Exhibit 4(a)
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▇.▇. ▇▇▇▇ REAL ESTATE INVESTMENT TRUST,
Issuer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
--------------------------------------------
Trustee
__________________
Indenture
Dated as of March 25, 1998
_________________
$200,000,000
9 3/4% Senior Secured Notes
due 2008
9 3/4% Series B Senior Secured Notes
due 2008
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▇.▇. ▇▇▇▇ REAL ESTATE INVESTMENT TRUST
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of March 25, 1998
Trust Indenture Indenture
Act Section Section
(S) 310(a)(1) ................... 608(a)
(a)(2) ................... 608(a)
(b) ................... 609
(S) 312(c) ................... 701
(S) 313(c) ................... 702
(S) 314(a) ................... 703
(a)(4) ................... 1008(a)
(b)(1) ................... 1213(b)
(b)(2) ................... 1213(c)
(c)(1) ................... 103
(c)(2) ................... 103
(d)(1) ................... 1213(a)(i)
(d)(2) ................... 1213(a)(ii)
(d)(3) ................... 1213(a)(iii)
(e) ................... 102
(S) 315(b) ................... 602
(S) 316(a)(last
sentence) ................... 101 ("Outstanding")
(a)(1)(A) ................... 502, 512
(a)(1)(B) ................... 513
(b) ................... 508
(c) ................... 105(d)
(S) 317(a)(1) ................... 503
(a)(2) ................... 504
(b) ................... 1003
(S) 318(a) ................... 112
_____________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
Page
PARTIES................................................................... 1
RECITALS.................................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions................................................. 2
Accumulated Interest................................................. 2
Acquired Indebtedness................................................ 2
Act.................................................................. 3
Additional Interest.................................................. 3
Advisory Fees........................................................ 3
Affiliate............................................................ 3
Agent Member......................................................... 3
Applicable Premium................................................... 3
Asset Sale........................................................... 3
Authenticating Agent................................................. 4
Available Amount..................................................... 4
Average Life to Stated Maturity...................................... 4
Bank................................................................. 4
Bank Collateral Account.............................................. 4
Bank Common Stock.................................................... 4
Bank Contribution.................................................... 4
Bank Contribution Collateral......................................... 4
Bank Contribution Collateral Account................................. 5
Bank Stock........................................................... 5
Bank Stock Purchase Amount........................................... 5
Bank Tax Rate........................................................ 5
Board of Trustees.................................................... 5
Board Resolution..................................................... 5
Business Day......................................................... 5
Capital Maintenance Agreement........................................ 5
Capital Stock........................................................ 5
Capitalized Lease Obligation......................................... 6
Cash Equivalents..................................................... 6
Cash Flow--Indenture................................................. 6
CCPCC................................................................ 7
CCPCC Preferred Stock................................................ 7
Certificates of Deposit.............................................. 7
ii
Change of Control.................................................... 7
Closing Date......................................................... 8
Collateral........................................................... 8
Collateral Value..................................................... 8
Commission........................................................... 8
Consolidated Bank Net Income (Loss).................................. 8
Consolidated Interest Expense........................................ 8
Consolidated Net Income (Loss)....................................... 9
Consolidated Net Worth............................................... 9
Consolidated Tax Subsidiary.......................................... 9
Corporate Trust Office............................................... 9
Corporation.......................................................... 10
Currency Agreements.................................................. 10
Custodian............................................................ 10
Custodian Account.................................................... 10
Custodian Agreement.................................................. 10
Default.............................................................. 11
Defaulted Interest................................................... 11
Depositary........................................................... 11
Disinterested Trustee................................................ 11
Event of Default..................................................... 11
Exchange Act......................................................... 11
Exchange Offer....................................................... 11
Exchange Offer Registration Statement................................ 11
Exchange Securities.................................................. 11
Fair Market Value.................................................... 11
FDIA................................................................. 11
FDIC................................................................. 11
Federal Bankruptcy Code.............................................. 12
Financial Asset...................................................... 12
Generally Accepted Accounting Principles............................. 12
GAAP................................................................. 12
General Capital Requirement.......................................... 12
Global Securities.................................................... 12
Guaranteed Indebtedness.............................................. 12
Holder............................................................... 12
Indebtedness......................................................... 12
Indenture............................................................ 13
Initial Purchasers................................................... 13
Initial Securities................................................... 13
Interest Payment Date................................................ 14
Interest Rate Agreements............................................. 14
Investment........................................................... 14
iii
Investment Property.................................................. 14
knowledge............................................................ 14
Lien................................................................. 14
Management Agreements................................................ 14
Margin Securities.................................................... 15
Market Value......................................................... 15
Material Subsidiary.................................................. 15
Maturity............................................................. 15
Moody's.............................................................. 15
New Obligor.......................................................... 15
Nonrecourse Indebtedness............................................. 16
Non-U.S. Person...................................................... 16
Officers' Certificate................................................ 16
Offshore Global Securities........................................... 16
Offshore Physical Securities......................................... 16
Offshore Security Exchange Date...................................... 16
Operating Cash Flow Coverage Ratio................................... 16
Opinion of Counsel................................................... 16
OTS.................................................................. 16
Outstanding.......................................................... 17
Partnership Units.................................................... 17
Paying Agent......................................................... 18
Permitted Holders.................................................... 18
Permitted Indebtedness............................................... 18
Permitted Investment................................................. 19
Permitted Subsidiary Indebtedness.................................... 20
Person............................................................... 21
Physical Securities.................................................. 21
PIK Preferred Stock.................................................. 21
Pledged Bank Stock................................................... 22
Predecessor Security................................................. 22
Preferred Stock...................................................... 22
Private Placement Legend............................................. 22
QIB.................................................................. 22
Qualified Capital Stock.............................................. 22
Real Estate Property................................................. 22
Redeemable Capital Stock............................................. 22
Redemption Date...................................................... 22
Redemption Price..................................................... 22
Registration Rights Agreement........................................ 23
Regular Record Date.................................................. 23
Regulation S......................................................... 23
Regulatory Capital Requirements...................................... 23
iv
Reimbursement Agreement.............................................. 23
Responsible Officer.................................................. 23
Restricted Subsidiary................................................ 23
Retail Notes......................................................... 24
Rule 144A............................................................ 24
S&P.................................................................. 24
Sale Deficit Amount.................................................. 24
▇▇▇▇ Holdings Partnership............................................ 24
Secured Obligations.................................................. 24
Securities........................................................... 24
Securities Act....................................................... 24
Securities Intermediary.............................................. 24
Securitization Entity................................................ 24
Security Entitlement................................................. 24
Security Register and Security Registrar............................. 24
Series B Preferred Stock............................................. 25
Shelf Registration Statement......................................... 25
Single Asset Subsidiary.............................................. 25
Special Record Date.................................................. 25
Stated Maturity...................................................... 25
Subordinated Indebtedness............................................ 25
Subsidiary........................................................... 25
Substitution......................................................... 25
Substitution Date.................................................... 25
Surviving Entity..................................................... 25
Tax Collateral....................................................... 25
Tax Payment Collateral............................................... 25
Tax Payment Collateral Account....................................... 26
Tax Sharing Agreement................................................ 26
Tax Sharing Payment.................................................. 26
13% Preferred Stock.................................................. 26
Treasury Rate........................................................ 26
Trust................................................................ 27
Trust Indenture Act.................................................. 27
TIA.................................................................. 27
Trust Nonrecourse Indebtedness....................................... 27
Trust Request or Trust Order......................................... 27
Trustee.............................................................. 27
Uniform Commercial Code.............................................. 27
Unrestricted Subsidiary.............................................. 27
U.S. Global Security................................................. 28
U.S. Government Obligations.......................................... 28
U.S. Government Securities........................................... 28
U.S. Physical Securities............................................. 28
v
Vice President....................................................... 28
Voting Stock......................................................... 28
Wholly Owned Restricted Subsidiary................................... 29
Wholly Owned Subsidiary.............................................. 29
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 102. Incorporation by Reference of Trust Indenture Act........... 29
SECTION 103. Compliance Certificates and Opinions........................ 29
SECTION 104. Form of Documents Delivered to Trustee...................... 30
SECTION 105. Acts of Holders............................................. 31
SECTION 106. Notices, Etc., to Trustee and Trust......................... 32
SECTION 107. Notice to Holders; Waiver................................... 32
SECTION 108. Effect of Headings and Table of Contents.................... 33
SECTION 109. Successors and Assigns...................................... 33
SECTION 110. Separability Clause......................................... 33
SECTION 111. Benefits of Indenture....................................... 33
SECTION 112. Governing Law............................................... 33
SECTION 113. Legal Holidays.............................................. 33
SECTION 114. Execution of Agreement by Trust............................. 34
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally............................................. 34
SECTION 202. Restrictive Legends......................................... 35
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount and Terms............................................ 38
SECTION 302. Denominations............................................... 39
SECTION 303. Execution, Authentication, Delivery and Dating.............. 39
SECTION 304. Temporary Securities........................................ 41
SECTION 305. Registration, Registration of Transfer and Exchange......... 41
SECTION 306. Book-Entry Provisions for Global Securities................. 42
SECTION 307. Transfer Provisions......................................... 44
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities............ 53
SECTION 309. Payment of Interest; Interest Rights Preserved.............. 53
SECTION 310. Persons Deemed Owners....................................... 55
vi
SECTION 311. Cancellation................................................ 55
SECTION 312. Computation of Interest..................................... 55
SECTION 313. CUSIP Numbers............................................... 55
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture..................... 56
SECTION 402. Application of Trust Money.................................. 57
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default........................................... 57
SECTION 502. Acceleration of Maturity; Rescission and Annulment.......... 60
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.................................................... 62
SECTION 504. Trustee May File Proofs of Claim............................ 63
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................................. 64
SECTION 506. Application of Money Collected.............................. 64
SECTION 507. Limitation on Suits......................................... 65
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest............................................... 66
SECTION 509. Restoration of Rights and Remedies.......................... 66
SECTION 510. Rights and Remedies Cumulative.............................. 66
SECTION 511. Delay or Omission Not Waiver................................ 66
SECTION 512. Control by Holders.......................................... 67
SECTION 513. Waiver of Past Defaults..................................... 67
SECTION 514. Waiver of Stay or Extension Laws............................ 67
SECTION 515. Undertaking for Costs....................................... 67
SECTION 516. Nonrecourse Against the Trust or its Subsidiaries........... 68
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities......................... 68
SECTION 602. Notice of Defaults.......................................... 69
SECTION 603. Certain Rights of Trustee................................... 70
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
Securities................................................. 71
SECTION 605. May Hold Securities......................................... 72
SECTION 606. Money Held in Trust......................................... 72
SECTION 607. Compensation and Reimbursement.............................. 72
SECTION 608. Corporate Trustee Required; Eligibility..................... 73
SECTION 609. Resignation and Removal; Appointment of Successor........... 73
vii
SECTION 610. Acceptance of Appointment by Successor...................... 75
SECTION 611. Merger, Conversion, Consolidation or Succession to Business. 76
SECTION 612. Appointment of Authenticating Agent......................... 76
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders................ 78
SECTION 702. Reports by Trustee.......................................... 78
SECTION 703. Reports by the Trust........................................ 79
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Trust May Consolidate, Etc., Only on Certain Terms.......... 80
SECTION 802. Successor Substituted....................................... 81
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.......... 81
SECTION 902. Supplemental Indentures with Consent of Holders............. 83
SECTION 903. Execution of Supplemental Indentures........................ 84
SECTION 904. Effect of Supplemental Indentures........................... 84
SECTION 905. Conformity with Trust Indenture Act......................... 84
SECTION 906. Reference in Securities to Supplemental Indentures.......... 84
SECTION 907. Notice of Supplemental Indentures........................... 85
SECTION 908. Payment for Consent......................................... 85
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, Interest............ 85
SECTION 1002. Maintenance of Office or Agency............................ 85
SECTION 1003. Money for Security Payments to Be Held in Trust............ 86
SECTION 1004. Existence.................................................. 87
SECTION 1005. Payment of Taxes and Other Claims.......................... 87
SECTION 1006. Maintenance of Properties.................................. 88
SECTION 1007. Insurance.................................................. 88
SECTION 1008. Statement by Officers As to Default........................ 88
SECTION 1009. Provision of Financial Statements.......................... 89
SECTION 1010. Limitation on Indebtedness................................. 89
SECTION 1011. Limitation on Restricted Payments.......................... 90
viii
SECTION 1012. Limitation on Issuances and Sales of Capital Stock
of Restricted Subsidiaries................................ 94
SECTION 1013. Limitation on Dividends from the Bank and Its
Subsidiaries.............................................. 95
SECTION 1014. Limitation on Transactions with Affiliates................. 95
SECTION 1015. Limitation on Liens........................................ 97
SECTION 1016. Restriction on Transfer of Assets to Subsidiaries.......... 97
SECTION 1017. Limitation on Asset Sales.................................. 97
SECTION 1018. Limitation on Restricted Subsidiaries...................... 98
SECTION 1019. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.......................... 98
SECTION 1020. Required Stock Ownership................................... 99
SECTION 1021. Purchase of Securities upon a Change of Control............ 99
SECTION 1022. Obtaining a Rating on the Securities....................... 100
SECTION 1023. Payment of Tax Sharing Payment............................. 100
SECTION 1024. Amendments, Etc............................................ 101
SECTION 1025. Waiver of Certain Covenants................................ 101
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption........................................ 101
SECTION 1102. Applicability of Article................................... 102
SECTION 1103. Election to Redeem; Notice to Trustee...................... 102
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.......... 102
SECTION 1105. Notice of Redemption....................................... 102
SECTION 1106. Deposit of Redemption Price................................ 103
SECTION 1107. Securities Payable on Redemption Date...................... 103
SECTION 1108. Securities Redeemed in Part................................ 104
ARTICLE TWELVE
SECURITY AND PLEDGE OF COLLATERAL
SECTION 1201. Grant of Security Interest................................. 104
SECTION 1202. Secured Obligations........................................ 105
SECTION 1203. Delivery, Investment and Release of Collateral............. 105
SECTION 1204. Delivery and Holding of Collateral......................... 109
SECTION 1205. Representations, Warranties and Covenants.................. 110
SECTION 1206. Further Assurances......................................... 112
SECTION 1207. Dividends; Voting Rights; Etc.............................. 112
SECTION 1208. Trustee Appointed Attorney-in-Fact......................... 114
SECTION 1209. Trustee May Perform........................................ 114
SECTION 1210. Remedies upon Event of Default............................. 114
SECTION 1211. Application of Proceeds.................................... 115
ix
SECTION 1212. Continuing Lien; Termination............................... 116
SECTION 1213. Certificates and Opinions.................................. 116
SECTION 1214. Additional Covenants of the Trust.......................... 118
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Trust's Option to Effect Defeasance or Covenant Defeasance.. 119
SECTION 1302. Defeasance and Discharge.................................... 120
SECTION 1303. Covenant Defeasance......................................... 120
SECTION 1304. Conditions to Defeasance or Covenant Defeasance............. 121
SECTION 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Other Miscellaneous Provisions......... 123
SECTION 1306. Reinstatement............................................... 123
ARTICLE FOURTEEN
SUBSTITUTION OF NEW OBLIGOR
SECTION 1401. Substitution of Obligor Under the Indenture................. 124
SECTION 1402. Supplemental Indenture...................................... 126
TESTIMONIUM
SIGNATURES AND SEALS
EXHIBITS
Exhibit A - Form of Securities, Trustee's Certificate of Authentication
Exhibit B - Form of Certificate to Be Delivered upon Termination of
Restricted Period
Exhibit C - Form of Certificate to Be Delivered in Connection with Transfers
to Non-QIB Institutional Accredited Investors
Exhibit D - Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S
Exhibit E - Form of Rule 144A Certificate
Exhibit F - Form of Subordination Agreement
INDENTURE, dated as of March 25, 1998 between ▇.▇. ▇▇▇▇ REAL ESTATE
INVESTMENT TRUST, an unincorporated business trust existing and operating under
a declaration of trust governed by the laws of the State of Maryland (herein
called the "Trust"), having its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Chevy Chase, Maryland, and Norwest Bank Minnesota, National Association, a
national bank duly organized and existing under the laws of the United States,
Trustee (herein called the "Trustee").
RECITALS OF THE TRUST
The Trust has duly authorized the creation of an issue of 9 3/4%
Senior Secured Notes due 2008 (herein called the "Initial Securities") and 9
3/4% Series B Senior Secured Notes due 2008 (the "Exchange Securities" and,
together with the Initial Securities, the "Securities"), of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Trust has
duly authorized the execution and delivery of this Indenture.
Upon the issuance of the Exchange Securities , if any, or the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture will be subject to the provisions of the Trust Indenture Act of 1939,
as amended, that are required to be part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
The Securities will be nonrecourse obligations of the Trust, and the
sole recourse for the collection of principal, premium, if any, and interest on
the Securities will be against the Pledged Bank Stock (as defined herein) and
the other Collateral (as defined herein).
All things necessary have been done to make the Securities, when
executed by the Trust and authenticated and delivered hereunder and duly issued
by the Trust, the valid obligations of the Trust and to make this Indenture a
valid agreement of the Trust, in accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
2
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-
liquidating paper", as used in TIA Section 311, shall have the meanings
assigned to them in the rules of the Commission adopted under the Trust
Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Twelve, are defined in that
Article.
"Accumulated Interest" means, as of any date of determination and
without duplication, the aggregate amount of interest on the Securities paid or
accrued since March 25, 1998.
"Acquired Indebtedness" means Indebtedness of a Person (a) existing at
the time such Person becomes a Subsidiary of any other Person or (b) assumed in
connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary of such other Person or such acquisition. Acquired
Indebtedness shall be deemed to be incurred on the date of the related
acquisition of assets from any Person or the date the acquired Person becomes a
Subsidiary of such other Person.
3
"Act", when used with respect to any Holder, has the meaning specified
in Section 105.
"Additional Interest" has the meaning specified in Section 502.
"Advisory Fees" means fees pursuant to that certain Amended and
Restated Advisory Contract, dated as of October 1, 1992, between ▇.▇. ▇▇▇▇
Company and the Trust, as most recently amended by Amendment No. 8 thereto dated
as of October 1, 1993, as the same may be further amended or supplemented in
accordance with Section 1014.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person and any legal or beneficial
owner, directly or indirectly, of 20% or more of the Voting Stock of such
specified Person. Notwithstanding the foregoing, no Securitization Entity shall
be deemed an Affiliate of the Bank or the Trust or any of their Subsidiaries.
The fact that an Affiliate of any specified Person is a partner (or a
shareholder, director or officer of a partner) of a law firm that renders
services to such specified Person or its Affiliates does not mean that the law
firm is an Affiliate of 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.
"Agent Member" has the meaning specified in Section 306.
