually pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section 8.2, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Property Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.2, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article VIII.
SECTION 8.3. Delaware Trustee Required.
(a) If required by the Delaware Statutory Trust Act, there
shall at all times be a Delaware Trustee with respect to the Trust Securities.
The Delaware Trustee shall either be (i) a natural person who is at least 21
years of age and a resident of the State of Delaware or (ii) a legal entity that
has its principal place of business in the State of Delaware, otherwise meets
the requirements of applicable Delaware law and shall act through one or more
persons authorized to bind such entity. If at any time the Delaware Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.3, it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VIII. The Delaware Trustee shall have the same rights,
privileges and immunities as the Property Trustee.
(b) The Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the trustees of the "trust
for the sole and limited purpose of fulfilling the requirements of Section 3807
of the Delaware Statutory Trust Act and for taking such actions as are required
to be taken by a Delaware trustee under the Delaware Statutory Trust Act. The
duties (including fiduciary duties), liabilities and obligations of the Delaware
Trustee shall be limited to (a) accepting legal process served on the Trust in
the State of Delaware and (b) the execution of any certificates required to be
filed with the Secretary of State of the State of Delaware that the Delaware
Trustee is required to execute under Section 3811 of the Delaware Statutory
Trust Act and there shall be no other duties (including fiduciary duties) or
obligations, express or implied, at law or in equity, of the Delaware Trustee.
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SECTION 8.4. Appointment of Administrative Trustees.
(a) There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that
entity. Each of the individuals identified as an "Administrative Trustee" in the
preamble of this Trust Agreement hereby accepts his or her appointment as such.
(b) Except where a requirement for action by a specific number
of Administrative Trustees is expressly set forth in this Trust Agreement, any
act required or permitted to be taken by, and any power of the Administrative
Trustees may be exercised by, or with the consent of any one such Administrative
Trustee. Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with Section 8.11, the Administrative Trustees in office,
regardless of their number (and notwithstanding any other provision of this
Trust Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
SECTION 8.5. Duties and Responsibilities of the Trustees.
(a) The rights, immunities, duties and responsibilities of the
Trustees shall be as provided by this Trust Agreement and there shall be no
other duties (including fiduciary duties) or obligations, express or implied, at
law or in equity, of the Trustees; provided, however, that if an Event of
Default known to the Property Trustee has occurred and is continuing, the
Property Trustee shall, prior to the receipt of directions, if any, from the
Holders of at least a Majority in Liquidation Amount of the Preferred
Securities, exercise such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require any of the Trustees to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its or their rights or
powers, if it or they shall have reasonable grounds for believing that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it. Whether or not herein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section 8.5. Nothing in this Trust Agreement shall be
construed to release any Administrative Trustee from liability for his or her
own negligent action, negligent failure to act; or his or her own willful
misconduct. To the extent that, at law or in equity, a Trustee has duties and
liabilities relating to the Trust or to the Holders, such Trustee shall not be
liable to the Trust or to any Holder for such Trustee's good faith reliance on
the provisions of this Trust Agreement. The provisions of this Trust Agreement,
to the extent that they restrict the duties and liabilities of the Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Holders to replace such other duties and liabilities of the Trustees.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.5(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement.
(c) No provisions of this Trust Agreement shall be construed
to relieve the Property Trustee from liability with respect to matters that are
within the authority of the Property Trustee under this Trust Agreement for its
own negligent action, negligent failure to act or willful misconduct, except
that:
(i) the Property Trustee shall not be liable for any error
or judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
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(ii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee hereunder or under the Indenture, or exercising
any trust or power conferred upon the Property Trustee under this Trust
Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Notes and the
Payment Account shall be to deal with such Property in a similar manner
as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Depositor; and money held by the Property Trustee
need not be segregated from other funds held by it except in relation
to the Payment Account maintained by the Property Trustee pursuant to
Section 3.1 and except to the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or misconduct of
any other Trustee or the Depositor.
SECTION 8.6. Notices of Defaults and Extensions.
(a) Within ninety (90) days after the occurrence of a default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such default to the Holders, the Administrative Trustees and the
Depositor, unless such default shall have been cured or waived; provided, that,
except in the case of a default in the payment of the principal of or any
premium, if any, or interest (including any Additional Interest) on any Trust
Security, the Property Trustee shall be fully protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Property Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Trust Securities. For the purpose of this Section 8.6, the
term "default" means any event that is, or after notice or lapse of time or both
would become, an Event of Default.
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(b) Within five (5) Business Days after the receipt of notice
of the Depositor's exercise of its right to defer the payment of interest on the
Notes pursuant to the Indenture, the Property Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.
(c) The Property Trustee shall not be deemed to have knowledge
of any Event of Default unless the Property Trustee shall have received written
notice thereof from the Depositor, any Administrative Trustee or any Holder or
unless an officer of the Property Trustee charged with the administration of
this Trust Agreement shall have obtained actual knowledge of such Event of
Default.
(d) The Property Trustee shall notify all Holders of the
Preferred Securities of any notice of default received with respect to the
Notes.
SECTION 8.7. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.5:
(a) the Property Trustee may conclusively rely and shall be
protected in acting or refraining from acting in good faith and in accordance
with the terms hereof upon any resolution, Opinion of Counsel, certificate,
written representation of a Holder or transferee, certificate of auditors or any
other resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement
the Property Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Trust Agreement the
Property Trustee finds a provision ambiguous or inconsistent with any other
provisions contained herein or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to any
matter as to which the Holders of the Preferred Securities are entitled to vote
under the terms of this Trust Agreement, the Property Trustee shall deliver a
notice to the Depositor requesting the Depositor's written instruction as to the
course of action to be taken and the Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be instructed in
writing to take, or to refrain from taking, by the Depositor; provided, that if
the Property Trustee does not receive such instructions of the Depositor within
ten (10) Business Days alter it has delivered such notice or such reasonably
shorter period of time set forth in such notice, the Property Trustee may, but
shall be under no duty to, take such action, or refrain from taking such action,
as the Property Trustee shall deem advisable and in the best interests of the
Holders, in which event the Property Trustee shall have no liability except for
its own negligence, bad faith or willful misconduct;
(c) any direction or act of the Depositor contemplated by this
Trust Agreement shall be sufficiently evidenced by an Officers' Certificate
unless otherwise expressly provided herein;
(d) any direction or act of an Administrative Trustee
contemplated by this Trust Agreement shall be sufficiently evidenced by a
certificate executed by such Administrative Trustee and setting forth such
direction or act;
(e) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
re-recording, re-filing or re-registration thereof;
(f) the Property Trustee may consult with counsel (which
counsel may be counsel to the Property Trustee, the Depositor or any of its
Affiliates, and may include any of its employees) and the advice of such counsel
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 reliance thereon
and in accordance with such advice; the Property Trustee shall have the right at
any time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any of the Holders pursuant to this Trust Agreement,
unless such Holders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses (including reasonable
attorneys' fees and expenses) and liabilities that might be incurred by it in
compliance with such request or direction, including reasonable advances as may
be requested by the Property Trustee; provided, however, that nothing contained
in this Section 8.7(g) shall be construed to relieve the Property Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the rights
and powers in it vested by this Trust Agreement; provided, further, that nothing
contained in this Section 8.7(g) shall prevent the Property Trustee from
exercising its rights under Section 8.11 hereof;
(h) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, approval, bond, debenture, note or other evidence of indebtedness or
other paper or document, unless requested in writing to do so by one or more
Holders, but the Property Trustee may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Property Trustee shall
determine to make such inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Depositor, personally or by agent or
attorney;
(i) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents, attorneys, custodians or nominees and the Property Trustee
shall not be responsible for any negligence or misconduct on the part of any
such agent, attorney, custodian or nominee appointed with due care by it
hereunder;
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(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right hereunder, the Property Trustee (i) may request
instructions from the Holders (which instructions may only be given by the
Holders of the same proportion in Liquidation Amount of the Trust Securities as
would be entitled to direct the Property Trustee under this Trust Agreement in
respect of such remedy, right or action), (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are received
and (iii) shall be protected in acting in accordance with such instructions;
(k) except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement;
(l) without prejudice to any other rights available to the
Property Trustee under applicable law, when the Property Trustee incurs expenses
or renders services in connection with a Bankruptcy Event, such expenses
(including legal fees and expenses of its agents and counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors rights
generally; and
(m) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely on an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the
Depositor.
No provision of this Trust Agreement shall be deemed to impose
any duty or obligation on any 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 such Person 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.