"Applicable Premium" means, with respect to a Security, the greater of
(i) 1.0% of the then outstanding principal amount of such Security and (ii) (a)
the present value of all remaining required interest and principal payments due
on such Security and all premium payments relating thereto assuming a redemption
date of April 1, 2003, computed using a discount rate equal to the Treasury Rate
plus 50 basis points minus (b) the then outstanding principal amount of such
Security minus (c) accrued and unpaid interest paid on the date of redemption.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of (a) any
Capital Stock of any Restricted Subsidiary; (b) all or substantially all of the
properties and assets of any division or line of business of the Trust or its
Restricted Subsidiaries; or (c) any other properties or assets of the Trust or
any Restricted Subsidiary other than in the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include any
transfer of properties or assets or Capital Stock (i) that is governed by the
provisions of Article Eight, (ii) of the Trust or any of its Restricted
4
Subsidiaries to the Trust or any Single Asset Subsidiary, (iii) in compliance
with Section 1011 or (iv) that is governed by the provisions of Article
Fourteen.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Available Amount" has the meaning set forth in the definition of
"Bank Contribution."
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (a) the sum of the products of (i) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment (including, without limitation, any sinking fund requirements) of such
Indebtedness multiplied by (ii) the amount of each such principal payment by (b)
the sum of all such principal payments.
"Bank" means Chevy Chase Bank, F.S.B., a federally chartered savings
bank and a controlled subsidiary of the Trust.
"Bank Collateral Account" means the Bank Collateral Account
established by the Trust pursuant to Section 1204(b).
"Bank Common Stock" means the Bank Stock and any other class or series
of capital stock of the Bank not preferred to the Bank Stock as to dividends or
distributions on the liquidation of the Bank or both.
"Bank Contribution" means, as of any date of determination, the dollar
amount, if any, by which (a) the aggregate amount of all dividends paid by the
Bank to the Trust since October 1, 1997, exceeds (b) the sum of (i) Accumulated
Interest, multiplied by (1 (one) - the Bank Tax Rate), plus (ii) 50% of the
difference of (A) 80% of the cumulative Consolidated Bank Net Income (Loss)
since October 1, 1997, minus (B) the amount determined pursuant to clause (b)(i)
of this definition, minus (iii) the Bank Stock Purchase Amount; provided,
however, that if at any time between October 1, 1997 and the date of
determination of the Bank Contribution, the Trust shall own more or less than
80% of the outstanding common stock of the Bank, the Bank Contribution shall be
calculated for each period of varying ownership as set forth in this definition
by substituting the percentage ownership of common stock of the Bank for the 80%
in clause (b)(ii)(A) of this definition; provided further that if the amount in
clause (b) exceeds the amount in clause (a), the absolute value of such excess
shall be referred to herein as the "Available Amount."
"Bank Contribution Collateral" has the meaning set forth in Section
1203(d).
5
"Bank Contribution Collateral Account" means the Bank Contribution
Collateral Account established by the Trust pursuant to Section 1204(b).
"Bank Stock" means the common stock, par value $1.00 per share, of the
Bank.
"Bank Stock Purchase Amount" means, as of the date of determination,
the aggregate amount paid by the Bank and its Subsidiaries since March 25, 1998
(other than in shares of Qualified Capital Stock of the Bank) to purchase,
redeem or otherwise acquire or retire for value any shares of Qualified Capital
Stock of the Bank pursuant to paragraph (b)(x) of Section 1011.
"Bank Tax Rate" means the weighted average combined effective state
and federal tax rate for the Bank for the period from March 25, 1998 to the
Substitution Date, determined as if the Bank were a stand alone taxpayer.
"Board of Trustees" means either the board of trustees of the Trust or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Trust to have been duly adopted by
the Board of Trustees and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in Minneapolis,
Minnesota, Chevy Chase, Maryland, or The City of New York are authorized or
obligated by law or executive order to close.
"Capital Maintenance Agreement" means the May 17, 1988 Agreement
between ▇.▇. ▇▇▇▇ Real Estate Investment Trust, the ▇.▇. ▇▇▇▇ Company and the
FDIC (as successor to the Federal Savings and Loan Insurance Corporation) under
which the ▇▇▇▇ Company and the Trust agreed to maintain the Bank's regulatory
capital at the levels prescribed by applicable regulatory requirements or any
similar agreement required by the FDIC (including in connection with the
Substitution or the subsequent distribution of the Capital Stock of the New
Obligor by the Trust or any owner of Capital Stock of the Trust) or any
guarantee of a capital plan that is submitted by the Bank pursuant to applicable
law.
"Capital Stock" in any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents or
interests in (however designated) capital stock in such Person, including, with
respect to a corporation, common stock, Preferred Stock and other corporate
stock, with respect to a trust, shares or other evidence of beneficial
interests, and, with respect to a partnership, partnership interests, whether
general or limited, and any rights (other than debt securities convertible into
corporate
6
stock, partnership interests or other capital stock), warrants or options
exchangeable for or convertible into such corporate stock, partnership interests
or other capital stock.
"Capitalized Lease Obligation" means, with respect to any Person, any
obligation of such Person under a lease of (or other agreement conveying the
right to use) any property (whether real, personal or mixed) that is required to
be classified and accounted for as a capital lease obligation under GAAP, and,
for the purpose of this Indenture, the amount of such obligation at any date
shall be the capitalized amount thereof at such date, determined in accordance
with GAAP.
"Cash Equivalents" means (a) cash; (b) any evidence of Indebtedness
with a maturity of 180 days or less issued or directly and fully guaranteed or
insured by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (c) certificates of deposit, time deposits,
deposits in money market accounts or any other deposit accounts or acceptances
with a maturity of 180 days or less of any financial institution that is a
member of the Federal Reserve System that issues (or the parent of which issues)
commercial paper or certificates of deposit rated as described in clause (d)
below and that has combined capital and surplus and undivided profits of not
less than $500,000,000; (d) commercial paper with a maturity of 180 days or less
issued by a corporation that is not an Affiliate of the Trust and is organized
under the laws of any state of the United States or the District of Columbia and
rated at least A-1 by S&P or at least P-l by Moody's; and (e) Partnership Units
and Margin Securities; provided that for purposes of Section 1017, Cash
Equivalents will also include (i) the assumption of Indebtedness of the Trust or
any Restricted Subsidiary by the purchaser of the assets sold and the release of
the Trust or such Restricted Subsidiary from all liability on such Indebtedness
in connection with the subject Asset Sale, (ii) securities received by the Trust
or any Restricted Subsidiary from the transferee that can be promptly converted
by the Trust or such Restricted Subsidiary into cash, (iii) limited partnership
interests in real estate partnerships that can be converted promptly and at will
by the holder of such interests into cash or Margin Securities and (iv) a
promissory note from the purchaser of the asset sold, provided that such note is
secured by a first priority perfected security interest in the asset sold and
provided further that such note is converted into Cash Equivalents of a type
referred to in clauses (a) through and including (e) of this definition within
one year after the date of the Asset Sale giving rise thereto.
"Cash Flow--Indenture" means with respect to the Trust, for any
period, all as determined in accordance with GAAP and without duplication, the
sum of the following items for such period: (a) real estate operating income
(loss), plus (b) depreciation and amortization expense, plus (c) interest
expense, plus (d) equity in losses of partnership investments, less (e) equity
in earnings of partnership investments, plus (f) losses on sales of property,
less (g) gains on sales of property, plus (h) non-cash charges, less (i) non-
cash gains, plus (j) cash distributions received from partnership investments,
plus (k) tax sharing payments paid by the Bank to the Trust, plus (l) dividends
paid by the Bank to the Trust.
7
"CCPCC" means Chevy Chase Preferred Capital Corporation, a Maryland
corporation.
"CCPCC Preferred Stock" means the 3,000,000 shares of 10 3/8%
Noncumulative Exchangeable Preferred Stock, Series A of CCPCC.
"Certificates of Deposit" means certificates of deposit or acceptances
with a maturity of 180 days or less of any financial institution that, in the
case of any book-entry certificates of deposit, is organized under the laws of
the State of New York, that (a) is a member of the Federal Reserve System; (b)
has combined capital and surplus and undivided profits of not less than
$500,000,000; (c) is not an Affiliate of the Trust; and (d) has (or the parent
of which has) a short-term rating of at least A-1 by S&P and at least P-1 by
Moody's.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of Voting Stock representing more than 50% of the voting power of
the Voting Stock of the Trust; (b) the Trust consolidates with, or merges with
or into, another Person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any Person, or
any Person consolidates with, or merges with or into, the Trust, in any such
event pursuant to a transaction in which any Voting Stock of the Trust is
reclassified or changed into or exchanged for cash, securities or other
property, other than any such transaction where (i) any Voting Stock of the
Trust is reclassified or changed into or exchanged for Voting Stock (other than
Redeemable Capital Stock) of the surviving or transferee corporation and (ii)
immediately after such transaction no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
Holders, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the voting power of the total Voting
Stock of the surviving or transferee corporation; (c) during any consecutive
two-year period (or, in the case of the New Obligor, the period since the
Substitution Date if shorter than two years), individuals who at the beginning
of such period constituted the Board of Trustees of the Trust (together with any
new trustees whose election by such Board of Trustees or whose nomination for
election by the stockholders of the Trust was approved by a vote of 66 2/3% of
the trustees then still in office who were either trustees at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of Trustees
of the Trust then in office; or (d) any final order, judgment or decree of a
court of competent jurisdiction shall be entered against the Trust decreeing the
dissolution or liquidation of the Trust.
8
"Closing Date" means the date on which the Securities are originally
issued under the Indenture.
"Collateral" has the meaning specified in Section 1201.
"Collateral Value" means, as of any date of determination, (a) for
cash, the amount thereof and (b) for Certificates of Deposit and U.S. Government
Securities, the principal amount thereof.
"Commission" means the U.S. 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 Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Consolidated Bank Net Income (Loss)" means, for any period, the
consolidated net income (or loss) of the Bank and its consolidated Subsidiaries
for such period as determined in accordance with GAAP (net of cash and non-cash
dividends due (whether or not declared) on outstanding (excluding treasury
stock) Redeemable Capital Stock or outstanding (excluding treasury stock)
Preferred Stock of the Bank), adjusted, to the extent included in calculating
such net income (loss), by excluding, without duplication, (i) all extraordinary
gains and losses (other than those relating to the use of net operating losses
of the Bank carried forward), less all fees and expenses relating thereto, net
of taxes, (ii) the portion of net income (or loss) of any Person (other than the
Bank and any of its consolidated Subsidiaries) in which the Bank or any of its
Subsidiaries has an ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to the Bank or its consolidated
Subsidiaries in cash by such other Person during such period, (iii) net income
(or loss) of any Person combined with the Bank or any of its Subsidiaries on a
"pooling of interests" basis attributable to any period prior to the date of
combination, (iv) any gain or loss, net of taxes, realized upon the termination
of any employee pension benefit plan or (v) the net income of any Subsidiary of
the Bank to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulations applicable to that Subsidiary or its shareholders; provided that,
upon the termination or expiration of such dividend or distribution
restrictions, the portion of net income (or loss) of such Subsidiary allocable
to the Bank and previously excluded shall be added to the Consolidated Bank Net
Income (Loss) of the Bank to the extent of the amount of dividends or other
distribution actually paid to the Bank in cash by such Subsidiary.
"Consolidated Interest Expense" means, with respect to the Trust, for
any period, the amount, as determined in accordance with GAAP, of interest
expense of the Trust and its Restricted Subsidiaries (excluding all amounts
relating to interest expense of the Bank and its Subsidiaries).
9
"Consolidated Net Income (Loss)" of the Trust means, for any period,
the consolidated net income (or loss) of the Trust and its consolidated
Restricted Subsidiaries for such period as determined in accordance with GAAP,
adjusted, to the extent included in calculating such net income (loss), by
excluding, without duplication, (i) all extraordinary gains and losses (other
than those relating to the use of net operating losses of the Trust carried
forward), less all fees and expenses relating thereto, net of taxes, (ii) the
portion of net income (or loss) of any Person (other than the Trust and any of
its consolidated Restricted Subsidiaries) in which the Trust or any of its
Restricted Subsidiaries has an ownership interest, except to the extent of the
amount of dividends or other distributions actually paid to the Trust or its
consolidated Restricted Subsidiaries in cash by such other Person during such
period, (iii) net income (or loss) of any Person combined with the Trust or any
of its Restricted Subsidiaries on a "pooling of interest" basis attributable to
any period prior to the date of combination, (iv) any gain or loss, net of
taxes, realized upon the termination of any employee pension benefit plan, (v)
the net income of any Restricted Subsidiary of the Trust (other than the Bank
and its Subsidiaries) to the extent that the declaration or payment of dividends
or similar distributions by that Restricted Subsidiary of that income is not at
the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgement, decree, order, statute, rule or
governmental regulations applicable to that Restricted Subsidiary or its
shareholders; provided that, upon the termination or expiration of such dividend
or distribution restrictions, the portion of net income (or loss) of such
Restricted Subsidiary allocable to the Trust and previously excluded shall be
added to the Consolidated Net Income (Loss) of the Trust to the extent of the
amount of dividends or other distributions actually paid to the Trust in cash by
such Restricted Subsidiary and (vi) all gains resulting from the sale of credit
card relationships.
"Consolidated Net Worth" means, at any date and with respect to any
Person, the consolidated shareholders' equity of such Person, less the amount of
shareholders' equity attributable to (i) Redeemable Capital Stock or treasury
stock of such Person and its Restricted Subsidiaries (or, in the case of the
Bank, a Surviving Entity or the Pledged Subsidiary resulting from a merger, such
Person and its Subsidiaries), determined on a consolidated basis in accordance
with GAAP, and (ii) in the case of the Trust, extraordinary gains and any gains
resulting from the sale, transfer or other disposition of Partnership Units,
other than Partnership Units that are acquired after the date of the Indenture
as a result of contributing real property to ▇▇▇▇ Holdings Partnership.
"Consolidated Tax Subsidiary" means any Subsidiary of any Person that
joins with such Person in the filing of a consolidated federal income tax
return.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at Norwest Center, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, except that with respect to
10
presentation of Securities for payment or for registration of transfer or
exchange, such term shall mean the office or agency of the Trustee at which, at
any particular time, its corporate agency business shall be conducted, which
agency at the date of execution of this Indenture is Norwest Trust Company c/o
The Depository Trust Company, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
"Corporation" includes corporations, associations, companies and
business trusts.
"Currency Agreements" means any spot or forward foreign exchange
agreements and currency swap, currency option or other similar financial
agreements or arrangements entered into by the Trust or any of its Restricted
Subsidiaries and designed to protect against or manage exposure to fluctuations
in foreign currency exchange rates.
"Custodian" means (i) Bankers Trust Company or (ii) another financial
institution in the State of New York reasonably acceptable to the Trustee, that
(a) is a "securities intermediary" within the meaning of Section 8-
102(a)(14) of the UCC as in effect in the State of New York whose
"jurisdiction" for purposes of Section 8-110(e) of the UCC as in effect in
the State of New York is the State of New York,
(b) issues (or whose parent issues) commercial paper or certificates
of deposit rated as described in clause (d) of the definition of Cash
Equivalent,
(c) has combined capital and surplus and undivided profits of not less
than $500,000,000,
(d) enters into a Custodian Agreement, and
(e) enters into an agreement pursuant to which the Trustee has
"control" within the meaning of Section 8-106(d) of the UCC as in effect in
the State of New York with respect to the applicable Custodian Account and
the related Securities Entitlements and other property held in such
Custodian Account.
"Custodian Account" means one or more Custodian Accounts established
under and as defined in the Custodian Agreements, including the Bank
Contribution Collateral Account, the Bank Collateral Account and the Tax Payment
Collateral Account (or any sub-account of a Custodian Account).
"Custodian Agreement" means the Custodian Account Agreement dated as
of March 24, 1998 between the Trust and Bankers Trust Company or another
custodian agreement with Bankers Trust Company or another Custodian on similar
terms.
11
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 309.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Disinterested Trustee" means, with respect to any transaction or
series of related transactions, a member of the Board of Trustees of the Trust
or a member of the board of directors of any successor corporation who does not
have any material direct or indirect financial interest in or with respect to
such transaction or series of related transactions.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means an offer by the Trust to exchange the Initial
Securities for notes registered under the Securities Act, with terms identical
to the Securities (except such notes will not contain (i) transfer restrictions
or (ii) certain provisions relating to the increase in the interest rate of such
notes), pursuant to the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Exchange Securities" has the meaning stated in the first recital of
this Indenture and refers to any Exchange Securities containing terms
substantially identical to the Initial Securities (except that such Exchange
Securities shall be registered under the Securities Act and will not contain (i)
transfer restrictions or (ii) certain provisions relating to the increase in the
interest rate of such Exchange Securities) that are issued and exchanged for the
Initial Securities pursuant to the Registration Rights Agreement and this
Indenture.
"Fair Market Value" means the fair market value of property as
determined in good faith by the Board of Trustees, whose determination shall be
conclusive in all circumstances, net of attorney's fees, accountant's fees and
brokerage, consulting, underwriting and other fees and expenses actually
incurred in connection with a transaction and net of taxes paid or payable by
the Trust as a result thereof.
"FDIA" means the Federal Deposit Insurance Act, 12 U.S.C. Sections
1811-1833, as amended from time to time.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
12
"Federal Bankruptcy Code" means the Bankruptcy Code of Title 11 of the
United States Code, as amended from time to time.
"Financial Asset" shall have the meaning set forth in Section 8-
102(a)(9) of the UCC as in effect in the State of New York.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied.
"General Capital Requirement" means the minimum amount of capital
required to meet each of the industry-wide regulatory capital requirements
applicable to the Bank pursuant to 12 U.S.C. Section 1464(t) and 12 C.F.R.
Section 567 (and any amendment to either thereof) or any successor law or
regulation (but excluding any higher individual minimum capital requirement
imposed on the Bank pursuant to 12 U.S.C. Section 1464(s) and 12 C.F.R. Section
567.3 (and any amendment to either thereof) or any successor law or regulation).
"Global Securities" has the meaning set forth in Section 201.
"Guaranteed Indebtedness" of any Person means, without duplication,
all Indebtedness of any other Person guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly by such
Person through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (ii)
to purchase, sell or lease (as lessee or lessor) property, or to purchase or
sell services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness or to assure the holder of such Indebtedness against loss,
(iii) to supply funds to, or in any other manner invest in, the debtor
(including any agreement to pay for property or services without requiring that
such property be received or such services be rendered), (iv) to maintain
working capital or equity capital of the debtor, or otherwise to maintain the
net worth, solvency or other financial condition of the debtor or (v) otherwise
to assure a creditor with respect to Indebtedness against loss; provided that
the term "guarantee" shall not include endorsements for collection or deposit,
in either case in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all liabilities of such Person for borrowed money (including overdrafts) or
for the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities incurred in the ordinary course
of business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit and
acceptances issued under letter of credit facilities, acceptance facilities or
other similar
13
facilities, and in connection with any agreement by such Person to make payment
to purchase, redeem, exchange, convert or otherwise acquire for value any
Capital Stock of such Person now or hereafter outstanding, (b) all obligations
of such Person evidenced by bonds, notes, debentures or other similar
instruments, (c) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (d) all Capitalized Lease Obligations of such Person, (e) all
obligations of such Person under or in respect of Interest Rate Agreements or
Currency Agreements, (f) all Indebtedness referred to in (but not excluded from)
the preceding clauses (a) through (e) of other Persons and all dividends payable
by other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of such property or
asset or the amount of the obligation so secured), (g) all guarantees by such
Person of Guaranteed Indebtedness, (h) all Redeemable Capital Stock of such
Person valued at the greater of its book value and voluntary or involuntary
maximum fixed repurchase price plus accrued and unpaid dividends, and (i) any
amendment, supplement, modification, deferral, renewal, extension, refunding or
refinancing of any liability of the types referred to in clauses (a) through (h)
above. For purposes hereof, (x) the "maximum fixed repurchase price" of any
Redeemable Capital Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital Stock as if
such Redeemable Capital Stock were purchased on any date on which the amount of
outstanding Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the fair market
value of such Redeemable Capital Stock, such fair market value shall be
determined in good faith by the board of directors or similar governing body (or
any duly authorized committee thereof) of the issuer of such Redeemable Capital
Stock, and (y) Indebtedness is deemed to be incurred pursuant to a revolving
credit facility or any other facility providing for partial advances each time
an advance is made thereunder.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Initial Purchasers" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. and Friedman, Billings,
▇▇▇▇▇▇ & Co., Inc., as the initial purchasers of the Initial Securities pursuant
to the Purchase Agreement dated March 19, 1998 between such Persons and the
Trust.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
14
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Agreements" means any interest rate protection
agreements and other types of interest rate hedging agreements (including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements) designed to protect against or manage exposure to fluctuations in
interest rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee or other extension of credit or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase,
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP. "Investments" shall exclude
(i) extensions of trade credit on commercially reasonable terms in accordance
with normal trade practices and (ii) advances to customers in the ordinary
course of business that are (x) recorded as accounts receivable on the balance
sheet of the Trust or its Restricted Subsidiaries or (y) after the Substitution,
credit card loans, home equity loans, automobile loans, leases or installment
sales contracts, other consumer receivables, mortgage loans or mortgage notes
owned by a Restricted Subsidiary of the New Obligor.