SECTION 8.8. Delegation of Power.
Any Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 its, his
or her power for the purpose of executing any documents contemplated in Section
2.5. The Trustees shall have power to delegate from time to time to such of
their number or to the Depositor the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient, to the extent such delegation is
not prohibited by applicable law or contrary to the provisions of this Trust
Agreement.
SECTION 8.9. May Hold Securities.
Any Trustee or any other agent of any Trustee or the Trust, in
its individual or any other capacity, may become the owner or pledgee of Trust
Securities and except as provided in the definition of the terms "Outstanding"
in Article I, may otherwise deal with the Trust with the same rights it would
have if it were not an Trustee or such other agent.
SECTION 8.10. Compensation; Reimbursement; Indemnity.
The Depositor agrees:
(a) to pay to the Trustees from time to time such reasonable
compensation for all services rendered by them hereunder as may be agreed by the
Depositor and the Trustees from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) to reimburse the Trustees upon request for all reasonable
expenses, disbursements and advances incurred or made by the Trustees in
accordance with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of their agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
gross negligence, bad faith or willful misconduct; and
36
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee,
(iii) any officer, director, shareholder, employee, representative or agent of
any Trustee or any Affiliate of any Trustee and (iv) any employee or agent of
the Trust (referred to herein as an "Indemnified Person") from and against any
loss, damage, liability, tax (other than income, franchise or other taxes
imposed on amounts paid pursuant to Section 8.10(a) or (b) hereof), penalty,
expense or claim of any kind or nature whatsoever incurred without negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with the acceptance or administration of the Trust hereunder, including the
advancement of funds to cover the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The Trust shall have no payment, reimbursement or indemnity
obligations to the Trustees under this Section 8.10. The provisions of this
Section 8.10 shall survive the termination of this Trust Agreement and the
earlier removal or resignation of any Trustee.
No Trustee may claim any Lien on any Trust Property whether
before or after termination of the Trust as a result of any amount due pursuant
to this Section 8.10.
In no event shall the Property Trustee and the Delaware
Trustee be liable for any indirect, special, punitive or consequential loss or
damage of any kind whatsoever, including, but not limited to, lost profits, even
if the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.
In no event shall the Property Trustee and the Delaware
Trustee be liable for any failure or delay in the performance of its obligations
hereunder because of circumstances beyond its control, including, but not
limited to, acts of God, flood, war (whether declared or undeclared), terrorism,
fire, not, embargo, government action, including any laws, ordinances,
regulations, governmental action or the like which delay, restrict or prohibit
the providing of the services contemplated by this Trust Agreement.
SECTION 8.11. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of any Trustee and no
appointment of a successor Trustee pursuant to this Article VIII shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.12.
(b) A Trustee may resign at any time by giving written notice
thereof to the Depositor and, in the case of the Property Trustee and the
Delaware Trustee, to the Holders.
(c) Unless an Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed (with or without cause) at any time by Act of the Holder of Common
Securities. If an Event of Default shall have occurred and be continuing, the
Property Trustee or the Delaware Trustee, or both of them, may be removed (with
or without cause) at such time by Act of the Holders of at least a Majority in
Liquidation Amount of the Preferred Securities, delivered to the removed Trustee
(in its individual capacity and on behalf of the Trust). An Administrative
Trustee may be removed (with or without cause) only by Act of the Holder of the
Common Securities at any time.
(d) If any Trustee shall resign, be removed or become
incapable of acting as Trustee, or if a vacancy shall occur in the office of any
Trustee for any reason, at a time when no Event of Default shall have occurred
and be continuing, the Holder of the Common Securities, by Act of the Holder of
the Common Securities, shall promptly appoint a successor Trustee or Trustees,
and such successor Trustee and the retiring Trustee shall comply with the
applicable requirements of Section 8.12. If the Property Trustee or the Delaware
Trustee shall resign, be removed or become incapable of continuing to act as the
Property Trustee or the Delaware Trustee, as the case may be, at a time when an
Event of Default shall have occurred and be continuing, the Holders of the
Preferred Securities, by Act of the Holders of a Majority in Liquidation Amount
of the Preferred Securities, shall promptly appoint a successor Property Trustee
or Delaware Trustee, and such successor Property Trustee or Delaware Trustee and
the retiring Property Trustee or Delaware Trustee shall comply with the
applicable requirements of Section 8.12. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when an Event of Default shall have occurred and be continuing, the holder
of the Common Securities by Act of the Holder of Common Securities shall
promptly appoint a successor Administrative Trustee and such successor
Administrative Trustee and the retiring Administrative Trustee shall comply with
the applicable requirements of Section 8.12. If no successor Trustee shall have
been so appointed by the Holder of the Common Securities or Holders of the
Preferred Securities, as the case may be, and accepted appointment in the manner
required by Section 8.12 within thirty (30) days after the giving of a notice of
resignation by a Trustee, the removal of a Trustee, or a Trustee becoming
incapable of acting as such Trustee, any Holder who has been a Holder of
Preferred Securities for at least six (6) months may, on behalf of himself and
all others similarly situated, and any resigning Trustee may, in each case, at
the expense of the Depositor, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
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(e) The Depositor shall give notice of each resignation and
each removal of the Property Trustee or the Delaware Trustee and each
appointment of a successor Property Trustee or Delaware Trustee to all Holders
in the manner provided in Section 10.8. Each notice shall include the name of
the successor Property Trustee or Delaware Trustee and the address of its
Corporate Trust Office if it is the Property Trustee.
(f) Notwithstanding the foregoing or any other provision of
this Trust Agreement, in the event any Administrative Trustee or a Delaware
Trustee who is a natural person dies or becomes, in the opinion of the Holder of
Common Securities, incompetent or incapacitated, the vacancy created by such
death, incompetence or incapacity may be filled by (i) the unanimous act of the
remaining Administrative Trustees if there are at least two of them or (ii)
otherwise by the Holder of the Common Securities (with the successor in each
case being a Person who satisfies the eligibility requirement for Administrative
Trustees or Delaware Trustee, as the case may be, set forth in Sections 8.3 and
8.4).
(g) Upon the appointment of a successor Delaware Trustee, such
successor Delaware Trustee shall file a Certificate of Amendment to the
Certificate of' Trust in accordance with Section 3810 of the Delaware Statutory
Trust Act.
SECTION 8.12. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee, each successor Trustee shall execute and deliver to the Depositor and
to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and
each such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but, on request of the Trust or any successor Trustee such retiring
Trustee shall, upon payment of its charges, duly assign, transfer and deliver to
such successor Trustee all Trust Property, all proceeds thereof and money held
by such retiring Trustee hereunder with respect to the Trust Securities and the
Trust.
(b) Upon request of any such successor Trustee, the Trust (or
the retiring Trustee if requested by the Depositor) shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
(c) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article VIII.
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SECTION 8.13. Merger, Conversion, Consolidation or Succession
to Business.
Any Person into which the Property Trustee or the Delaware
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which such
Trustee shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of such Trustee, shall be the successor of such
Trustee hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided, that such Person shall
be otherwise qualified and eligible under this Article VIII.
SECTION 8.14. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities
Certificates shall be taken as the statements of the Trust and the Depositor,
and the Trustees do not assume any responsibility for their correctness. The
Trustees make no representations as to the title to, or value or condition of,
the property of the Trust or any part thereof, nor as to the validity or
sufficiency of this Trust Agreement, the Notes or the Trust Securities. The
Trustees shall not be accountable for the use or application by the Depositor of
the proceeds of the Notes.
SECTION 8.15. Property Trustee May File Proofs of Claim.
(a) In case of any Bankruptcy Event (or event that with the
passage of time would become a Bankruptcy Event) relative to the Trust or any
other obligor upon the Trust Securities or the property of the Trust or of such
other obligor or their creditors, the Property Trustee (irrespective of whether
any Distributions on the Trust Securities shall then be due and payable and
irrespective of whether the Property Trustee shall have made any demand on the
Trust for the payment of any past due Distributions) shall be entitled and
empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:
(i) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Property Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Property Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding; and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such proceeding is hereby authorized by each
Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee first any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its agents and counsel, and any other amounts due the Property Trustee.
(b) Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or compensation
affecting the Trust Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder in
any such proceeding.
SECTION 8.16. Reports to and from the Property Trustee.