"Investment Property" shall have the meaning set forth in Section 9-
115(1)(f) of the UCC.
"knowledge" when used with respect to the Trust, is effective for a
particular event from the time when it is brought to the attention of a director
or a vice president or a more senior officer of the Trust, and in any event from
the time when the event would have been brought to the attention of a director
or a vice president or a more senior officer of the Trust if the Trust had
exercised due diligence; the Trust exercises due diligence for purposes of this
definition if it maintains reasonable methods for communicating significant
information to officers and directors of the Trust and there is reasonable
compliance with the methods.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. A Person shall be deemed to own subject to a Lien
any property that such Person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Management Agreements" means (a) the Amended and Restated Commercial
Property Leasing and Management Agreement dated as of October 1, 1982, as
amended,
15
between the Trust and Franklin Property Company relating to the leasing and
management of real property owned by the Trust and its subsidiaries (other than
the Bank and its Subsidiaries) other than their hotel properties, and (b) any
written hotel management agreement between a subsidiary of the Trust and
Franklin Property Company relating to the management of such hotel properties
entered into in the ordinary course of business and consistent with past
practice, in each case as further amended or modified in accordance with the
terms of this Indenture.
"Margin Securities" means "margin stock" as defined in Regulation G
(12 C.F.R. Section 207, as amended) of the Board of Governors of the Federal
Reserve System prior to April 1, 1998 and, on and after April 1, 1998, means
"Margin Stock" as defined in Regulation U (12 C.F.R. Section 221.2, as amended,
or any successor provision); provided that the term "Margin Securities" shall
not include the securities of an Affiliate of the Trust, other than common stock
of ▇▇▇▇ Centers, Inc. and the common stock of Persons less than 20% of the
outstanding common stock of which is held by the Trust or its Affiliates.
"Market Value" means, as of any date of determination,
(i) with respect to cash, the amount thereof; and
(ii) with respect to a U.S. Government Security or Certificate of
Deposit, the principal amount thereof;
"Material Subsidiary" means, at any particular time, (i) any
Restricted Subsidiary of the Trust that, together with the Restricted
Subsidiaries of such Restricted Subsidiary, (a) accounted for more than 10% of
the consolidated revenues or earnings of the Trust and its Restricted
Subsidiaries for the most recently completed fiscal year of the Trust, (b) was
the owner of more than 10% of the consolidated assets of the Trust and its
Restricted Subsidiaries as of the end of such fiscal year (in the case of clause
(a) or clause (b) as shown on the consolidated financial statements of the Trust
and its Restricted Subsidiaries for such fiscal year) or (c) was organized or
acquired since the end of such fiscal year and would have been a Material
Subsidiary if it had been owned during such fiscal year, and (ii) the Bank.
"Maturity" means, with respect to any Security, the date on which any
principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or otherwise.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"New Obligor" has the meaning set forth in Section 1401.
16
"Nonrecourse Indebtedness" means Indebtedness incurred by any
Restricted Subsidiary of the Trust as to which, under the terms thereof (except
with respect to fraud, willful misconduct, intentional misrepresentation,
misapplication of funds, waste and undertakings with respect to environmental
matters), (i) neither the Trust nor any other Restricted Subsidiary of the Trust
provides credit support or is directly or indirectly liable for such
Indebtedness, (ii) enforcement of obligations on such Indebtedness is limited
only to recourse against interests in specified assets and properties owned by
such Restricted Subsidiary (the "Subject Assets"), accounts, rents, revenues and
proceeds arising therefrom, and rights under purchase agreements or other
agreements relating to such Subject Assets and (iii) no default with respect to
such Indebtedness would permit (upon notice, lapse of time or both) any holder
of other Indebtedness of the Bank or its Subsidiaries to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its Stated Maturity.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Officers' Certificate" means a certificate signed by (i) the Chairman
or Vice Chairman of the Board of Trustees, the President or any Vice President
of the Trust and (ii) the Treasurer, any Assistant Treasurer, the Secretary or
any Assistant Secretary of the Trust, and delivered to the Trustee by the terms
of this Indenture; provided that, in the event an officer of the Trust holds a
position set forth in clause (i) above and a position set forth in clause (ii)
above, such officer may sign an Officers' Certificate only in his capacity as
officer under either clause (i) or (ii) above, but not under both.
"Offshore Global Securities" has the meaning set forth in Section 201.
"Offshore Physical Securities" has the meaning set forth in Section
201.
"Offshore Security Exchange Date" has the meaning set forth in Section
202.
"Operating Cash Flow Coverage Ratio" means with respect to the Trust,
at any date of determination, the ratio of (i) Cash Flow - Indenture to (ii)
Consolidated Interest Expense.
"Opinion of Counsel" means a written opinion of counsel, who, except
as otherwise set forth in this Indenture, may be counsel for the Trust,
including an employee of the Trust, and who shall be acceptable to the Trustee.
"OTS" means the Office of Thrift Supervision or any successor thereto.
17
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Trust) in trust or set
aside and segregated in trust by the Trust (if the Trust shall act as its
own Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1302 and
1303, with respect to which the Trust has effected defeasance and/or
covenant defeasance as provided in Article Thirteen; and
(iv) Securities which have been paid pursuant to Section 308 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands the Securities are valid obligations of the Trust;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Trust or any other obligor upon the Securities or any Affiliate of the
Trust or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Trust or any
other obligor upon the Securities or any Affiliate of the Trust or such other
obligor.
"Partnership Units" means limited partnership interests in ▇▇▇▇
Holdings Partnership.
18
"Paying Agent" means any Person (including the Trust acting as Paying
Agent) authorized by the Trust to pay the principal of (and premium, if any, on)
or interest on any Securities on behalf of the Trust.
"Permitted Holders" means the descendants of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, any
of their spouses or any Person controlled, directly or indirectly, or
beneficially owned by such descendants or spouses.
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of the Trust under the Securities;
(b) Indebtedness of the Trust outstanding on the date of this
Indenture (other than the Trust's 11 5/8% Series B Senior Secured Notes due
2002);
(c) obligations of the Trust pursuant to Interest Rate Agreements
designed to protect the Trust against fluctuations in interest rates in
respect of Indebtedness of the Trust, which obligations do not exceed the
aggregate principal amount of such Indebtedness;
(d) Indebtedness of the Trust consisting of guarantees, indemnities or
obligations in respect of purchase price adjustments in connection with the
acquisition or disposition of assets;
(e) Indebtedness of the Trust that, together with any other
outstanding Indebtedness incurred pursuant to clause (d) of the definition
of "Permitted Subsidiary Indebtedness," has an aggregate principal amount
outstanding at any one time, without duplication, not in excess of the sum
of $80,000,000 plus 50% of the increase in Consolidated Net Worth of the
Trust from October 1, 1997;
(f) Indebtedness of the Trust consisting of guarantees under the
Reimbursement Agreement that, together with any other guarantees of
Indebtedness incurred pursuant to clause (g) of the definition of
"Permitted Subsidiary Indebtedness," do not exceed an aggregate amount
(without duplication) of $150,000,000 outstanding at any one time;
(g) Indebtedness of the Trust to any of its Wholly Owned Restricted
Subsidiaries, except that any transfer of such Indebtedness by any such
Subsidiary (other than to another such Subsidiary) will be deemed to be an
incurrence of Indebtedness by the Trust; provided that such Indebtedness is
subordinated in right of payment from and after such time as the Securities
shall become due and payable (whether at Stated Maturity, acceleration or
otherwise) to payment of the Securities pursuant to a subordination
agreement substantially in the form of Exhibit F;
19
(h) obligations of the Trust under the Capital Maintenance Agreement;
provided, however, that this clause (h) is not intended to include any
Indebtedness incurred by the Trust in connection with complying with its
obligations pursuant to such agreement; and
(i) any renewals, extensions, substitutions, refinancings or
replacements and any successive refinancings (each, for purposes of this
clause (i), a "refinancing") by the Trust of any Indebtedness of the Trust
referred to in clauses (b) or (e) of this definition and any Indebtedness
of the Trust incurred in accordance with Section 1010 (other than Permitted
Indebtedness), so long as (i) any such new Indebtedness shall be in a
principal amount that does not exceed the principal amount (or, if such
Indebtedness being refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination)
so refinanced, plus the amount of any premium required to be paid under the
terms of the instrument governing such Indebtedness being so refinanced or
the amount of any premium reasonably determined by the Trust as necessary
to accomplish such refinancing through means of a tender offer or privately
negotiated transaction (it being understood that any sales of the Retail
Notes will be considered a refinancing thereof to the extent that the total
principal amount of Retail Notes outstanding at any one time does not
exceed the principal amount thereof outstanding on the date of this
Indenture), (ii) in the case of any refinancing of Indebtedness that is
Subordinated Indebtedness, (A) such new Indebtedness is made subordinate to
the Securities at least to the same extent as the Subordinated Indebtedness
being refinanced and (B) such new Indebtedness has an Average Life to
Stated Maturity and final Stated Maturity of principal that exceeds the
Average Life to Stated Maturity and final Stated Maturity of the
Subordinated Indebtedness being refinanced); and (iii) in the case of any
refinancing of Trust Nonrecourse Indebtedness, such new Indebtedness is
made nonrecourse to the same extent as the Indebtedness refinanced;
provided that for purposes of determining whether additional Indebtedness
can be incurred pursuant to clause (e) above or clauses (d) and (e) of the
definition of "Permitted Subsidiary Indebtedness," any refinancing of
Indebtedness initially incurred pursuant to such clause (e) of this
definition and refinanced under this clause (i), or any further refinancing
thereof, will be considered to be outstanding under clause (e) of this
definition of "Permitted Indebtedness."
"Permitted Investment" means any Investment (i) in Cash Equivalents,
(ii) of up to $10,000,000 in Wholly Owned Restricted Subsidiaries, (iii) of up
to $50,000,000 in cash in Single Asset Subsidiaries, (iv) in consideration
received, not constituting Cash Equivalents, pursuant to an Asset Sale made in
compliance with Section 1017 in an aggregate amount of up to 25% of the
consideration received with respect to such Asset Sale, (v) in or by the Bank or
its Subsidiaries, (vi) permitted by Section 1016, (vii) constituting cash
advances on an intercompany open account basis (A) from the Trust to its
Restricted Subsidiaries required for working capital, the payment of interest
and premium, if any, on and principal of any
20
Indebtedness, expenditures for maintenance and capital improvements, and other
operating expenses, to the extent Restricted Subsidiaries have advanced cash to
the Trust or (B) from any Restricted Subsidiary to the Trust, of excess cash on
hand from time to time, in each case made in the ordinary course of business and
consistent with past practice or (viii) in any Wholly Owned Restricted
Subsidiary resulting from the acquisition of such Subsidiary for Qualified
Capital Stock of the Trust, such Subsidiary at the time of such acquisition
owning Qualified Capital Stock of the Bank and having no other assets in excess
of $1,000,000 and no operations.
"Permitted Subsidiary Indebtedness" means any of the following:
(a) Indebtedness of any Restricted Subsidiary outstanding on the date
of this Indenture;
(b) obligations of any Restricted Subsidiary pursuant to Interest Rate
Agreements designed to protect such Restricted Subsidiary against
fluctuations in interest rates in respect of Indebtedness of such
Restricted Subsidiary, which obligations do not exceed the aggregate
principal amount of such Indebtedness;
(c) Indebtedness of any Restricted Subsidiary of the Trust consisting
of guaranties, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets;
(d) Indebtedness of any Restricted Subsidiary that, together with any
other outstanding Indebtedness incurred pursuant to clause (e) of the
definition of "Permitted Indebtedness," has an aggregate principal amount
outstanding at any one time, without duplication, not in excess of the sum
of $80,000,000 plus 50% of the increase in Consolidated Net Worth of the
Trust from October 1, 1997;
(e) Nonrecourse Indebtedness of any Restricted Subsidiary which,
together with any other outstanding Indebtedness incurred pursuant to
clause (d) above and clause (e) of the definition of "Permitted
Indebtedness," has an aggregate principal amount
outstanding at any one time not in excess of the sum of $225,000,000 plus
50% of the increase in Consolidated Net Worth of the Trust from October 1,
1997; provided, however, that notwithstanding the definition of Nonrecourse
Indebtedness, an aggregate principal amount of Indebtedness permitted by
this clause (e) of up to the sum of $100,000,000 plus 50% of the increase
in Consolidated Net Worth of the Trust from October 1, 1997 may be incurred
without regard to clause (ii) of the definition of Nonrecourse Indebtedness
and without regard to any indirect credit support or direct or indirect
liability of any Restricted Subsidiary by way of any cross-
collateralization of assets;
21
(f) Indebtedness of any Wholly Owned Restricted Subsidiary (other than
the Bank and its Subsidiaries) to the Trust, to the extent permitted by
Section 1011, except that any transfer of any such Indebtedness by the
Trust to any other Person shall be deemed to be an incurrence of
Indebtedness by such Restricted Subsidiary;
(g) Indebtedness of Restricted Subsidiaries consisting of guarantees
under the Reimbursement Agreement that, together with any other guarantees
of Indebtedness incurred pursuant to clause (f) of the definition of
"Permitted Indebtedness," do not exceed an aggregate amount (without
duplication) of $150,000,000 at any one time outstanding; and
(h) any renewals, extensions, substitutions, refinancings or
replacements and any successive refinancings (each, for purposes of this
clause (h) a "refinancing") by any Restricted Subsidiary of any
Indebtedness of such Restricted Subsidiary referred to in clauses (a), (d)
and (e) of this definition, so long as (i) any such new Indebtedness shall
be in a principal amount that does not exceed the principal amount (or, if
such Indebtedness being refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination)
so refinanced, plus the amount of any premium required to be paid under the
terms of the instrument governing such Indebtedness being so refinanced or
the amount of any premium reasonably determined by such Restricted
Subsidiary as necessary to accomplish such refinancing through means of a
tender offer or privately negotiated transaction (it being understood that
any borrowings under lines of credit will be considered a refinancing
thereof to the extent that the total principal amount outstanding
thereunder at any one time does not exceed the principal amount thereof
outstanding on the date of the Indenture), and (ii) in the case of any
refinancing of Nonrecourse Indebtedness, such new Indebtedness is
Nonrecourse Indebtedness; provided that for purposes of determining whether
additional Indebtedness can be incurred pursuant to clauses (d) and (e) of
this definition or clause (e) of the definition of "Permitted
Indebtedness," any refinancing of Indebtedness initially incurred pursuant
to such clauses (d) and (e) of this definition and refinanced under this
clause (h), or any further refinancing thereof, will be considered to be
outstanding under clause (d) or (e) of this definition, as the case may be.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Securities" has the meaning set forth in Section 201.
"PIK Preferred Stock" means any and all payment-in-kind Preferred
Stock issued in lieu of cash dividends on the 13% Preferred Stock or in lieu of
cash dividends on such payment-in-kind Preferred Stock.
22
"Pledged Bank Stock" has the meaning specified in Section 1201(b).
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 308 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any and all
shares, interests, participation or other equivalents (however designated) of
such Person's preferred or preference stock or other equity interests having a
preference as to dividends or other distributions or on liquidation, whether now
outstanding or issued after the Closing Date, and including, without limitation,
all classes and series of preferred or preference stock of such Person.
"Private Placement Legend" means the legend initially set forth on the
Securities in the form set forth in Section 202(a)(i).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"Real Estate Property" means (i) real property, (ii) a building or
group of related buildings or (iii) real property upon which is located a
building or group of related buildings.
"Redeemable Capital Stock" means any class or series of Capital Stock
that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to the final Stated Maturity of the Securities or is redeemable at the option of
the holder thereof at any time prior to such final Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to such
final Stated Maturity at the option of the holder thereof.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, in whole or in part, means the price at which such Security (or
portion thereof) is to be redeemed pursuant to this Indenture.
23
"Registration Rights Agreement" means the Registration Rights
Agreement between the Trust and the Initial Purchasers dated as of March 25,
1998.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the March 15 or September 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act and any
successor provision.
"Regulatory Capital Requirements" means the minimum amount of capital
required for the Bank (i) to meet each capital ratio necessary for the Bank to
be classified as an "adequately capitalized" savings association pursuant to 12
U.S.C. Section 1831o and 12 C.F.R. Section 565 (and any amendment to either
thereof) or any successor law or regulation and (ii) to meet (x) each of the
industry-wide regulatory capital requirements applicable to the Bank pursuant to
12 U.S.C. Section 1464(t) and 12 C.F.R. Section 567 (and any amendment to either
thereof) or any successor law or regulation, or (y) such higher amount of
capital as the Bank, individually, is required to maintain in order to meet any
individual minimum capital standard applicable to the Bank pursuant to 12 U.S.C.
Section 1464(s) and 12 C.F.R. Section 567.3 (and any amendment to either such
Section) or any successor law or regulation.
"Reimbursement Agreement" means the Third Amended and Restated
Reimbursement Agreement dated as of October 1, 1997 among ▇▇▇▇ Holdings
Partnership and its subsidiary partnerships, the Trust and certain of its
Restricted Subsidiaries and affiliates, as such agreement may be further
amended, restated or supplemented; provided that the aggregate amount of the
contingent reimbursement obligations assumed by the Trust and its Restricted
Subsidiaries outstanding at any time under this agreement shall not exceed the
aggregate amount of $150,000,000.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above-designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means the Bank and its Subsidiaries, the New
Obligor and any other Subsidiary of the Trust that is not an Unrestricted
Subsidiary.
24
"Retail Notes" means the unsecured notes of the Trust sold from time
to time at varying interest rates with maturities of one to ten years.
"Rule 144A" means Rule 144A under the Securities Act and any successor
provision.
"S&P" means Standard & Poor's Ratings Group, a division of The ▇▇▇▇▇▇-
▇▇▇▇ Companies, Inc, and its successors.
"Sale Deficit Amount" has the meaning specified in Section 1203(f).
"▇▇▇▇ Holdings Partnership" means ▇▇▇▇ Holdings Limited Partnership, a
Maryland limited partnership.
"Secured Obligations" has the meaning specified in Section 1202.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture. For all purposes of this Indenture, the term "Securities"
shall include any Exchange Securities to be issued and exchanged for any Initial
Securities pursuant to the Registration Rights Agreement and this Indenture and,
for purposes of this Indenture, all Initial Securities and Exchange Securities
shall vote together as one series of Securities under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Intermediary" shall have the meaning set forth in Section
8-102(a)(14) of the UCC as in effect in the State of New York.
"Securitization Entity" means any pooling arrangement or entity
(except for any entity in corporate or partnership form) formed or originated
for the purpose of holding, and issuing securities representing interests in,
one or more pools of mortgages, leases, credit card receivables, home equity
loan receivables, automobile loans, leases or installment sales contracts, other
consumer receivables or other financial assets of the Bank or any Subsidiary of
the Bank, and shall include, without limitation, any grantor trust, owner trust
or real estate mortgage investment conduit or Financial Asset Securitization
Investment Trust ("FASIT").
"Security Entitlement" shall have the meaning set forth in Section
357.2 of the Treasury Regulations and Section 8-102(a)(17) of the UCC as in
effect in the State of New York, as the context may require or as otherwise is
appropriate.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
25
"Series B Preferred Stock" means the Bank's noncumulative Preferred
Stock, Series B, issuable in exchange for the CCPCC Preferred Stock outstanding
on the date of the Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement
"Single Asset Subsidiary" means any Wholly Owned Restricted Subsidiary
that owns no more than one Real Estate Property and owns no Investments other
than those permitted to such Subsidiary by Section 1018.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable, and, when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such Indebtedness, or
any installment of interest thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Trust that is
expressly, by the terms of the instrument creating or evidencing such
Indebtedness, subordinated in right of payment to the Securities.
"Subsidiary" with respect to any Person, means any other Person a
majority of the equity ownership or majority of the Voting Stock of which is at
the time owned, directly or indirectly, by such Person, or by one or more other
Subsidiaries of such Person or by such Person and one or more other Subsidiaries
of such Person.
"Substitution" has the meaning set forth in Section 1401.
"Substitution Date" means the date that the New Obligor assumes the
obligations of the Trust under this Indenture and the Securities (as amended as
described in Section 1402) and becomes the direct holder of the outstanding
common stock and Voting Stock of the Bank owned by the Trust, all in accordance
with the provisions of this Indenture.
"Surviving Entity" has the meaning set forth in Section 801.
"Tax Collateral" has the meaning set forth in Section 1023(a).
"Tax Payment Collateral" has the meaning set forth in Section 1203(c).
26
"Tax Payment Collateral Account" means the Tax Payment Collateral
Account established by the Trust pursuant to Section 1204(b).
"Tax Sharing Agreement" means (i) the Tax Sharing Agreement dated June
28, 1990, as amended, between the Trust and other members of the affiliated
group of corporations joining with the Trust in the filing of a consolidated
federal income tax return (the "Affiliated Group"), as such Tax Sharing
Agreement may be further amended or modified from time to time, provided that
(A) such further amendments or modifications reflect only the addition or
deletion of parties to such Tax Sharing Agreement, legislative, judicial or
administrative changes in the provisions, rules, application or effect of the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
promulgated under the Code (the "Regulations") or applicable state law, or
amendments or modifications, requested, required or approved by the OTS and (B)
any such further modification or amendment is approved by the OTS, to the extent
such approval is required by the rules and regulations of the OTS, and (ii) any
other tax sharing agreement to which the Trust or any Consolidated Tax
Subsidiaries may become a party, provided that such other tax sharing agreement
(A) consistently reflects the applicable tax liabilities of, and the benefit of
the use of losses, deductions, credits and other tax attributes by, the Trust
and the other members of the Affiliated Group pursuant to the Code, the
Regulations and applicable state law (except as otherwise may be requested,
required or approved by the OTS or required for compliance with any guidelines,
orders or other authority issued by the OTS) and (B) is approved by the OTS, to
the extent such approval is required by the rules and regulations of the OTS,
and provided further that the Trust shall have received an opinion of
independent counsel to the Trust or of a nationally recognized accounting firm
to the effect that such other tax sharing agreement satisfies the condition in
subclause (A) of the first proviso of this clause (ii) and that such other tax
sharing agreement is not materially less beneficial to the Bank or the Trust,
unless, with respect to the Trust, otherwise required by the OTS, than the tax
sharing agreement described in clause (i).
"Tax Sharing Payment" means any payment made pursuant to the Tax
Sharing Agreement.
"13% Preferred Stock" means the 3,000,000 shares of the 13%
Noncumulative Perpetual Preferred Stock, Series A of the Bank.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two Business Days prior to the date
fixed for repayment (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the then
remaining term to April 1, 2003; provided, however, that if the then remaining
term to April 1, 2003 is not equal to the constant maturity of a United States
Treasury security for which a weekly average yield is given, the Treasury Rate
shall be obtained by linear interpolation (calculated to the nearest one-twelfth
of a year) from the
27
weekly average yields of United States Treasury securities for which such yields
are given, except that if the then remaining term to April 1, 2003 is less than
one year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
"Trust" means the Person named as the "Trust" in the first paragraph
of this Indenture, until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trust" shall mean
such successor Person.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.
"Trust Nonrecourse Indebtedness" means Indebtedness of the Trust as to
which, subject to exceptions for fraud and certain environmental violations, (i)
the sole recourse for collection of principal, interest and premium with respect
to such Indebtedness is against the specific property or assets identified in
the instruments evidencing or securing such Indebtedness, (ii) no other property
or assets may be realized upon in collection of principal, interest or premium
of such Indebtedness, (iii) other than as provided in clause (i) or (ii), the
Trust does not provide credit support and is not directly or indirectly liable
for such Indebtedness and (iv) no default with respect to such Indebtedness
would permit (upon notice, lapse of time or both) any holder of other
Indebtedness of the Trust or any Restricted Subsidiary of the Trust to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Trust Request" or "Trust Order" means a written request or order
signed in the name of the Trust by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code
in any applicable jurisdiction as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Trust that
at the time of determination shall be an Unrestricted Subsidiary (as designated
by the Board of Trustees as provided below) and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Trustees may designate (a "Designation")
any Subsidiary of the Trust (other than the Bank or any of its Subsidiaries, the
New Obligor (prior to the Substitution) or a Subsidiary that owns any Capital
Stock of, or owns, or holds any Lien on, any property of the Trust or any other
Restricted Subsidiary of the Trust that is not a Subsidiary of the Subsidiary to
be so designated) to be an Unrestricted Subsidiary if: (a) no Default or Event
of Default shall have occurred and be
28
continuing at the time of or after giving effect to such Designation; and (b)
the Trust could make an Investment in such Unrestricted Subsidiary at the time
of such Designation (assuming the effectiveness thereof) in an amount (the
"Designation Amount") equal to the Fair Market Value of the Capital Stock of
such Subsidiary on such date. In the event of any such Designation, the Trust
shall be deemed to have made an Investment constituting a Restricted Payment
pursuant to Section 1011 for all purposes of this Indenture in the Designation
Amount. The Board of Trustees may revoke (a "Revocation") any Designation of a
Subsidiary as an Unrestricted Subsidiary if: (a) no Default or Event or Default
shall have occurred and be continuing at the time of and after giving effect to
such Revocation; and (b) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if incurred
at such time, have been permitted to be incurred under the Indenture. Any
Designation or Revocation must be evidenced by a Board Resolution certifying
compliance with the foregoing provisions.
"U.S. Global Security" has the meaning set forth in Section 201.
"U.S. Government Obligations" has the meaning specified in Section
1304.
"U.S. Government Securities" means any evidence of Indebtedness with
an initial maturity of 180 days or less issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of America
is pledged in support thereof) and in which an interest may be acquired by book-
entry transfer pursuant to the regulations of the U.S. Department of the
Treasury and the rules and procedures of the Federal Reserve System for U.S.
Treasury securities.
"U.S. Physical Securities" has the meaning set forth in Section 201.
"Vice President", when used with respect to the Trust or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have (i) in respect of a corporation, the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such corporation (irrespective of
whether or not, at the time, stock of any other class or classes shall have, or
might have, voting power by reason of the happening of any contingency) and (ii)
in respect of the Trust, the general voting power under ordinary circumstances
to elect the Board of Trustees or other governing board of the Trust
(irrespective of whether or not, at the time, stock of any other class or
classes shall have, or might have, voting power by reason of the happening of
any contingency).
29
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary of
the Trust all the outstanding Capital Stock (other than directors' qualifying
shares) of which is owned by the Trust, by one or more other Wholly Owned
Restricted Subsidiaries, or by the Trust and one or more other Wholly Owned
Restricted Subsidiaries.
"Wholly Owned Subsidiary" means a Subsidiary of a Person all the
outstanding Capital Stock (other than directors' qualifying shares) of which is
owned by such Person, by one or more Wholly Owned Subsidiaries of such Person,
or by such Person and one or more other Wholly Owned Subsidiaries of such
Person.
SECTION 102. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture. The following Trust Indenture Act terms used in this Indenture have
the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Trust or any other
obligor on the Securities.
All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, defined by reference in the Trust Indenture
Act to another statute or defined by a rule of the Commission and not otherwise
defined herein shall have the meanings assigned to them therein.
SECTION 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Trust to the Trustee to take
any action under any provision of this Indenture, the Trust shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of one or both of such documents is specifically required by any provision of
this Indenture relating to such particular application
30
or request, no additional certificate or opinion need be furnished except as
otherwise set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than pursuant to
Section 1008(a)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Trust may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Trust stating that the
information with respect to such factual matters is in the possession of the
Trust, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
31
SECTION 105. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given 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 agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Trust. 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
Indenture and conclusive in favor of the Trustee and the Trust, if made in the
manner provided in this Section.
(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 his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of 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 which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Securities held by any
Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Trust shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Trust may, at its option, by or pursuant to Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Trust shall have no obligation to do so. Notwithstanding TIA Section 316(c),
such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed
32
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every 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 Trustee or the
Trust in reliance thereon, whether or not notation of such action is made upon
such Security.
SECTION 106. Notices, Etc., to Trustee and Trust.
-----------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Trust shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Division, or
(2) the Trust by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, or delivered by recognized
courier to the Trust addressed to it at the address of its principal office
specified in the first paragraph of this Indenture, or at any other address
previously furnished in writing to the Trustee by the Trust.
SECTION 107. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders by
the Trust or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Any
notice mailed to a Holder in the manner herein prescribed shall be conclusively
deemed to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
33
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 108. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Trust shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Securities Registrar and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York. Upon the issuance of the
Exchange Securities, if any, or the effectiveness of the Shelf Registration
Statement, this Indenture will be subject to the provisions of the Trust
Indenture Act of 1939, as amended, that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 113. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding
34
Business Day with the same force and effect as if made on the Interest Payment
Date, Redemption Date or sinking fund payment date, or at the Stated Maturity or
Maturity; provided that no interest shall accrue on such payment for the period
from and after such Interest Payment Date, Redemption Date, Stated Maturity or
Maturity, as the case may be, if such payment is made in accordance with this
Indenture on the next succeeding Business Day.
SECTION 114. Execution of Agreement by Trust.
-------------------------------
The name "▇.▇. ▇▇▇▇ Real Estate Investment Trust" is the designation
of the trustees of the Trust under a Declaration of Trust. All Persons dealing
with the Trust must look solely to the property and assets of the Trust for the
enforcement of any claims against the Trust and neither the trustees,
shareholders, officers, employees or agents of the Trust in their individual
capacities assume any personal liability for the obligations of the Trust and
the respective properties of the trustees, shareholders, officers, employees and
agents of the Trust in their individual capacities shall not be subject to the
claims of any such Persons with respect to any such obligations.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
---------------
The Initial Securities shall be known as the "9 3/4% Senior Secured
Notes due 2008" and the Exchange Securities shall be known as the "9 3/4% Series
B Senior Secured Notes due 2008", in each case, of the Trust. The Securities
and the Trustee's certificate of authentication shall be in substantially the
form annexed hereto as Exhibit A. The Securities may have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, notations or other marks
of identification and such notations, legends or endorsements as may be required
by law, or to comply with the rules on any securities exchange or agreements to
which the Trust is subject or as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by their execution of the
Securities. Any portion of the text of any Security may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Security. The Trust shall approve the form of the Securities and any notation,
legend or endorsement on the Securities. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. To the extent applicable, the Trust and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
35
Initial Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global Securities
substantially in the form set forth in Exhibit A and contain each of the legends
set forth in Section 202 (the "U.S. Global Security"), deposited with the
Trustee, as custodian for the Depositary, duly executed by the Trust and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the U.S. Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold in offshore transactions in
reliance on Regulation S shall be issued initially in the form of a single
permanent global security substantially in the form set forth in Exhibit A (the
"Offshore Global Security") deposited with the Trustee, as custodian for the
Depositary or its nominee, duly executed by the Trust and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Offshore
Global Security may from time to time be increased or decreased by adjustments
made in the records of the Trustee, as custodian for the Depositary or its
nominee, as herein provided. Initial Securities issued pursuant to Section 305
in exchange for or upon transfer of beneficial interests in the U.S. Global
Security or the Offshore Global Security shall be in the form of U.S. Physical
Securities or in the form of permanent certificated Securities substantially in
the form set forth in Exhibit A (the "Offshore Physical Securities"),
respectively as hereinafter provided.
Initial Securities offered and sold other than as described in the
preceding two paragraphs shall be issued in the form of permanent certificated
Securities in registered form substantially in the form set forth in Exhibit A
and contain the Private Placement Legend as set forth in Section 202(a)(i) (the
"U.S. Physical Securities").
The Offshore Global Securities and U.S. Physical Securities are
sometimes collectively herein referred to as the "Physical Securities". The
U.S. Global Security and the Offshore Global Securities are sometimes
collectively referred to as the "Global Securities".
The definitive Securities shall be printed, lithographed or engraved
on steel-engraved borders or may be produced in any other manner, all as
determined by the officers of the Trust executing such Securities, as evidenced
by their execution of such Securities.
Exchange Securities shall be substantially in the form set forth in
Exhibit A.
SECTION 202. Restrictive Legends.
-------------------
(a) Unless and until (x) an Initial Security is sold pursuant to an
effective Shelf Registration Statement or (y) an Initial Security is exchanged
for an Exchange Security in an Exchange Offer pursuant to an effective Exchange
Offer Registration Statement, in each case pursuant to the Registration Rights
Agreement, (A) each such U.S. Global Security and
36
each U.S. Physical Security shall bear the following legend on the face thereof
and (B) the Offshore Physical Securities and the Offshore Global Security shall
bear the Private Placement Legend on the face thereof until at least 41 days
after the date hereof (the "Offshore Securities Exchange Date") and receipt by
the Trustee of a certificate substantially in the form of Exhibit B hereto:
(i) THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER
SECURITIES LAWS. NEITHER THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE
144A")) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904
OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE
DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR
PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY
ON WHICH THE TRUST OR ANY AFFILIATE OF THE TRUST WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) AND (Y) SUCH
LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE
"RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO THE TRUST OR ANY SUBSIDIARY
THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE
37
ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF
REGULATION S, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
WITHIN THE MEANING OF SUBPARAGRAPHS (a)(1),(2),(3) OR (7) OF RULE
501 UNDER THE SECURITIES ACT WITH TOTAL ASSETS IN EXCESS OF
$5,000,000 THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "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, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT THE TRUST, THE TRUSTEE, THE TRANSFER AGENT AND THE
REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (I) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE
THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
(ii) THE SECURITY REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT BY AND BETWEEN THE
TRUST AND THE HOLDERS NAMED THEREIN. THE TRUST WILL FURNISH A
COPY OF SUCH AGREEMENT TO THE RECORD HOLDER OF THIS CERTIFICATE
WITHOUT CHARGE UPON WRITTEN REQUEST TO THE TRUST AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE.
38
(b) Each Global Security, whether or not an Initial Security, shall
also bear the following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE TRUST OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 307
OF THE INDENTURE.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount and Terms.
----------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $200,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 303,
304, 305, 306, 307, 308, 906, 1021 or 1108 or pursuant to an Exchange Offer.
The Stated Maturity of the Securities shall be April 1, 2008, and they
shall bear interest at the rate of 9 3/4% per annum from March 25, 1998, or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable on
39
October 1, 1998 and semiannually thereafter on each April 1 and October 1 in
each year and at said Stated Maturity, until the principal thereof is paid or
duly provided for.
The principal of (and premium, if any, on) and interest on the
Securities shall be payable at the office or agency of the Trust maintained for
such purpose in The City of New York, or at such other office or agency of the
Trust as may be maintained for such purpose; provided, however, that, at the
option of the Trust, interest may be paid by check mailed to addresses of the
Persons entitled thereto as such addresses shall appear on the Security
Register; provided further that, in the case of any Holder of at least
$1,000,000 aggregate principal amount of Securities, any such Holder may elect,
such election to be made in writing and received by the Security Registrar prior
to the Regular Record Date and to include applicable account information (which
account shall be located in the United States), such payment to be made by wire
transfer to the account specified in the election notice.
Holders shall have the right to require the Trust to purchase their
Securities, in whole or in part, in the event of the Change of Control pursuant
to Section 1021.
The Securities shall be redeemable as provided in Article Eleven and
in the Securities.
SECTION 302. Denominations.
-------------
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Trust by its
Chairman or a Vice Chairman, its President or a Vice President, under its
corporate seal reproduced thereon and attested by its Secretary or an Assistant
Secretary, Treasurer or Assistant Treasurer. The signature of any of these
officers on the Securities may be manual or facsimile signatures of the present
or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Trust shall bind the Trust,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Trust may deliver Initial Securities executed by the Trust
to the Trustee for authentication, together with a Trust Order for the
authentication and delivery of such Initial Securities, and the Trustee in
accordance with such Trust Order shall authenticate and deliver
40
for original issue Initial Securities in the aggregate principal amount of
$200,000,000. On a Trust Order, the Trustee or an authenticating agent shall
authenticate for original issue Exchange Securities in an aggregate principal
amount not to exceed $200,000,000; provided that such Exchange Securities shall
be issuable only upon the valid surrender for cancellation of Initial Securities
of a like aggregate principal amount in accordance with an Exchange Offer
pursuant to the Registration Rights Agreement. The Officers' Certificate and
Opinion of Counsel provided for in Section 103 shall not be applicable to the
initial Trust Order to authenticate and deliver the Initial Securities to the
Initial Purchasers. In each case thereafter, the Trustee shall be entitled to
receive an Officers' Certificate and an Opinion of Counsel of the Trust in
connection with such authentication of Securities as provided in Section 103.
Such Trust Order shall specify the amount of Securities to be authenticated and
the date on which the original issue of Initial Securities or Exchange
Securities is to be authenticated.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Exhibit
A duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture.