(a) The Depositor and the Administrative Trustees shall
deliver to the Property Trustee, not later than forty five (45) days after the
end of each of the first three fiscal quarters of the Depositor and not later
than ninety (90) days after the end of each fiscal year of the Trust ending
after the date of this Trust Agreement, an Officers' Certificate covering the
preceding fiscal year, stating whether or not to the knowledge of the signers
thereof the Depositor and the Trust are in default in the performance or
observance of any of the terms, provisions and conditions of this Trust
Agreement (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Depositor or the Trust shall be in default,
specifying all such defaults and the nature and status thereof of which they
have knowledge.
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(b) The Depositor shall furnish (i) to the Property Trustee;
(ii) Dekania Capital Management, LLC, c/▇ ▇▇▇▇▇ Bros. & Co. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other address as designated
by Dekania Capital Management, LLC); and (iii) any Owner of the Preferred
Securities reasonably identified to the Depositor and the Trust (which
identification may be made either by such Owner or by Dekania Capital
Management, LLC) a duly completed and executed certificate substantively and
substantially in the form attached hereto as Exhibit G, including the financial
statements referenced in such Exhibit, which certificate and financial
statements shall be so furnished by the Depositor not later than forty five (45)
days after the end of each of the first three fiscal quarters of each fiscal
year of the Depositor and not later than ninety (90) days after the end of each
fiscal year of the Depositor.
The Property Trustee shall obtain all reports, certificate and
information, which it is entitled to obtain under each of the Operative
Documents.
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Dissolution Upon Expiration Date.
Unless earlier dissolved, the Trust shall automatically
dissolve on September 30, 2038 (the "Expiration Date"), and the Trust Property
shall be liquidated in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event", upon the occurrence of which the Trust shall be dissolved:
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor, in its capacity as the Holder of
the Common Securities, unless the Depositor shall have transferred the Common
Securities as provided by Section 5.11, in which case this provision shall refer
instead to any such successor Holder of the Common Securities;
(b) the written direction to the Property Trustee from the
Holder of the Common Securities at any time to dissolve the Trust and, after
satisfaction of any liabilities of the Trust as required by applicable law, to
distribute the Notes to Holders in exchange for the Preferred Securities (which
direction is optional and wholly within the discretion of the Holder of the
Common Securities), provided, that the Holder of the Common Securities shall
have received the prior approval of all necessary Applicable Insurance
Regulatory Authorities then required;
(c) the redemption of all of the Preferred Securities in
connection with the payment at maturity or redemption of all the Notes. and
(d) the entry of an order for dissolution of the Trust by a
court of competent
jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the
Trustees and the Trust shall terminate upon the latest to occur of the
following: (a) the distribution by the Property Trustee to Holders of all
amounts required to be distributed hereunder upon the liquidation of the Trust
pursuant to Section 9.4, or upon the redemption of all of the Trust Securities
pursuant to Section 4.2; (b) the satisfaction of any expenses owed by the Trust;
and (c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Holders.
40
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in Section 9.2(a),
(b) or (d) occurs or upon the Expiration Date, the Trust shall be liquidated by
the Property Trustee as expeditiously as the Property Trustee shall determine to
be possible by distributing, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, to each Holder a Like Amount of Notes.
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee not less than thirty (30) nor more than sixty (60) days prior to the
Liquidation Date to each Holder of Trust Securities at such Holder's address
appearing in the Securities Register. All such notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and
(subject to Section 9.4(d)) any Securities Certificates not surrendered
for exchange will be deemed to represent a Like Amount of Notes; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Securities Certificates for
Notes, or if Section 9.4(d) applies, receive a Liquidation
Distribution, as the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to
effect the liquidation of the Trust and distribution of the Notes to Holders,
the Property Trustee, either itself acting as exchange agent or through the
appointment of a separate exchange agent, shall establish a record date for such
distribution (which shall not be more than forty five (45) days prior to the
Liquidation Date nor prior to the date on which notice of such liquidation is
given to the Holders) and establish such procedures as it shall deem appropriate
to effect the distribution of Notes in exchange for the Outstanding Securities
Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Notes will be
issued to Holders of Securities Certificates, upon surrender of such
Certificates to the exchange agent for exchange, (iii) the Depositor shall use
its best efforts to have the Notes listed on the New York Stock Exchange or on
such other exchange, interdealer quotation system or self-regulatory
organization on which the Preferred Securities are then listed, if any, (iv)
Securities Certificates not so surrendered for exchange will be deemed to
represent a Like Amount of Notes bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid Distributions on such Securities
Certificates until such certificates are so surrendered (and until such
certificates are so surrendered, no payments of interest or principal will be
made to Holders of Securities Certificates with respect to such Notes) and (v)
all rights of Holders holding Trust Securities will cease, except the right of
such Holders to receive Notes upon surrender of Securities Certificates.