In case the Trust, pursuant to Article Eight, shall be consolidated or
merged with or into any other Person or shall sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its properties and
assets to any other Person or Persons or permit any of its Restricted
Subsidiaries to enter into any such transaction or series of related
transactions where such transaction or series of related transactions, in the
aggregate, would result in the sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of the properties and assets of
the Trust and its Restricted Subsidiaries on a consolidated basis to any other
Person or Persons, and the successor Person resulting from such consolidation,
or surviving such merger, or into which the Trust shall have been merged, or the
Person or Persons which shall have received a sale, assignment, conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article Eight, any of
the Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Trust Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of the Holders
41
but without expense to them, shall provide for the exchange of all Securities at
the time Outstanding for Securities authenticated and delivered in such new
name.
SECTION 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Trust may
execute, and upon Trust Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.
If temporary Securities are issued, the Trust will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Trust designated for such purpose pursuant to Section 1002,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Trust shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Trust shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Trust shall provide for the registration of
Securities and of transfers of Securities. The Security Register shall be in
written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Security Register shall
be open to inspection by the Trustee. The Trustee is hereby initially appointed
as security registrar (the "Security Registrar") for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Trust designated pursuant to Section 1002, the Trust
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations of a like aggregate principal amount.
42
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange (including an
exchange of Initial Securities for Exchange Securities), the Trust shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive; provided that no exchange
of Initial Securities for Exchange Securities shall occur until an Exchange
Offer Registration Statement shall have been declared effective by the
Commission and that the Securities to be exchanged for the Exchange Securities
shall be canceled by the Trustee.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Trust, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Trust or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Trust and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Trust may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 303, 304, 906, 1021 or 1108 not involving any
transfer.
The Trust shall not be required (i) to issue, register the transfer of
or exchange any Security during a period beginning at the opening of business 15
days before the selection of Securities to be redeemed under Section 1104 and
ending at the close of business on the day of such mailing of the relevant
notice of redemption, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 306. Book-Entry Provisions for Global Securities.
-------------------------------------------
(a) Each Global Security initially shall (i) be registered in the name
of the Depositary for such Global Security or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Security, and the Depositary
43
may be treated by the Trust, the Trustee and any agent of the Trust or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Trust, the Trustee or any agent of the Trust or the Trustee, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary or shall impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees, except (i) as otherwise set forth in
Section 307 and (ii) U.S. Physical Securities or Offshore Physical Securities
shall be transferred to all beneficial owners in exchange for their beneficial
interests in the U.S. Global Security or the Offshore Global Security,
respectively, in the event that the Depositary notifies the Trust that it is
unwilling or unable to continue as Depositary for the applicable Global Security
or the Depositary ceases to be a "Clearing Agency" registered under the Exchange
Act and a successor depositary is not appointed by the Trust within 90 days.
Interests of beneficial owners in a Global Security may be transferred in
accordance with the rules and procedures of the Depositary and the provisions
of Section 307. In connection with the transfer of an entire Global Security to
beneficial owners pursuant to clause (ii) of this paragraph (b), the applicable
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Trust shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the applicable Global Security, an equal
aggregate principal amount at maturity of U.S. Physical Securities (in the case
of the U.S. Global Security) or Offshore Physical Securities (in the case of the
Offshore Global Security), as the case may be, of authorized denominations.
(c) Any beneficial interest in one of the Global Securities that is
transferred to a Person who takes delivery in the form of an interest in the
other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subjected to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Security for as long as it remains such an interest.
(d) Any U.S. Physical Security delivered in exchange for an interest
in the U.S. Global Security pursuant to paragraph (b) of this Section shall,
unless such change is made on or after the Resale Restriction Termination Date
and except as otherwise provided in Section 307, bear the Private Placement
Legend.
(e) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
44
SECTION 307. Transfer Provisions.
-------------------
Unless and until (i) an Initial Security is sold pursuant to an
effective Registration Statement, or (ii) an Initial Security is exchanged for
an Exchange Security in the Exchange Offer pursuant to an effective Registration
Statement, in each case, pursuant to the Registration Rights Agreement, the
following provisions shall apply:
(a) General. The provisions of this Section 307 shall apply to all
-------
transfers involving any Physical Security and any beneficial interest in
any Global Security.
(b) Certain Definitions. As used in this Section 307 only, "delivery"
-------------------
of a certificate by a transferee or transferor means the delivery to the
Security Registrar by such transferee or transferor of the applicable
certificate duly completed; "holding" includes both possession of a
Physical Security and ownership of a beneficial interest in a Global
Security, as the context requires; "transferring" a Global Security means
transferring that portion of the principal amount of the transferor's
beneficial interest therein that the transferor has notified the Security
Registrar that it has agreed to transfer; and "transferring" a Physical
Security means transferring that portion of the principal amount thereof
that the transferor has notified the Security Registrar that it has agreed
to transfer.
As used in this Indenture, "Accredited Investor Certificate" means a
certificate substantially in the form set forth in Exhibit C; "Regulation S
Certificate" means a certificate substantially in the form set forth in
Exhibit D; "Rule 144A Certificate" means a certificate substantially in the
form set forth in Exhibit E; and "Non-Registration Opinion and Supporting
Evidence" means a written opinion of counsel reasonably acceptable to the
Trust to the effect that, and such other certification or information as
the Trust may reasonably require to confirm that, the proposed transfer is
being made pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act.
(c) [Intentionally Omitted]
(d) Deemed Delivery of a Rule 144A Certificate in Certain
-----------------------------------------------------
Circumstances. A Rule 144A Certificate, if not actually delivered, will be
-------------
deemed delivered if (A) (i) the transferor advises the Trust and the
Trustee in writing that the relevant offer and sale were made in accordance
with the provisions of Rule 144A (or, in the case of a transfer of a
Physical Security, the transferor checks the box provided on the Physical
Security to that effect) and (ii) the transferee advises the Trust and the
Trustee in writing that (x) it and, if applicable, each account for which
it is acting in connection with the relevant transfer, is a qualified
institutional buyer within the meaning of Rule 144A, (y) it is aware that
the transfer of Securities to it is being made in reliance on the exemption
from the provisions of Section 5 of the Securities Act provided by Rule
45
144A, and (z) if at any time the Trust is not subject to Section 13 or
15(d) of the Exchange Act, prior to the proposed date of transfer the
transferee has been given the opportunity to obtain from the Trust the
information referred to in Rule 144A(d)(4), and has either declined such
opportunity or has received such information (or, in the case of a transfer
of a Physical Security, the transferee signs the certification provided on
the Physical Security to that effect); or (B) the transferor holds the U.S.
Global Security and is transferring to a transferee that will take delivery
in the form of the U.S. Global Security.
(e) Procedures and Requirements.
---------------------------
1. If the proposed transfer occurs prior to the Offshore
Security Exchange Date, and the proposed transferor holds:
(A) a U.S. Physical Security which is surrendered to the
Security Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers an Accredited Investor Certificate and, if
required by the Trust, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Security, then the Security
Registrar shall (x) register such transfer in the name of
such transferee and record the date thereof in its books and
records, (y) cancel such surrendered U.S. Physical Security
and (z) deliver a new U.S. Physical Security to such
transferee duly registered in the name of such transferee in
principal amount equal to the principal amount being
transferred of such surrendered U.S. Physical Security;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and
requests that the proposed transferee receive a beneficial
interest in the U.S. Global Security, then the Security
Registrar shall (x) cancel such surrendered U.S. Physical
Security, (y) record an increase in the principal amount of
the U.S. Global Security equal to the principal amount being
transferred of such surrendered U.S. Physical Security and
(z) notify the Depositary in accordance with the procedures
of the Depositary that it approves of such transfer; or
46
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Offshore Global Security, then the
Security Registrar shall (x) cancel such surrendered U.S.
Physical Security, (y) record an increase in the principal
amount of the Offshore Global Security equal to the principal
amount being transferred of such surrendered U.S. Physical
Security and (z) notify the Depositary in accordance with the
procedures of the Depositary that it approves of such
transfer.
In any of the cases described in this Section 307(e)(1)(A), the
Security Registrar shall deliver to the transferor a new U.S. Physical
Security in principal amount equal to the principal amount not being
transferred of such surrendered U.S. Physical Security, as applicable.
(B) the U.S. Global Security, and the proposed transferee or
transferor, as applicable:
(i) delivers an Accredited Investor Certificate and, if
required by the Trust, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Security, then the Security
Registrar shall (w) register such transfer in the name of
such transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of the
U.S. Global Security in an amount equal to the beneficial
interest therein being transferred, (y) deliver a new U.S.
Physical Security to such transferee duly registered in the
name of such transferee in principal amount equal to the
amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and
requests that the proposed transferee receive a beneficial
interest in the U.S. Global Security, then the transfer shall
be effected in accordance with the procedures of the
Depositary therefor; or
47
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a beneficial
interest in the Offshore Global Security, then the Security
Registrar shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of the
U.S. Global Security in an amount equal to the beneficial
interest therein being transferred, (y) record an increase in
the principal amount of the Offshore Global Security equal to
the amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer.
(C) the Offshore Global Security, and the proposed transferee
or transferor, as applicable:
(i) delivers an Accredited Investor Certificate and, if
required by the Trust, a Non-Registration Opinion and
Supporting Evidence delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and the
proposed transferee requests delivery in the form of a U.S.
Physical Security, then the Security Registrar shall (w)
register such transfer in the name of such transferee and
record the date thereof in its books and records, (x) record
a decrease in the principal amount of the Offshore Global
Security in an amount equal to the beneficial interest
therein being transferred, (y) deliver a new U.S. Physical
Security to such transferee duly registered in the name of
such transferee in principal amount equal to the amount of
such decrease and (z) notify the Depositary in accordance
with the procedures of the Depositary that it approves of
such transfer;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and
requests that the proposed transferee receive a beneficial
interest in the U.S. Global Security, then the Security
Registrar shall (x) record a decrease in the principal amount
of the Offshore Global Security in an amount equal to the
beneficial interest therein being transferred, (y) record an
increase in the principal amount of the U.S. Global Security
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer; or
48
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Offshore Global Security, then
the transfer shall be effected in accordance with the
procedures of the Depositary therefor; provided, however,
that until the Offshore Security Exchange Date occurs,
beneficial interests in the Offshore Global Security may be
held only in or through accounts maintained at the
Depositary by Euroclear or Cedel (or by Agent Members acting
for the account thereof), and no person shall be entitled to
effect any transfer or exchange that would result in any
such interest being held otherwise than in or through such
an account.
2. If the proposed transfer occurs on or after the Offshore
Security Exchange Date and the proposed transferor holds:
(A) a U.S. Physical Security which is surrendered to the
Security Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers and Accredited Investor Certificate and,
if required by the Trust, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and the
proposed transferee requests delivery in the form of a U.S.
Physical Security, then the procedures set forth in Section
307(e)(1)(A)(i) shall apply;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
Offshore Global Security, then the procedures set forth in
Section 307(e)(1)(A)(ii) shall apply; or
(iii) delivers a Regulation S Certificate, then
the Security Registrar shall cancel such surrendered U.S.
Physical Security and at the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and
records and deliver a new Offshore Physical Security to
such transferee in principal amount equal to the
principal
49
amount being transferred of such surrendered U.S.
Physical Security, or
(y) if the proposed transferee is or is acting
through an Agent Member, record an increase in the
principal amount of the Offshore Global Security equal
to the principal amount being transferred of such
surrendered U.S. Physical Security and notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer.
In any of the cases described in this Section 307(e)(2)(A)(i),
(ii) or (iii)(x), the Security Registrar shall deliver to the
transferor a new U.S. Physical Security in principal amount equal
to the principal amount not being transferred of such surrendered
U.S. Physical Security, as applicable.
(B) the U.S. Global Security, and the proposed transferee or
transferor, as applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Trust, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and the
proposed transferee requests delivery in the form of a U.S.
Physical Security, then the procedures set forth in Section
307(e)(1)(B)(i) shall apply; or
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
that the proposed transferee receive a beneficial interest in the
U.S. Global Security, then the procedures set forth in Section
307(e)(1)(B)(ii) shall apply; or
(iii) delivers a Regulation S Certificate, then the
Security Registrar shall (x) record a decrease in the principal
amount of the U.S. Global Security in an amount equal to the
beneficial interest therein being transferred, (y) notify the
Depositary in accordance with the procedures of the Depositary
that it approves of such transfer and (z) at the direction of the
transferee, either:
50
(x) register such transfer in the name of such
transferee, record the date thereof in its books and records
and deliver a new Offshore Physical Security to such
transferee in principal amount equal to the amount of such
decrease, or
(y) if the proposed transferee is or is acting through
an Agent Member, record an increase in the principal amount
of the Offshore Global Security equal to the amount of such
decrease.
(C) an Offshore Physical Security which is surrendered to the
Security Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers (or is deemed to have delivered pursuant to
clause (d) above) a Rule 144A Certificate and the proposed
transferee is or is acting through an Agent Member and requests
delivery in the form of the U.S. Global Security, then the
Security Registrar shall (x) cancel such surrendered Offshore
Physical Security, (y) record an increase in the principal amount
of the U.S. Global Security equal to the principal amount being
transferred of such surrendered Offshore Physical Security and
(z) notify the Depositary in accordance with the procedures of
the Depositary that it approves of such transfer;
(ii) where the proposed transferee is or is acting through
an Agent Member, requests that the proposed transferee receive a
beneficial interest in the Offshore Global Security, then the
Security Registrar shall (x) cancel such surrendered Offshore
Physical Security, (y) record an increase in the principal amount
of the Offshore Global Security equal to the principal amount
being transferred of such surrendered Offshore Physical Security
and (z) notify the Depositary in accordance with the procedures
of the Depositary that it approves of such transfer; or
(iii) does not make a request covered by Section
307(e)(2)(C)(i) or Section 307(e)(2)(C)(ii), then the Security
Registrar shall (x) register such transfer in the name of such
transferee and record the date thereof in its books and records,
(y) cancel such surrendered Offshore Physical Security and (z)
deliver a new Offshore Physical Security to such transferee duly
registered in the name of such transferee in principal amount
51
equal to the principal amount being transferred of such
surrendered Offshore Physical Security.
In any of the cases described in this Section
307(e)(2)(C), the Security Registrar shall deliver to the
transferor a new U.S. Physical Security in principal amount
equal to the principal amount not being transferred of such
surrendered U.S. Physical Security, as applicable.
(D) the Offshore Global Security, and the proposed
transferee or transferor, as applicable:
(i) delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and
the proposed transferee is or is acting through an Agent
Member and requests delivery in the form of the U.S. Global
Security, then the Security Registrar shall (x) record a
decrease in the principal amount of the Offshore Global
Security in an amount equal to the beneficial interest
therein being transferred, (y) record an increase in the
principal amount of the U.S. Global Security equal to the
amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer;
(ii) where the proposed transferee is or is acting
through an Agent Member, requests that the proposed
transferee receive a beneficial interest in the Offshore
Global Security, then the transfer shall be effected in
accordance with the procedures of the Depositary therefor;
or
(iii) does not make a request covered by Section
307(e)(2)(D)(i) or Section 307(e)(2)(D)(ii), then the
Security Registrar shall (w) register such transfer in the
name of such transferee and record the date thereof in its
books and records, (x) record a decrease in the principal
amount of the Offshore Global Security in an amount equal to
the beneficial interest therein being transferred, (y)
deliver a new Offshore Physical Security to such transferee
duly registered in the name of such transferee in principal
amount equal to the amount of such decrease and (z) notify
the Depositary in accordance with the procedures of the
Depositary that it approves of such transfer.
52
(f) Execution, Authentication and Delivery of Physical Securities. In
-------------------------------------------------------------
any case in which the Security Registrar is required to deliver a Physical
Security to a transferee or
transferor, the Trust shall execute, and the Trustee shall authenticate and
make available for delivery, such Physical Security.
(g) Certain Additional Terms Applicable to Physical Securities. Any
----------------------------------------------------------
transferee entitled to receive a Physical Security may request that the
principal amount thereof be evidenced by one or more Physical Securities in
any authorized denomination or denominations and the Security Registrar
shall comply with such request if all other transfer restrictions are
satisfied.
(h) Transfers Not Covered by Section 307(e). The Security Registrar
---------------------------------------
shall effect and record, upon receipt of a written request from the Trust
so to do, a transfer not otherwise permitted by Section 307(e), such
recording to be done in accordance with the otherwise applicable provisions
of Section 307(e), upon the furnishing by the proposed transferor or
transferee of a Non-Registration Opinion and Supporting Evidence.
(i) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and
in the Private Placement Legend and agrees that it will transfer such
Security only as provided in the Indenture. The Security Registrar shall
not register a transfer of any Security unless such transfer complies with
the restrictions with respect thereto set forth in this Indenture. The
Security Registrar shall not be required to determine (but may rely upon a
determination made by the Trust) the sufficiency or accuracy of any such
certifications, legal opinions, other information or document.
(j) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Securities not bearing the Private Placement Legend, the
Security Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Security Registrar shall deliver
only Securities that bear the Private Placement Legend unless (i) the
circumstances exist contemplated by the fourth paragraph of Section 201
(with respect to an Offshore Physical Security) or the requested transfer
is at least two years after the original issue date of the Initial Security
(with respect to any Physical Security), (ii) there is delivered to the
Security Registrar an Opinion of Counsel reasonably satisfactory to the
Trust and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain
compliance with the provisions of the Securities Act or (iii) such
Securities are exchanged for Exchange Securities pursuant to an Exchange
Offer.
53
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (i) any mutilated Security is surrendered to the Trustee, or (ii)
the Trust and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the Trust
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Trust or the
Trustee that such Security has been acquired by a bona fide purchaser, the Trust
shall execute and upon Trust Order the Trustee shall authenticate and deliver,
in exchange for any such mutilated Security or in lieu of any such destroyed,
lost or stolen Security, a new Security of like tenor and principal amount,
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Trust in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Trust
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Trust, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest at the
office or agency of the Trust maintained for such purpose pursuant to Section
1002; provided that, payment of interest shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Security Register; provided further that, in the case of any Holder of at least
$1,000,000 aggregate principal amount of Securities, any such Holder may elect,
such election to be made in writing and received by the Security Registrar prior
to the Regular Record Date and to include applicable account information (which
account shall be located in the United States), such interest payment to be made
by wire transfer to the account specified in the election notice.
54
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date shall forthwith cease to
be payable to the Holder on the Regular Record Date by virtue of having been
such Holder, and such defaulted interest and (to the extent lawful) interest on
such defaulted interest at the rate borne by the Securities (such defaulted
interest and interest thereon herein collectively called "Defaulted Interest")
may be paid by the Trust, at its election in each case, as provided in clause
(1) or (2) below:
(1) The Trust may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Trust shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the
date of the proposed payment, and at the same time the Trust shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Trust of such
Special Record Date, and in the name and at the expense of the Trust, shall
cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be given in the manner provided for in
Section 107, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall be
paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Trust may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may
be required by such exchange, if, after notice given by the Trust to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
55
SECTION 310. Persons Deemed Owners.
---------------------
Prior to the due presentment of a Security for registration of
transfer, the Trust, the Trustee and any agent of the Trust or the Trustee may
treat the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any, on) and (subject to Sections 305 and 309) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and none
of the Trust, the Trustee or any agent of the Trust or the Trustee shall be
affected by notice to the contrary.
SECTION 311. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Trust may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Trust may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Trust has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. If the Trust
shall so acquire any of the Securities, however, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall
be disposed of by the Trustee in accordance with its customary procedures and
certification of their disposal delivered to the Trust unless by Trust Order the
Trust shall direct that canceled Securities be returned to it.
SECTION 312. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
SECTION 313. CUSIP Numbers
-------------
The Trust in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption or other notices to Holders as a convenience to Holders; provided
that any such notice may state that no representation in made as to the
correctness of such numbers either as printed on the Securities or as contained
in the notice of redemption and that reliance may be placed only on the other
identification numbers and other identifying information printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Trust will promptly notify the Trustee of any
change in the CUSIP numbers.
56
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Trust Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of
Securities herein expressly provided for) and the Collateral shall be released
as provided in Section 1212, and the Trustee, at the expense of the Trust, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when:
(1) either
(a) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 308 and
(ii) Securities for whose payment money has theretofore been deposited
in trust with the Trustee or any Paying Agent or segregated and held
in trust by the Trust and thereafter repaid to the Trust or discharged
from such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or
(b) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Trust,
and the Trust, in the case of (i), (ii) or (iii) of this subclause
(b), has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount sufficient
to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal
(and premium, if any) and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to the final
Stated Maturity or Redemption Date, as the case may be;
57
(2) the Trust has paid or caused to be paid all other sums payable
hereunder by the Trust; and
(3) the Trust has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Trust to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (b) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Trust acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-----------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default 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):
(i) default in the payment of any interest on any Security when it
becomes due and payable and continuance of such default for a period of 30
days;
(ii) default in the payment of the principal of or premium, if any,
on any Security at its Maturity (upon acceleration, optional redemption,
required purchase or otherwise);
(iii) failure to make or consummate a Change of Control Offer in
accordance with the provisions of Section 1021;
58
(iv) failure by the Trust to perform or observe any other term,
covenant or agreement contained in the Securities or this Indenture (other
than a default specified in clause (i), (ii) or (iii) above or clause (ix)
below) for a period of 45 days after written notice of such failure
requiring the Trust to remedy the same shall have been given (x) to the
Trust by the Trustee or (y) to the Trust and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities then
Outstanding;
(v) default (other than a default on Nonrecourse Indebtedness or on
less than $10,000,000 of Trust Nonrecourse Indebtedness at any one time)
under any instrument or any other obligation (x) representing indebtedness
for borrowed money of the Trust or any of its Restricted Subsidiaries, (y)
representing indebtedness evidenced by bonds, notes, debentures or other
similar instruments of the Trust or any of its Restricted Subsidiaries or
(z) constituting a guarantee by the Trust or any of its Restricted
Subsidiaries of Guaranteed Indebtedness of any other Person representing
money borrowed or any obligation of such other Person evidenced by bonds,
notes, debentures or other similar instruments, which default (a) consists
of the failure to pay an amount aggregating in excess of $10,000,000 if
such default continues for a period of 30 days after written notice of such
failure requiring the Trust to remedy the same shall have been given (A) to
the Trust by the Trustee or (B) to the Trust and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Securities then
Outstanding, or (b) results in the acceleration of such indebtedness or
guarantee in an aggregate principal amount in excess of $10,000,000;
(vi) failure by the Bank to comply with any of its Regulatory
Capital Requirements set forth in clause (ii) of the definition thereof;
provided that an Event of Default under this clause (vi) shall not have
occurred until the expiration of a 90-day period commencing on the date of
the initial submission of a capital plan to the OTS by the Bank (unless
such capital plan is approved by the OTS on or prior to the expiration of
such 90-day period or, if the OTS has notified the Bank that it needs
additional time to determine whether to approve such capital plan and such
capital plan is approved by the OTS on or prior to the expiration of such
extended period); provided further that if the Bank meets the minimum
amount of capital required to meet each of the industry-wide regulatory
capital requirements pursuant to 12 U.S.C. Section 1464(t) and 12 C.F.R.
Section 567 (and any amendment to either thereof) or any successor law or
regulation, notwithstanding the Bank's failure to meet an individual
minimum capital requirement pursuant to 12 U.S.C. Section 1464(s) and 12
C.F.R. Section 567.3 (and any amendment to either thereof) or any successor
law or regulation, no Event of Default shall have occurred pursuant to this
clause (vi) unless written notice thereof shall have been given (x) to the
Bank by the Trustee or (y) to the Bank and the Trustee by the Holders of
25% in aggregate principal amount of the Securities then outstanding;
(vii) existence of one or more judgments against the Trust or any of
its Subsidiaries for the payment of money in excess of $10,000,000, either
individually or
59
in the aggregate, which remain undischarged 60 days after all rights to
review directly such judgment or judgments, whether by appeal or writ, have
been exhausted or have expired;
(viii) any provision of Article Twelve of this Indenture relating to
the Collateral (other than Section 1204, insofar as it relates to
obligations of the Trustee or the Custodian, or Section 1213(a)) shall
cease, for any reason (other than under the terms of a supplemental
indenture entered into pursuant to Section 902), to be in full force and
effect in any material respect, or the Trust shall so assert in writing; or
the Trustee shall cease to have a first priority perfected security
interest, for the benefit of the Trustee and the Holders, in the Collateral
(other than by reason of the release of any such security interest in
accordance with this Indenture), or any representation, warranty or
certification of the Trust made in or pursuant to Section 1203 or 1205
shall be false in any material respect as of the date when made;
(ix) failure by the Trust to perform or observe
(a) any term, covenant or agreement contained in Section
1214(a), to the extent that such failure relates to the creation or
existence of a non-consensual Lien on the Collateral, for a period of
45 days after the Trust shall have knowledge of such failure,
(b) any other term, covenant or agreement contained in Section
1214(a) or any term, covenant or agreement contained in Section
1214(b) or
(c) any other term, covenant or condition contained in Article
Twelve for a period of 30 days after written notice of such failure
requiring the Trust to remedy the same shall have been given to the
Trust by the Trustee or to the Trust and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities then
Outstanding;
(x) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Trust or any Material Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Trust or any Material Subsidiary under the Federal Bankruptcy Code or
any other applicable federal or state law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Trust or any Material Subsidiary or of any substantial part of its
property, or 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 90 consecutive days; or
(xi) the institution by the Trust or any Material Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of
60
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable federal or state law, or
the consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or any Material Subsidiary or of any
substantial part of its property, or the making 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.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than as specified in clause (x) or (xi)
of Section 501) occurs and is continuing, the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities may declare
the principal amount of all the Securities to be immediately due and payable by
notice to the Trust (and to the Trustee if given by the Holders), and upon any
such declaration such principal amount shall become immediately due and payable.
If an Event of Default specified in clause (x) or (xi) of Section 501 occurs and
is continuing, then the principal of, premium, if any, and accrued interest on
all of the outstanding Securities shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder of Securities.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article Five provided, the Holders of a
majority in aggregate principal amount of the Outstanding Securities, by written
notice to the Trust and the Trustee, may rescind and annul such declaration and
its consequences if:
(a) the Trust has paid or deposited with the Trustee a sum sufficient
to pay:
(i) all overdue interest on all Outstanding Securities;
(ii) all unpaid principal of (and premium, if any, on) any
Outstanding Securities which has become due otherwise than by such
declaration of acceleration, and interest on such unpaid principal at
the rate borne by the Securities;
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities;
and
(iv) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
61
(b) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest on the Securities that
have become due solely by such declaration of acceleration, have been cured
or waived.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Notwithstanding the preceding paragraph, in the event of any Event of
Default specified in Section 501(v), such Event of Default and all consequences
thereof (including without limitation any acceleration or resulting payment
default) shall be annulled, waived and rescinded, automatically and without any
action by the Trustee or the Holders of the Securities, if within 30 days after
such Event of Default arose (x) the Indebtedness or guarantee that is the basis
for such event of default has been discharged, or (y) the holders thereof have
rescinded or waived the acceleration, notice or action (as the case may be)
giving rise to such Event of Default, or (z) the default that is the basis for
such Event of Default has been cured.
If a Default specified in clause (i), (ii), (iii), (v), (vi) of
Section 501, or specified in clause (iv) of Section 501 with respect to Sections
1010, 1011, 1015, 1020 and 1021 or specified in clauses (ix) of Section 501 with
respect to Sections 1203(b),(c) and (d) and Section 1214(c), occurs and is
continuing, or an Event of Default occurs and is continuing, the interest rate
borne by the Securities will increase by 2% per annum until such time when such
Defaults or Events of Default, as the case may be, have been cured or waived;
provided, however, that if after such Default or Event of Default has been cured
or waived a different Default specified in clause (i), (ii), (iii), (v), (vi) of
this Section 501, or specified in clause (iv) of Section 501 with respect to
Sections 1008(a), 1009 through 1021 or specified in clause (ix) of Section 501
with respect to Sections 1203(b),(c) and (d) and Sections 1214(c), occurs and is
continuing, or an Event of Default occurs and is continuing, the interest rate
may again be increased pursuant to the foregoing provision. Such interest will
accrue from the date of such Default or Event of Default, as the case may be,
and will be payable after the time the Trust has knowledge of such Default or
Event of Default as set forth in the next paragraph.
Any additional interest on any Security which is payable pursuant to
this Section 502, but is not punctually paid or duly provided for, on any
Interest Payment Date shall forthwith cease to be payable to the Holder on the
Regular Record Date by virtue of having been such Holder, and such additional
interest (such interest herein called "Additional Interest") may be paid by the
Trust, at its election in each case, as provided in clause (1) or (2) below:
(1) The Trust may elect to make payment of any Additional Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Additional Interest, which shall be fixed in
the following manner. The Trust shall notify the Trustee in writing of the
amount of Additional Interest proposed to be paid
62
on each Security and the date of the proposed payment, and at the same time
the Trust shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Additional Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Additional
Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Additional Interest, which
shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Trust of such Special Record Date, and in the name and at the
expense of the Trust, shall cause notice of the proposed payment of such
Additional Interest and the Special Record Date therefor to be given in the
manner provided for in Section 107, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Additional
Interest and the Special Record Date therefor having been so given, such
Additional Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall not be payable
pursuant to the following clause (2).
(2) The Trust may make payment of any Additional Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Trust to the Trustee of the proposed payment pursuant to this clause (2),
such manner of payment shall be deemed practicable by the Trustee.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Trust covenants that if
(a) default is made in the payment of any installment of interest on
any Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(b) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof, the Trust will, upon
demand of the Trustee, pay to the Trustee for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities
for principal thereof (and premium, if any, thereon) and interest thereon,
and interest on any overdue principal (and premium, if any) and, to the
extent that payment of such interest shall be legally enforceable, upon any
overdue installment of interest, at the rate borne by the Securities, and,
in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of
63
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Trust fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name, as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Trust or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Trust or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any insolvency, bankruptcy, receivership,
liquidation, conservatorship, arrangement, adjustment, composition or other
judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Trust for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, conservator, assignee, trustee, liquidator,
sequestrator or similar official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 607.
64
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities.
----------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article Five shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: to the payment of all amounts due to the Trustee under Section
607;
SECOND: to the payment of the amounts then due and unpaid for
principal of (and premium, if any, on) and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively; and
THIRD: the balance, if any, to the Person or Persons entitled thereto.
SECTION 507. Limitation on Suits.
-------------------
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
65
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
or more in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture, but subject to
the provisions of Section 515, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment, as provided herein and
in such Security, of the principal of (and premium, if any, on) and interest on
such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Trust, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
66
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 308, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five or
by law to the Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
SECTION 512. Control by Holders.
------------------
The Holders of not less than a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Past Defaults.
-----------------------
Subject to Section 502, the Holders of not less than a majority in
principal amount of the Outstanding Securities may on behalf of the Holders of
all the Securities waive any past Default hereunder and its consequences, except
a Default
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(1) in respect of the payment of the principal of (or premium, if
any, on) or interest on any Security, or
(2) in respect of a covenant or provision hereof which under Article
Nine may not be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
--------------------------------
The Trust covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Trust (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for any enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such litigant party; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate more than 25% in aggregate principal amount of the Outstanding
Securities, or to any suit instituted by any Holder for enforcement of the
payment of principal of (or premium, if any, on) or interest on any Security on
or after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 516. Nonrecourse Against the Trust or its Subsidiaries.
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The Securities are nonrecourse obligations of the Trust, and the sole
recourse for collection of principal, premium, if any, and interest on the
Securities will be against the Pledged Bank Stock and the other Collateral. The
Trust's obligations under the Securities are not guaranteed directly or
indirectly by the Trust or any of its subsidiaries, and the Trust is not liable
in any respect (except to the extent of its interest in the Pledged Bank Stock
and the other Collateral) for the payment of any obligation due under the
Securities.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of a Default or an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith or willful misconduct on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture, but not to verify
the contents thereof.
(b) In case a Default or an Event of Default has occurred and is
continuing of which a Responsible Officer of the Trustee has actual knowledge or
of which written notice of such Default or Event of Default shall have been
given to the Trustee by the Trust, any other obligor of the Securities or by any
Holder, the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
------
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;
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(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in aggregate principal amount of the
Outstanding Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee 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 rights or powers, if it 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.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 601.
SECTION 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such Default hereunder known to the Trustee, unless such
Default shall have been cured or waived; provided, however, that, except in the
case of a Default in the payment of the principal of (or premium, if any, on) or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders; and provided further that in the case of any Default of the character
specified in Section 501(iv) no such notice to Holders shall be given until at
least 30 days after the occurrence thereof.
SECTION 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of TIA Sections 315(a) through 315(d), which
are incorporated herein by reference:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report,
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notice, request, direction, consent, order, 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;
(2) any request or direction of the Trust mentioned herein shall be
sufficiently evidenced by a Trust Request or Trust Order and any resolution
of the Board of Trustees may be sufficiently evidenced by a Board
Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of 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;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Trust,
personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
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(9) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(10) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty; and
(11) except for a default under Section 501(i) or (ii) hereof, or any
other event of which the Trustee has "actual knowledge" and which event,
with the giving of notice or the passage of time or both, would constitute
an Event of Default under this Indenture, the Trustee shall not be deemed
to have notice of any Default or Event of Default unless specifically
notified in writing of such event by the Trust or the Holders of not less
than 25% in aggregate principal amount of the Securities then outstanding;
as used herein, the term "actual knowledge" means the actual fact or
statement of knowing, without any duty to make any investigation with
regard thereto.
The Trustee shall not be required 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 rights or powers if it 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.
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
Securities.
----------
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Trust, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in a Statement of Eligibility and Qualification of Form T-1 supplied to the
Trust are true and accurate, subject to the qualifications set forth therein.
The Trustee shall not be accountable for the use or application by the Trust of
Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
-------------------
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Trust or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to TIA Sections
310(b) and 311, may otherwise deal with the Trust with the same rights it would
have if it were not Trustee, Paying Agent, Security Registrar or such other
agent.
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SECTION 606. Money Held in Trust.
-------------------
All money received by the Trustee shall, until used or applied as
herein provided, be held in trust hereunder for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Trust.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Trust agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability, damage, claim or expense, including taxes (other than
taxes based on the income of the Trustee) incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance
or administration of this trust, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
Trustee shall notify the Trust promptly of any action, suit or proceeding
for which it may seek indemnity. The Trust shall defend such action, suit
or proceeding and the Trustee may have separate counsel. If the Trust has
failed to assume the defense and employ counsel, or if the named parties to
any such action, suit or proceeding (including any impleaded parties)
include both the Trustee and the Trust, and the Trustee shall have been
advised by its counsel that representation of the Trustee and the Trust by
the same counsel would be inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between
them, the Trust shall pay the reasonable fees and expenses of one separate
counsel to the Trustee. The Trust need not pay for any settlement made
without its consent which shall not be unreasonably withheld.
The obligations of the Trust under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and
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hold harmless the Trustee shall constitute additional indebtedness hereunder and
shall survive the satisfaction and discharge of this Indenture. As security for
the performance of such obligations of the Trust, the Trustee shall have a claim
prior to the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of (and
premium, if any, on) or interest on particular Securities.
The provisions of this Section 607 shall survive the termination of
this Indenture.
SECTION 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If the Trustee does not have an
office in The City of New York, the Trustee may appoint an agent in The City of
New York reasonably acceptable to the Trust to conduct any activities which the
Trustee may be required under this Indenture to conduct in The City of New York.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article Six.
SECTION 609. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 610.
(b) The Trustee may resign at any time by giving written notice
thereof to the Trust. Upon receiving such notice of resignation, the Trust
shall promptly appoint a successor trustee by written instrument executed by
authority of the Board of Trustees, a copy of which shall be delivered to the
resigning Trustee and a copy to the successor trustee. If the instrument of
acceptance by a successor Trustee required by Section 610 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities.
(c) The Trustee may be removed at any time with respect to the
Securities by Act of the Holders of not less than a majority in principal amount
of the Outstanding Securities, delivered to the Trustee and to the Trust. If the
instrument of acceptance by a
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successor Trustee required by Section 610 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of removal, the Trustee
being removed may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities.
(d) If the Trustee has or shall acquire any conflicting interest
within the meaning of Section 310(b) of the TIA, then
(i) within 90 days after ascertaining that it has such conflicting
interest, and if the Default to which such conflicting interest relates has
not been cured or duly waived or otherwise eliminated before the end of
such 90-day period, the Trustee shall either eliminate such conflicting
interest or, except as otherwise provided in Section 310(b) of the TIA,
resign, and the Trust shall take prompt steps to have a successor appointed
in the manner provided in this Indenture, and
(ii) in the event that the Trustee shall fail to comply with clause
(i) of this Subsection (d), the Trustee shall, within 10 days after the
expiration of such 90-day period, transmit notice of such failure to the
Holders in the manner provided in the TIA.
(e) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Trust or by any Holder
who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 608 and shall
fail to resign after written request therefor by the Trust or by any Holder
who has been a bona fide Holder of a Security for at least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Trust, by a Board Resolution, may remove the
Trustee, or (ii) subject to Section 515, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities, the
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Trust, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Securities delivered to the Trust and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Securities and
supersede the successor Trustee appointed by the Trust. If no successor Trustee
shall have been so appointed by the Trust or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee.
(g) The Trust shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 107. Each notice shall include
the name of the successor Trustee with respect to the Securities and the address
of its Corporate Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
--------------------------------------
(a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Trust and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the Trust
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Trust 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.
(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 Six.
SECTION 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
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this Article Six, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities; and in case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the certificate of
the Trustee shall have; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
SECTION 612. Appointment of Authenticating Agent.
-----------------------------------
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to the Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities and the Trustee shall give written notice of such appointment to all
Holders of Securities, in the manner provided for in Section 107. Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, and a copy of such instrument
shall be promptly furnished to the Trust. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Trust and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any state thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
612, it shall resign immediately in the manner and with the effect specified in
this Section 612.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any
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corporation succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section 612, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Trust. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Trust. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 612, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Trust and shall give
written notice of such appointment to all Holders of Securities, in the manner
provided for in Section 107. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trust agrees to pay to each Authenticating Agent from time to time
such compensation for its services under this Section as shall be agreed in
writing between the Trust and such Authenticating Agent.
If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
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This is one of the Securities designated therein referred to in the
within-mentioned Indenture.