(d) Notwithstanding the other provisions of this Section 9.4,
if distribution of the Notes in the manner provided herein is determined by the
Property Trustee not to be permitted or practical, the Trust Property shall be
liquidated, and the Trust shall be wound up by the Property Trustee in such
manner as the Property Trustee determines. In such event, Holders will be
entitled to receive out of the assets of the Trust available for distribution to
Holders, after satisfaction of liabilities to creditors of the Trust as provided
by applicable law, an amount equal to the Liquidation Amount per Trust Security
plus accumulated and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"). If, upon any such winding up the
Liquidation Distribution can be paid only in part because the Trust leas
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). The Holder of the Common Securities will be entitled
to receive Liquidation Distributions upon any such winding up pro rata (based
upon Liquidation Amounts) with Holders of all Trust Securities, except that, if
an Event of Default has occurred and is continuing, the Preferred Securities
shall have a priority over the Common Securities as provided in Section 4.3.
41
SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of Trust.
The Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person except pursuant to this Article IX.
At the request of the Holders of the Common Securities, without the consent of
the Holders of the Preferred Securities, the Trust may merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any State; provided, that:
(a) such successor entity either (i) expressly assumes all of
the obligations of the Trust under this Trust Agreement with respect to the
Preferred Securities or (ii) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (such
other Securities, the "Successor Securities") so long as the Successor
Securities have the same priority as the Preferred Securities with respect to
distributions and payments upon liquidation, redemption and otherwise;
(b) a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee is appointed to
hold the Notes;
(c) if the Preferred Securities or the Notes are rated, such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not cause the Preferred Securities or the Notes (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization that then assigns a rating to the Preferred Securities or the
Notes;
(d) the Preferred Securities are listed, or any Successor
Securities will be listed upon notice of issuance, on any national securities
exchange or interdealer quotation system on which the Preferred Securities are
then listed, if any;
(e) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect;
(f) such successor entity has a purpose substantially
identical to that of the Trust;
(g) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Depositor has received an
Opinion of Counsel to the effect that (1) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders of the Preferred
Securities (including any Successor Securities) in any material respect; (ii)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor such successor entity will be required
to register as an "investment company" under the Investment Company Act and
(iii) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Trust (or the successor entity) will continue
to be classified as a grantor trust for U.S. federal income tax purposes; and
(h) the Depositor or its permitted transferee owns all of the
common securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee Agreement.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
Holders of all of the Preferred Securities, consolidate, amalgamate, merge with
or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other Person or permit any other
entity to consolidate, amalgamate, merge with or into, or replace, the Trust if
such consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the successor entity to be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes or cause the Notes to be treated as other than
indebtedness of the Depositor for United States federal income tax purposes.
42
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the death, bankruptcy,
termination, dissolution or incapacity of any Person having an interest,
beneficial or otherwise, in Trust Securities shall not operate to terminate this
Trust Agreement, nor annul, dissolve or terminate the Trust nor entitle the
legal representatives or heirs of such Person or any Holder for such Person, to
claim an accounting, take any action or bring any proceeding in any court for a
partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
SECTION 10.2. Agreed Tax Treatment of Trust and Trust
Securities.
The parties hereto and, by its acceptance or acquisition of a
Trust Security or a beneficial interest therein, the Holder of, and any Person
that acquires a beneficial interest in, such Trust Security intend and agree to
treat the Trust as a grantor trust for United States federal, state and local
tax purposes, and to treat the Trust Securities (including all payments and
proceeds with respect to such Trust Securities) as undivided beneficial
ownership interests in the Trust Property (and payments and proceeds therefrom,
respectively) for United States federal, state and local tax purposes and to
treat the Notes as indebtedness of the Depositor for United States federal,
state and local tax purposes. The provisions of this Trust Agreement shall be
interpreted to further this intention and agreement of the parties.
SECTION 10.3. Amendment.