_______________________________,
as Trustee
By: __________________________
as Authenticating Agent
By: __________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND TRUST
SECTION 701. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of Securities, by receiving and holding the same, agrees
with the Trust and the Trustee that none of the Trust or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
The Trustee also shall transmit to the holders, in the manner and to
the extent provided by TIA Section 313(c), within the times hereinafter
specified, a brief report with respect to
(a) the release, or release and substitution, of property subject to
the Lien of this Indenture (and the consideration therefor, if any), unless
the fair value of such property, as set forth in the certificate or opinion
required by Section 1213(a)(i), is less than 10% of the principal amount of
the Securities Outstanding at the time of such release, or such release and
substitution, such report to be so transmitted within 90 days after such
time, and
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(b) the character and amount of any advances made by it as such since
the date of the last report transmitted pursuant to the provisions of the
first paragraph of this Section 702 (or, if no such report has yet been so
transmitted, since the date of execution of this Indenture), for the
reimbursement of which it claims or may claim a lien or charge, prior to
that of the Securities, on the trust estate or on property or funds held or
collected by it as Trustee, and which it has not previously reported
pursuant to this Subsection (b), if such advances remaining unpaid at any
time aggregate more than 10% of the principal amount of the Securities
Outstanding at such time, such report to be so transmitted within 90 days
of such time.
SECTION 703. Reports by the Trust.
--------------------
The Trust shall:
(1) file with the Trustee, within 15 days after the Trust is required
to file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Trust may be required to file with the
Commission pursuant to Section 13 (a) or (c) or Section 15(d) of the
Exchange Act; or, if the Trust is not required to file information,
documents or reports pursuant to either of such Sections, then it shall
file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 (a) or (c) of the Exchange Act in respect
of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Trust with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), within 30 days after the filing thereof
with the Trustee, such summaries of any information, documents and reports
required to be filed by the Trust pursuant to paragraphs (1) and (2) of
this Section as may be required by rules and regulations prescribed from
time to time by the Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Trust May Consolidate, Etc., Only on Certain Terms.
--------------------------------------------------
Except with respect to the Substitution as set forth under Section
1401, the Trust will not, in a single transaction or through a series of related
transactions, consolidate with or merge with or into any other Person, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any other Person or Persons or permit any of its
Restricted Subsidiaries to enter into any such transaction or series of related
transactions if such transaction or series of related transactions, in the
aggregate, would result in the sale, assignment, conveyance, transfer, lease or
other disposition of all or substantially all of the properties and assets of
the Trust and its Restricted Subsidiaries on a consolidated basis to any other
Person or Persons, unless at the time and immediately after giving effect
thereto:
(a) either (1) the Trust will be the continuing Person or (2) the
Person (if other than the Trust) formed by such consolidation or into which
the Trust or such Restricted Subsidiary is merged or the Person that
acquires by sale, assignment, conveyance, transfer, lease or other
disposition all or substantially all the properties and assets of the Trust
and its Restricted Subsidiaries on a consolidated basis (the "Surviving
Entity") (i) will be a corporation duly organized and validly existing
under the laws of the United States of America, any state thereof or the
District of Columbia and (ii) will expressly assume, by a supplemental
indenture in form satisfactory to the Trustee, the Trust's obligation for
the due and punctual payment of the principal of, premium, if any, and
interest on all the Securities and the performance and observance of every
covenant of the Indenture on the part of the Trust to be performed or
observed;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any obligation of the Trust or any Restricted Subsidiary incurred in
connection with or as a result of such transaction or series of
transactions as having been incurred at the time of such transaction), no
Default or Event of Default will have occurred and be continuing; and
(c) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (and treating any obligation of the Trust
or any Restricted Subsidiary incurred in connection with or as a result of
such transaction or series of transactions as having been incurred at the
time of such transaction), the Consolidated Net Worth of the Trust (or of
the Surviving Entity if the Trust is not a continuing obligor under the
Indenture) is equal to or greater than the Consolidated Net Worth of the
Trust immediately prior to such transaction or series of transactions less
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the aggregate amount of all reasonable transaction costs incurred in
connection with such transaction or series of transactions.
The Bank will not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person,
or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of the properties and assets of the Bank to any other Person
or permit any of its Subsidiaries to enter into any such transaction or series
of related transactions if such transaction or series of related transactions,
in the aggregate, would result in the sale, assignment, conveyance, transfer,
lease or other disposition of all or substantially all of the properties and
assets of the Bank and its Subsidiaries on a consolidated basis to any other
Person.
In connection with any such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition, the Trust or the Surviving
Entity shall deliver to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition, and if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
complies with the requirements of this Section 801 and that all conditions
precedent therein provided for relating to such transaction have been complied
with.
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Trust in accordance with Section 801 in which the Trust is not the
continuing obligor under the Indenture, the Surviving Entity shall succeed to,
and be substituted for, and may exercise every right and power of, the Trust
under the Indenture with the same effect as if such successor had been named as
the Trust therein. When a successor assumes all the obligations of its
predecessor under this Indenture and the Securities, the predecessor shall be
released from those obligations; provided that in the case of a transfer by
lease, the predecessor shall not be released from the payment of principal and
interest on the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Trust, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more
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indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Trust or any
other obligor under the Securities and the assumption by any such successor
of the covenants of the Trust contained herein and in the Securities in
accordance with the provisions of Article Eight; or
(2) to evidence the substitution of the New Obligor, and the
assumption by the New Obligor of the obligations of the Trust in this
Indenture and the Securities in accordance with Article Fourteen; or
(3) to add to the covenants of the Trust or any other obligor upon
the Securities for the benefit of the Holders or to surrender any right or
power herein conferred upon the Trust or any other obligor upon the
Securities; or
(4) to add any additional Events of Default; or
(5) to cure any ambiguity, to correct or supplement any provision
herein or in the Securities which may be defective or inconsistent with any
other provision herein or in the Securities, or to make any other
provisions with respect to matters or questions arising under this
Indenture or the Securities; provided that, in each case, such provisions
shall not adversely affect in any material respect the interests of the
Holders; or
(6) to comply with the requirements of the Commission in order to
effect or maintain the qualification of the Indenture under the Trust
Indenture Act or any similar federal statute hereafter enacted; or
(7) to secure further the Securities or add a guarantor of the Notes
under this Indenture; or
(8) to evidence and provide for the acceptance of the appointment of
a successor Trustee under this Indenture; or
(9) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security
for the payment and performance of the Trust's obligations under this
Indenture, in any property or assets, including any of which are required
to be mortgaged, pledged or hypothecated, or in which a security interest
is required to be granted, to the Trustee pursuant to this Indenture or
otherwise.
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SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of a majority in aggregate principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Trust and the Trustee, the Trust, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof or change the coin or currency in which any Security or
any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date); or
(2) amend, change or modify any of the provisions of Section 1021
including any definitions relating thereto, in a manner adverse to the
Holders; or
(3) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
or
(4) modify any of the provisions of this Section 902, Sections 513,
1020 or 1214(a), (b) or (d), except to increase the percentage of
Outstanding Securities required for such action or to provide that certain
other provisions of this Indenture may not be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby; or
(5) except as otherwise permitted under the provisions of Article
Eight and Article Fourteen, consent to the assignment or transfer by the
Trust of any of its rights and obligations under this Indenture; or
(6) make any change in any of the provisions of this Indenture
relating to the Collateral that adversely affects the Holders; or
(7) waive a default in payment with respect to any Security (other
than a rescission of acceleration of the Securities by the Holders of at
least a majority in
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aggregate principal amount of the Outstanding Securities as provided herein
and a waiver of the payment default that resulted from such acceleration);
provided, however, that a majority in aggregate principal amount of
Outstanding Securities may amend the provisions of Section 801 to permit the
Bank to merge or consolidate with another Person for the sole purpose of
obtaining a charter as a commercial bank or a state chartered thrift, so long as
such merger or consolidation does not adversely affect the rights of the Holders
of the Securities.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Trust shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Trust, to any such supplemental indenture may be prepared and
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executed by the Trust and authenticated and delivered by the Trustee in exchange
for Outstanding Securities.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Trust and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Trust
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 107, setting forth in general terms the
substance of such supplemental indenture.
SECTION 908. Payment for Consent.
-------------------
Neither the Trust, any Affiliate of the Trust nor any of its
Subsidiaries shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid or agreed to be paid to all Holders which so consent, waive
or agree to amend in the time frame set forth in solicitation documents relating
to such consent, waiver or amendment.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if Any, Interest.
-----------------------------------------------
The Trust covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of (and premium, if any, on) and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Trust will maintain in The City of New York, an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Trust in respect of the Securities and this Indenture
may be served. The Corporate Trust Office of the Trustee shall be such office
or agency of the Trust, unless the Trust shall designate and maintain some other
office or agency for one or more of such purposes. The Trust will give prompt
written notice to the Trustee of any change in the location of any such office
or agency. If at any time the Trust shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Trust
86
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Trust may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Trust of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Trust will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Trust shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any, on) or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Trust shall have one or more Paying Agents for the
Securities, it will, on or before each due date of the principal of (and
premium, if any, on), or interest on, any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Trust will promptly notify the Trustee of such action or any
failure so to act.
The Trust will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest on Securities in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Trust (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
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The Trust may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Trust Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Trust or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Trust or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Trust, in trust for the payment of the principal of (and premium, if any,
on) or interest on any Security and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Trust on Trust Request, or (if then held by the Trust) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Trust for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Trust as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Trust cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Trust.
SECTION 1004. Existence.
---------
Subject to Article Eight, the Trust will do or cause to be done all
things necessary to preserve and keep in full force and effect the existence,
rights (charter and statutory) and franchises of the Trust and each Restricted
Subsidiary; provided, however, that, subject to the provisions of this
Indenture, the Trust shall not be required to preserve any such right or
franchise, or the existence of any Restricted Subsidiary (other than the Bank
and the Pledged Subsidiary), if the Board of Trustees shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Trust and its Subsidiaries as a whole and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
The Trust will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Trust or any Subsidiary or upon
the income, profits or property of the Trust or any Subsidiary and (b) all
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a lien upon the property of the Trust or any Subsidiary; provided,
however, that the Trust shall not be required to pay or discharge or cause to be
paid or
88
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings.
SECTION 1006. Maintenance of Properties.
-------------------------
The Trust will cause all properties owned by the Trust or any
Restricted Subsidiary or used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Trust may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 1006 shall prevent the Trust from discontinuing the
maintenance of any of such properties if such discontinuance is, in the judgment
of the Trust, desirable in the conduct of its business or the business of any
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders.
SECTION 1007. Insurance.
---------
The Trust will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Trust to be responsible, against loss or damage to the extent that property
of similar character is usually so insured by corporations similarly situated
and owning like properties.
SECTION 1008. Statement by Officers As to Default.
-----------------------------------
(a) The Trust will deliver to the Trustee, within 30 days after the
end of each fiscal quarter, a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer as to his
or her knowledge of the Trust's compliance with all conditions and covenants
under this Indenture. For purposes of this Section 1008(a), such compliance
shall be determined without regard to any period of grace or requirement of
notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Trust or any Subsidiary gives any notice or takes any other
action with respect to a claimed default by the Trust or any Subsidiary in the
payment of an amount aggregating in excess of $10,000,000, the Trust shall
deliver to the Trustee by registered or certified mail, by courier or by
telegram, telex or facsimile transmission an officers' certificate specifying
such Default, notice or other action within five Business Days of its
occurrence.
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SECTION 1009. Provision of Financial Statements.
---------------------------------
(a) The Trust will file on a timely basis with the Commission, to the
extent such filings are accepted by the Commission, the annual, quarterly and
other reports and other documents required by Section 13(a), 13(c) or 15(d) of
the Exchange Act regardless of whether such Sections of the Exchange Act are
applicable to the Trust. The Trust also will (i) file with the Trustee, and
provide to each Holder of Securities upon request, copies of such reports and
documents within 15 days after the date on which the Trust files such reports
and documents with the Commission or the date on which the Trust would be
required to file such reports and documents if the Trust were so required and
(ii) if filing such reports and documents with the Commission is not accepted by
the Commission or is prohibited under the Exchange Act, to supply copies of such
reports and documents to any prospective holder of Securities promptly upon
request and at the Trust's cost.
(b) The Trust will provide to each Holder of Securities and any
prospective holder of Securities, promptly upon request, and at the Trust's
cost, copies of the consolidated financial statements of the Bank and its
subsidiaries on an annual and quarterly basis (audited in the case of such
annual statements).
SECTION 1010. Limitation on Indebtedness.
--------------------------
(a) The Trust will not create, issue, assume, guarantee or otherwise
in any other manner become directly or indirectly liable for the payment of, or
otherwise incur (collectively, "incur") any Indebtedness (including any Acquired
Indebtedness), other than Permitted Indebtedness, unless at the time of such
incurrence the Trust's Operating Cash Flow Coverage Ratio for the four full
fiscal quarters immediately preceding the incurrence of such Indebtedness, taken
as one period and after giving pro forma effect to (i) the incurrence of such
Indebtedness (and all other Indebtedness incurred since the end of the most
recently completed fiscal quarter of the Trust preceding the date of
determination) and (if applicable) the application of the net proceeds therefrom
(and from any such other Indebtedness), including to refinance other
Indebtedness, as if such Indebtedness (and any such other Indebtedness) had been
incurred on the first day of such four-quarter period and (ii) the acquisition
(whether by purchase, merger or otherwise) or disposition (whether by sale,
merger or otherwise) of any company, entity or business acquired or disposed of
by the Trust or its Restricted Subsidiaries, as the case may be, since the first
day of such four quarter period, as if such acquisition or disposition occurred
on the first day of such four quarter period, would have been greater than or
equal to (x) 2.0 to 1.0 prior to April 1, 1999, (y) 2.25 to 1.0 on and after
April 1, 1999 and prior to April 1, 2000 and (z) 2.50 to 1.0 thereafter.
(b) The Trust will not permit any of its Restricted Subsidiaries
(other than the Bank and its Subsidiaries) to incur any Indebtedness (including
any Acquired Indebtedness), other than Permitted Subsidiary Indebtedness.
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SECTION 1011. Limitation on Restricted Payments.
---------------------------------
(a) The Trust will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, take any of the following actions:
(i) declare or pay any dividend on, or make any distribution
to holders of, any shares of the Capital Stock of the Trust (other than
dividends or distributions payable solely in shares of the Qualified
Capital Stock of the Trust or in options, warrants or other rights to
acquire such shares of Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of the Trust or any direct or
indirect parent of the Trust or any options, warrants or other rights to
acquire such Capital Stock;
(iii) declare or pay any dividend on, or make any distribution
to holders of, any Capital Stock of any Restricted Subsidiary (other than
with respect to (A) any such Capital Stock held by the Trust or any of its
Wholly Owned Restricted Subsidiaries, (B) any such Capital Stock of the
Bank or any of its Subsidiaries or (C) to all holders of such Capital Stock
of any Restricted Subsidiary that is not a Wholly Owned Restricted
Subsidiary on a pro rata basis or, with respect to such dividend or
distribution to the Trust or a Wholly Owned Restricted Subsidiary, on a
more advantageous basis) or purchase, redeem or otherwise acquire or retire
for value, any Capital Stock of any Subsidiary of the Trust (other than (A)
any such Capital Stock of any Wholly Owned Restricted Subsidiary, (B) any
Capital Stock held by the Bank or its Subsidiaries of any of their
Subsidiaries or (C) any Capital Stock of any Securitization Entity that is
a Subsidiary of the Bank);
(iv) make any principal payment on or repurchase, redeem,
defease or otherwise acquire or retire for value, prior to any scheduled
principal payment, scheduled sinking fund payment or maturity, any
Subordinated Indebtedness;
(v) incur, create or assume any guarantee of Indebtedness of
any Affiliate of the Trust (other than with respect to (A) guarantees of
Indebtedness of any Wholly Owned Restricted Subsidiaries of the Trust by
the Trust or by any Restricted Subsidiary (other than the Bank or any of
its Subsidiaries), (B) guarantees of Indebtedness of the Bank or any of its
Subsidiaries by another Subsidiary of the Bank or any guarantee by the Bank
of Indebtedness of its Subsidiaries), (C) guarantees of Indebtedness of the
Trust by any Restricted Subsidiary (other than the Bank and its
Subsidiaries) or (D) guarantees of Indebtedness of the Bank or its
Subsidiaries by any Affiliate of the Trust); or
(vi) make any Investment in any Person
91
(each of the foregoing actions described in (but not excluded from) clauses (i)
through (vi), other than any such action that is a Permitted Payment (as defined
below), is referred to herein as a "Restricted Payment"), provided that such
Restricted Payments may be made by the Trust or any Restricted Subsidiary (other
than the Bank and its Subsidiaries) if, after giving effect to the proposed
Restricted Payment (the amount of any such Restricted Payment, if other than
cash, as determined in good faith by the Board of Trustees of the Trust, whose
determination shall be conclusive and evidenced by a Board Resolution), (1) no
Default or Event of Default shall have occurred and be continuing and (2) the
aggregate amount of all such Restricted Payments declared or made after the date
of the Indenture shall not exceed the sum (without duplication) of:
(A) 50% of the aggregate Consolidated Net Income (Loss) of the Trust
accrued on a cumulative basis during the period beginning on October 1,
1997 and ending on the last day of the Trust's last fiscal quarter ending
prior to the Interest Payment Date immediately preceding the date of such
proposed Restricted Payment (or, if such Consolidated Net Income (Loss)
shall be a loss, minus 100% of such loss);
(B) the aggregate net cash proceeds received after the date of the
Indenture by the Trust from the issuance or sale (other than to any of its
Subsidiaries) of shares of Qualified Capital Stock of the Trust or
warrants, options or rights to purchase such shares of Qualified Capital
Stock of the Trust;
(C) the aggregate net cash proceeds received after the date of the
Indenture by the Trust as capital contributions;
(D) the aggregate net cash proceeds received after the date of the
Indenture by the Trust (other than from any of its Subsidiaries) upon the
exercise of options, warrants or rights to purchase shares of Qualified
Capital Stock of the Trust;
(E) the aggregate net cash proceeds received after the date of the
Indenture by the Trust from the issuance or sale (other than to any of its
Subsidiaries) of debt securities that have been converted into or exchanged
for Qualified Capital Stock of the Trust, together with the aggregate net
cash proceeds received by the Trust at the time of such conversion or
exchange; and
(F) $20,000,000;
provided that the provisions of paragraph (a) will not restrict the payment of
any dividend within 60 days after the date of declaration thereof if, at such
date of declaration, such declaration and payment were permitted by the
provisions of paragraph (a).