(a) This Trust Agreement may be amended from time to time by
the Property Trustee, the Administrative Trustees and the Holder of all the
Common Securities, without the consent of any Holder of the Preferred
Securities, (i) to cure any ambiguity, correct or supplement any provision
herein that may be defective or inconsistent with any other provision herein, or
to make or amend any other provisions with respect to matters or questions
arising under this Trust Agreement, which shall not be inconsistent with the
other provisions of this Trust Agreement, (ii) to modify, eliminate or add to
any provisions of this Trust Agreement to such extent as shall be necessary to
ensure that the Trust will neither be taxable as a corporation nor be classified
as other than a grantor trust for United States federal income tax purposes at
all times that any Trust Securities are Outstanding or to ensure that the Notes
are treated as indebtedness of the Depositor for United States federal income
tax purposes, or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act or (iii) to add to the
covenants, restrictions or obligations of the Depositor; provided, that in the
case of clauses (i), (ii) or (iii), such action shall not adversely affect in
any material respect the interests of any Holder.
(b) Except as provided in Section 10.3(c), any provision of
this Trust Agreement may be amended by the Property Trustee, the Administrative
Trustees and the Holder of all of the Common Securities and with (i) the consent
of Holders of at least a Majority in Liquidation Amount of the Preferred
Securities and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not cause the Trust to be taxable as a
corporation or classified as other than a grantor trust for United States
federal income tax purposes or affect the treatment of the Notes as indebtedness
of the Depositor for United States federal income tax purposes or affect the
Trust's exemption from status (or from any requirement to register) as an
"investment company" under the Investment Company Act.
(c) Notwithstanding any other provision of this Trust
Agreement, without the consent of each Holder, this Trust Agreement may not be
amended to (i) change the accrual rate, amount, currency or timing of any
Distribution on or the redemption price of the Trust Securities or otherwise
adversely affect the amount of any Distribution or other payment required to be
made in respect of the Trust Securities as of a specified date, (ii) restrict or
impair the right of a Holder to institute suit for the enforcement of any such
payment on or after such date, (iii) reduce the percentage of aggregate
Liquidation Amount of Outstanding Preferred Securities, the consent of whose
Holders is required for any such amendment, or the consent of whose Holders is
required for any waiver of compliance with any provision of this Trust Agreement
or of defaults hereunder and their consequences provided for in this Trust
Agreement; (iv) impair or adversely affect the rights and interests of the
Holders in the Trust Property, or permit the creation of any Lien on any portion
of the Trust Property; or (v) modify the definition of "Outstanding," this
Section 10.3(c), Sections 4.1, 4.2, 4.3, 6.10(e) or Article IX.
43
(d) Notwithstanding any other provision of this Trust
Agreement, no Trustee shall enter into or consent to any amendment to this Trust
Agreement that would cause the Trust to be taxable as a corporation or to be
classified as other than a grantor trust for United States federal income tax
purposes or that would cause the Notes to fail or cease to be treated as
indebtedness of the Depositor for United States federal income tax purposes or
that would cause the Trust to fail or cease to qualify for the exemption from
status (or from any requirement to register) as an "investment company" under
the Investment Company Act.
(e) If any amendment to this Trust Agreement is made, the
Administrative Trustees or the Property Trustee shall promptly provide to the
Depositor and the Note Trustee a copy of such amendment.
(f) No Trustee shall be required to enter into any amendment
to this Trust Agreement that affects its own rights, duties or immunities under
this Trust Agreement. The Trustees shall be entitled to receive an Opinion of
Counsel and an Officers' Certificate stating that any amendment to this Trust
Agreement is in compliance with this Trust Agreement and all conditions
precedent herein provided for relating to such action have been met.
(g) No amendment or modification to this Trust Agreement that
adversely affects in any material respect the rights, duties, liabilities,
indemnities or immunities of the Delaware Trustee hereunder shall be permitted
without the prior written consent of the Delaware Trustee.
SECTION 10.4. Separability.
If any provision in this Trust Agreement or in the Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby, and there shall be deemed substituted for the provision at
issue a valid, legal and enforceable provision as similar as possible to the
provision at issue.
SECTION 10.5. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF
THE HOLDERS, THE TRUST, THE DEPOSITOR AND THE TRUSTEES WITH RESPECT TO THIS
TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICTS OF LAWS PROVISIONS.
SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to
the benefit of any successor to the Depositor, the Trust and any Trustee,
including any successor by operation of law. Except in connection with a
transaction involving the Depositor that is permitted under Article VIII of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Depositor's obligations hereunder, the Depositor shall not assign its
obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.
44
SECTION 10.8. Reports, Notices and Demands.
(a) Any report, notice, demand or other communication that by
any provision of this Trust Agreement is required or permitted to be given or
served to or upon any Holder or the Depositor may be given or served in writing
delivered in person, or by reputable, overnight courier, by telecopy or by
deposit thereof, first-class postage prepaid, in the United States mail,
addressed, (a) in the case of a Holder of Preferred Securities, to such Holder
as such Holder's name and address may appear on the Securities Register; and (b)
in the case of the Holder of all the Common Securities or the Depositor, to
Tower Group, Inc. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, or to such other address as may be specified in
a written notice by the Holder of all the Common Securities or the Depositor, as
the case may be, to the Property Trustee. Such report, notice, demand or other
communication to or upon a Holder or the Depositor shall be deemed to have been
given when received in person, within one (1) Business Day following delivery by
overnight courier, when telecopied with receipt confirmed, or within three (3)
Business Days following delivery by mail, 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.
(b) Any notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon the Property Trustee, the Delaware Trustee, the Administrative
Trustees or the Trust shall be given in writing by deposit thereof, first-class
postage prepaid, in the U.S. mail, personal delivery or facsimile transmission,
addressed to such Person as follows: (a) with respect to the Property Trustee to
JPMorgan Chase Bank, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇, Attention:
Institutional Trust Services, facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇; (b) with respect to
the Delaware Trustee, to Chase Manhattan Bank USA, National Association, c/o
JPMorgan Chase Bank, 500 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Road, Building 4 (3rd Floor),
Newark, Delaware 19713, Attention: Institutional Trust Services, facsimile no.:
(▇▇▇) ▇▇▇-▇▇▇▇; (c) with respect to the Administrative Trustees, to them at the
address above for notices to the Depositor, marked "Attention: Administrative
Trustees of Tower Group Statutory Trust II", and (d) with respect to the Trust,
to its principal executive office specified in Section 2.2, with a copy to the
Property Trustee. Such notice, demand or other communication to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be deemed to
have been sufficiently given or made only upon actual receipt of the writing by
the Trust, the Property Trustee or the Administrative Trustees.
SECTION 10.9. Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit
of the Holders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any Bankruptcy Law or
otherwise join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. If the Depositor takes action in violation of this Section 10.9,
the Property Trustee agrees, for the benefit of Holders, that at the expense of
the Depositor, it shall file an answer with the applicable bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be estopped
and precluded therefrom and such other defenses, if any, as counsel for the
Property Trustee or the Trust may assert.
SECTION 10.10. Counterparts.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
45
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
TOWER GROUP, INC.,
as Depositor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: President and Chief Executive
Officer
JPMORGAN CHASE RANK, not in its individual CHASE MANHATTAN BANK USA, NATIONAL
capacity but solely as ASSOCIATION, as Delaware Trustee
Property Trustee
By: By:
---------------------------------------- ---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: Assistant Vice President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------- ------------------------------------------
Administrative Trustee Administrative Trustee
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Administrative Trustee
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Amended and Restated Trust Agreement
46
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
TOWER GROUP, INC..
as Depositor
By:
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: President and Chief Executive
Officer
JPMORGAN CHASE RANK, not in its individual CHASE MANHATTAN BANK USA, NATIONAL
capacity but solely as ASSOCIATION, as Delaware Trustee
Property Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By:
---------------------------------------- ------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: Assistant Vice President
---------------------------------------- ------------------------------------
Administrative Trustee Administrative Trustee
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Administrative Trustee
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Amended and Restated Trust Agreement
47
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement as of the day and year first above written.
TOWER GROUP, INC..
as Depositor
By:
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: President and Chief Executive
Officer
JPMORGAN CHASE RANK, not in its individual CHASE MANHATTAN BANK USA, NATIONAL
capacity but solely as ASSOCIATION, as Delaware Trustee
Property Trustee
By: By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------- ---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: Assistant Vice President
---------------------------------------- ---------------------------------------
Administrative Trustee Administrative Trustee
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Administrative Trustee
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Amended and Restated Trust Agreement
48