(b) Notwithstanding paragraph (a) above, the Trust and its Restricted
Subsidiaries may take the following actions (each a "Permitted Payment") so long
as (other
92
than with respect to (1) clause (v) below to the extent such exchange is
required by the OTS and (2) clause (ix) below with respect to the Investment of
funds by the Bank and its subsidiaries in the normal course of business) no
Default or Event of Default shall have occurred and be continuing:
(i) the purchase, redemption or other acquisition or retirement for
value of any shares of Capital Stock of the Trust, in exchange for, or out
of the net cash proceeds of, a substantially concurrent issuance and sale
(other than to any of its Subsidiaries) of, shares of Qualified Capital
Stock of the Trust;
(ii) (A) the repurchase, redemption, defeasance or other acquisition
or retirement for value by the Bank of the 13% Preferred Stock or the
Series B Preferred Stock, in exchange for, or out of the net cash proceeds
of, a substantially concurrent issuance and sale (other than to a
Subsidiary of the Trust) of, shares of Qualified Capital Stock of the Bank
or out of the net cash proceeds of a substantially concurrent incurrence
(other than to a Subsidiary of the Trust) of new Indebtedness of the Bank
which has no Stated Maturity of principal (or any required repurchase,
redemption, defeasance or sinking fund payments, other than as a result of
a change of control provision similar to the Securities) on or prior to the
final Stated Maturity of principal of the Securities or (B) the acquisition
by an Affiliate of the Bank of the 13% Preferred Stock or the Series B
Preferred Stock (and the contribution thereof to the Bank for retirement
and cancellation) with the proceeds of a cash distribution from the Bank
out of the net cash proceeds of a substantially concurrent issuance and
sale (other than to a Subsidiary of the Trust) of shares of Qualified
Capital Stock of the Bank or out of the net cash proceeds of a
substantially concurrent incurrence (other than to a Subsidiary of the
Trust) of new Indebtedness of the Bank which has no Stated Maturity of
principal (or any required repurchase, redemption, defeasance or sinking
fund payments, other than as a result of a change of control provision
similar to the Securities) on or prior to the final Stated Maturity of
principal of the Securities; provided that, after giving effect to such
issuance and sale or such incurrence and such repurchase, redemption,
defeasance or other acquisition or retirement, or such acquisition and
contribution and distribution, the Bank has (i) a leverage (core) capital
ratio equal to or in excess of 5.5%, (ii) a tier 1 risk-based capital ratio
equal to or in excess of 6.5% and (iii) a total risk-based capital ratio
equal to or in excess of 11%, as such ratios are calculated in accordance
with 12 C.F.R. Section 567 or any successor law or regulation;
(iii) the repurchase, redemption, defeasance or other acquisition or
retirement for value by the Bank or any of its Subsidiaries of Preferred
Stock of the Bank or its Subsidiaries (other than the 13% Preferred Stock
and the Series B Preferred Stock); provided that, after giving effect to
such repurchase, redemption, defeasance or other acquisition or retirement,
the Bank has (i) a leverage (core) capital ratio equal to or in excess of
5.5%, (ii) a tier 1 risk-based capital ratio equal to or in excess of 6.5%
and (iii) a total risk-based capital ratio equal to or in excess of 11%, as
such ratios are
93
calculated in accordance with 12 C.F.R. Section 567 or any successor law or
regulation;
(iv) the redemption by the Bank of any of the PIK Preferred Stock;
(v) the exchange of the CCPCC Preferred Stock for the Series B
Preferred Stock;
(vi) the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness (other than
Redeemable Capital Stock) in exchange for or out of the net cash proceeds
of a substantially concurrent issuance and sale (other than to a Subsidiary
of the Trust) of shares of Qualified Capital Stock of the Trust;
(vii) the repurchase of any Subordinated Indebtedness at a purchase
price not greater than 101% of the principal amount of such Subordinated
Indebtedness in the event of a Change of Control pursuant to a provision
similar to that of Section 1021; provided that prior to such repurchase the
Trust has made the Change of Control Offer as provided in Section 1021 with
respect to the Securities and has repurchased all Securities validly
tendered for payment in connection with such Change of Control Offer;
(viii) guarantees by the Trust or its Restricted Subsidiaries of
Indebtedness pursuant to the Reimbursement Agreement in an aggregate amount
not to exceed $150,000,000;
(ix) Permitted Investments;
(x) the purchase, redemption or other acquisition or retirement for
value, directly or indirectly, of any shares of Qualified Capital Stock of
the Bank (other than Preferred Stock) by the Bank; and
(xi) the repurchase, redemption or other acquisition or retirement
for value of Subordinated Indebtedness (other than Redeemable Capital
Stock), in exchange for, or out of the net cash proceeds of a substantially
concurrent issue and sale (other than to a Subsidiary of the Trust) of new
Subordinated Indebtedness (such a transaction, a "refinancing"); provided
that any such new Indebtedness of the Trust (A) shall be in a principal
amount that does not exceed an amount equal to the sum of (1) 101% of an
amount equal to the principal amount so refinanced less any discount from
the face amount of the Indebtedness to be refinanced expected to be
deducted from the amount payable to the holders of such Indebtedness in
connection with such refinancing, (2) the amount of any premium expected to
be paid in connection with such refinancing pursuant to the terms of the
Subordinated Indebtedness refinanced or the amount of any
94
premium reasonably determined by the Trust as necessary to accomplish such
refinancing by means of a tender offer, privately negotiated repurchase or
otherwise and (3) the amount of expenses of the Trust incurred in
connection with such refinancing; provided further that for purposes of
this clause (A), the principal amount of any Indebtedness shall be deemed
to mean the principal amount thereof or, if such Indebtedness provides for
an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, such lesser amount as of the date of
determination; (B) (x) if such refinanced Subordinated Indebtedness has an
Average Life to Stated Maturity shorter than that of the Securities or a
final Stated Maturity earlier than the final Stated Maturity of the
Securities, such new Indebtedness shall have an Average Life to Stated
Maturity no shorter than the Average Life to Stated Maturity of such
refinanced Indebtedness and a final Stated Maturity no earlier than the
final stated Maturity of such refinanced Indebtedness or (y) in all other
cases, each Stated Maturity of principal (or any required repurchase,
redemption or sinking fund payments) of such new Indebtedness shall be on
or after the final Stated Maturity of principal of the Securities; and (C)
is (x) made expressly subordinate to the Securities to substantially the
same extent as the Subordinated Indebtedness being refinanced or (y)
expressly subordinated to such refinanced Subordinated Indebtedness.
The actions described in clauses (i), (vi) and (vii) of this paragraph (b) shall
be Restricted Payments that shall be permitted to be taken in accordance with
this paragraph (b) but shall reduce the amount that would otherwise be available
for Restricted Payments under clause (2) of paragraph (a) above to the extent,
in the case of clauses (i) and (vi), the Trust receives net cash proceeds and
applies them as described in such clauses (i) and (vi), and the actions
described in clauses (ii), (iii), (iv), (v), (viii), (ix), (x) and (xi) of this
paragraph (b) shall be Restricted Payments that shall be permitted to be taken
in accordance with this paragraph (b) and shall not reduce the amount that would
otherwise be available for Restricted Payments under clause (2) of paragraph
(a).
SECTION 1012. Limitation on Issuances and Sales of Capital Stock of
-----------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Trust (i) will not permit any of its Restricted Subsidiaries
(other than the Bank and its Subsidiaries) to issue any Capital Stock (other
than to the Trust or a Wholly Owned Restricted Subsidiary of the Trust) and (ii)
other than with respect to Capital Stock of the Bank and its Subsidiaries, will
not permit any Person (other than the Trust, a Wholly Owned Restricted
Subsidiary of the Trust or the Bank and its Subsidiaries) to own any Capital
Stock of any of its Restricted Subsidiaries; provided, however, that this
Section 1012 shall not prohibit (1) the issuance and sale of all, but not less
than all, of the issued and outstanding Capital Stock of any Restricted
Subsidiary owned by the Trust or any of its Restricted Subsidiaries in
compliance with the other provisions of the Indenture, (2) the ownership by
directors of director's qualifying shares or the ownership by foreign nationals
of Capital Stock of any Restricted Subsidiary, to the extent mandated by
applicable law or (3) the ownership by
95
any Person of any Capital Stock of any Restricted Subsidiary of the Trust that
is not a Wholly Owned Restricted Subsidiary on the date of the Indenture;
provided further, however, that the Bank will not, and will not permit any
Subsidiary of the Bank to, create any class of common stock if such class of
common stock provides for, or entitles any holder thereof to, the payment of
dividends or distributions of any kind on any basis other than on a pro rata
basis, consistent with the ownership interests of all the holders of the common
stock of the Bank or such Subsidiary, to the holders of all classes of common
stock of the Bank or such Subsidiary, as the case may be.
SECTION 1013. Limitation on Dividends from the Bank and Its
---------------------------------------------
Subsidiaries.
------------
Notwithstanding anything to the contrary contained herein, neither the
Bank nor any of its Subsidiaries will make any distribution on or with respect
to their respective shares of Capital Stock representing a return of capital to
the holder thereof; provided, however, this provision shall not prohibit (1) any
such distribution from a Wholly Owned Subsidiary of the Bank to the Bank or
another Wholly Owned Subsidiary of the Bank or (2) any such distribution by the
Bank or a Subsidiary of the Bank that is not a Wholly Owned Subsidiary of the
Bank (x) to a Person that is not an Affiliate of the Bank and (y) to a Person
that is an Affiliate of the Bank on a pro rata basis or a less advantageous
basis; provided that this clause (2) shall not prohibit a transaction otherwise
permitted pursuant to clause (b)(x) of Section 1011.
SECTION 1014. Limitation on Transactions with Affiliates.
------------------------------------------
(a) The Trust will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate of the
Trust (except that the Bank and any of its Subsidiaries may enter into any
transaction or series of related transactions with any Subsidiary of the Bank,
and the Trust and any Wholly Owned Restricted Subsidiary of the Trust may enter
into any transaction or series of related transactions with any other Wholly
Owned Restricted Subsidiary of the Trust without limitation under this covenant)
unless (1) such transaction or series of related transactions is in writing on
terms that are no less favorable to the Trust or such Restricted Subsidiary, as
the case may be, than would be available in a comparable transaction in an
arm's-length dealing with a Person that is not such an Affiliate or, in the
absence of such a comparable transaction, on terms that in good faith would be
offered to a Person that is not an Affiliate, (2) with respect to any
transaction or series of related transactions in which the Trust and its
Restricted Subsidiaries will receive or render value or incur obligations or
make aggregate payments in excess of $5,000,000, the Trust delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (1) above and such transaction or series of
related transactions has been approved by a majority of the Disinterested
Trustees of the Board of Trustees of the Trust and (3) with respect to any
transaction or series of related transactions in which the Trust and its
Restricted Subsidiaries will receive or render value or incur obligations or
make aggregate payments in excess of
96
$20,000,000, or in the event no members of the Board of Trustees of the Trust
are Disinterested Trustees with respect to any transaction or series of related
transactions included in clause (2), the Trust delivers to the Trustee a written
opinion of a nationally recognized expert with experience in appraising the
terms and conditions of the type of transaction or series of transactions for
which approval is required to the effect that the transaction or series of
transactions are fair to the Trust and its Restricted Subsidiaries from a
financial point of view; provided, however, that this covenant will not restrict
(i) residential mortgage, credit card and other consumer loans to an Affiliate
who is an officer, director or employee of the Trust or any of its Subsidiaries,
(ii) any transaction or series of related transactions in which the total amount
involved does not exceed $100,000, (iii) payment of legal expenses incurred on
behalf of the Trust or its Subsidiaries; provided, however, that such expenses
paid by the Bank and its Subsidiaries for or on behalf of the Trust or any other
Restricted Subsidiary (other than a Subsidiary of the Bank) shall not exceed
$500,000 in any fiscal year, (iv) payment of construction and development fees
incurred on behalf of the Trust or its Restricted Subsidiaries in an aggregate
amount not to exceed $1,000,000 in any fiscal year, after adjustment for annual
increases in the consumer price index, as reported by the United States
Department of Labor, Bureau of Labor Statistics, (v) payment of financing fees
of up to 1% of the aggregate principal amount of Retail Notes issued and sold
after the date of the Indenture, (vi) transactions permitted under Section 1011,
(vii) payment of up to $4,200,000 of Advisory Fees in any fiscal year, after
adjustment for annual increases in the consumer price index, as reported by the
United States Department of Labor, Bureau of Labor Statistics, (viii)
transactions entered into pursuant to Management Agreements, (ix) checking or
other deposit products and investment management and advisory services and
insurance products, in each case that the Bank and its subsidiaries customarily
offer to their respective customers in the ordinary course of business, (x)
guarantees under the Reimbursement Agreement, (xi) payments pursuant to the Tax
Sharing Agreement and (xii) payments by the Trust to the Bank pursuant to the
Capital Maintenance Agreement; provided, however, that Advisory Fees may only be
paid so long as (A) the Trust does not hire employees and (B) no Default or
Event of Default shall have occurred and be continuing.
(b) If the Bank shall fail to comply with any of its Regulatory
Capital Requirements set forth in clauses (i) and (ii)(x) of the definition
thereof, then the Trust shall not and shall not permit any of its Restricted
Subsidiaries (other than the Bank or its Subsidiaries) to, directly or
indirectly, make any payments pursuant to clauses (a)(iii), (iv) or (v) above,
any Restricted Payments otherwise permitted by clause (a)(2) of Section 1011,
any Permitted Payments, other than actions permitted by clauses (iv), (v),
(viii) and (xi) of paragraph (b) of Section 1011, or any Investments in any
Person (other than Permitted Investments permitted by clauses (i), (v), or (vii)
of the definition thereof) or otherwise engage in any activity (including
purchases, acquisition by lease and other acquisitions of additional real
property and buildings) other than operating its then existing businesses in the
ordinary course until the Bank shall have complied with such Regulatory Capital
Requirements.
97
(c) The Trust will not, and will not permit any of its Restricted
Subsidiaries, to amend, modify or in any way alter the terms of the Management
Agreements, the Reimbursement Agreement or the Advisory Agreement in a manner
adverse to the interests of the Holders of the Securities, except as otherwise
permitted by the Indenture or to change the properties subject to the Management
Agreements.
SECTION 1015. Limitation on Liens.
-------------------
The Trust will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, for the benefit of any Affiliate of the Trust (other
than the Trust or a Wholly Owned Restricted Subsidiary of the Trust) create,
incur, assume or suffer to exist any Lien of any kind on or with respect to any
of its or their property or assets, including any shares of stock or
indebtedness of any Restricted Subsidiary, whether owned at the date of the
Indenture or thereafter acquired or any income, profits or proceeds therefrom,
or assign or otherwise convey any right to receive income thereon; provided,
however, that (a) the Bank may create, incur, assume or suffer to exist such
Liens for the benefit of its Subsidiaries and Subsidiaries of the Bank may
create, incur, assume or suffer to exist such Liens for the benefit of the Bank
or any other Subsidiary of the Bank and (b) the Trust may create, incur, assume
or suffer to exist such Liens in favor of the Bank as required by the OTS to
secure the payment and performance of the Trust under the Tax Sharing Agreement
to repay payments made by the Bank to the Trust; provided further that this
covenant shall not apply to bankers' and securities intermediaries' Liens
arising in the ordinary course.
SECTION 1016. Restriction on Transfer of Assets to Subsidiaries.
-------------------------------------------------
The Trust will not sell, convey, transfer or otherwise dispose of its
assets or property to any of its Subsidiaries except for (i) sales, conveyances,
transfers or other dispositions of assets or property in an amount permitted by
Section 1011 and (ii) sales, conveyances, transfers or other distributions of
Real Estate Property to Single Asset Subsidiaries.
SECTION 1017. Limitation on Asset Sales.
-------------------------
The Trust will not, and will not permit any of its Restricted
Subsidiaries (other than the Bank and its Subsidiaries) to, engage in any Asset
Sale unless (i) the consideration received by the Trust or such Restricted
Subsidiary for such Asset Sale is not less than the fair market value of the
Capital Stock or assets sold (as determined by the Board of Trustees of the
Trust, whose determination shall be conclusive and evidenced by a Board
Resolution) and (ii) the consideration received by the Trust or the relevant
Restricted Subsidiary in respect of such Asset Sale consists of (a) at least 75%
Cash Equivalents or (b) like-kind property to be used in the business of the
Trust or such Restricted Subsidiary, as the case may be.
98
SECTION 1018. Limitation on Restricted Subsidiaries.
-------------------------------------
The Trust will not (i) permit any of its Single Asset Subsidiaries to
acquire additional Real Estate Property or make Investments in any other Person
other than the Trust, or (ii) create any new Restricted Subsidiaries other than
Single Asset Subsidiaries and, to the extent permitted by clause (ii) of the
definition of Permitted Investments, Wholly Owned Restricted Subsidiaries;
provided, however, that such Single Asset Subsidiaries may (A) invest current
working capital in Cash Equivalents under clauses (a), (b), (c) and (d) of the
definition thereof and (B) to the extent required by third party lenders under
any loan agreement with such Subsidiary, invest cash balances in investments
other than Cash Equivalents under clause (a), (b), (c) and (d) of the definition
thereof to the extent required by such loan agreement.
SECTION 1019. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries.
---------------------------------
The Trust will not, and will not permit any of its Restricted
Subsidiaries (other than (i) the Bank and its Subsidiaries and (ii) any
Restricted Subsidiary that was a subsidiary of the Trust on or before March 30,
1994 and has not received Real Estate Property from the Trust after such date)
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make any
other distributions on or in respect of its Capital Stock or any other interest
or participation in, or measured by, its profits, (b) pay any Indebtedness owed
to the Trust or any other Restricted Subsidiary, (c) make loans or advances to
the Trust or any other Restricted Subsidiary, (d) transfer any of its properties
or assets to the Trust or any Restricted Subsidiary or (e) guarantee any
Indebtedness of the Trust or any Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of (i) any agreement in
effect on the date of the Indenture, (ii) applicable law, (iii) customary non-
assignment provisions of any lease governing a leasehold interest or equipment
of the Trust or any Restricted Subsidiary, (iv) customary due on sale and other
restrictions on transfer contained in mortgages and deeds of trust, (v) any
agreement entered into in connection with the acquisition, development,
construction or improvement of real property so long as such agreement is
required by a third party prior to extending credit, (vi) the Indenture and
(vii) any agreement that extends, renews, refinances or replaces the agreements
containing the encumbrances or restrictions in the foregoing clauses (i) and
(v), provided that the terms and conditions of any such encumbrance or
restriction are not materially less favorable to the Holders of the Securities
than those under or pursuant to the agreement so extended, renewed, refinanced
or replaced and, with respect to clause (v), such encumbrance or restriction is
required as a condition of such third party extending credit pursuant to such
extension, renewal, refinancing or replacement.
99
SECTION 1020. Required Stock Ownership.
------------------------
(a) The Trust will at all times be the legal and beneficial owner of
the Pledged Bank Stock and will not sell, transfer or otherwise dispose of any
Capital Stock of the Bank regardless of when acquired. The Trust will at all
times be the legal and beneficial owner in the aggregate of at least 66 2/3% of
the issued and outstanding common stock of the Bank and Voting Stock
representing at least 66 2/3% of the voting power of the Voting Stock of the
Bank. All the Pledged Bank Stock and such shares of the common stock of the Bank
and Voting Stock representing at least 66 2/3% of the voting power of the Voting
Stock of the Bank as are necessary to ensure that the Trust beneficially and
legally owns 66 2/3% of the issued and outstanding Voting Stock and common stock
of the Bank will be referred to as "Restricted Shares."
(b) The Trust will not create or permit to exist any Lien on any
Restricted Shares directly owned by it, other than the Lien of the Indenture.
(c) The Trust will not create or permit to exist any Lien on the
Collateral other than the Lien of the Indenture.
SECTION 1021. Purchase of Securities upon a Change of Control.
-----------------------------------------------
(a) If a Change of Control shall occur at any time, then each Holder
of Securities will have the right to require that the Trust purchase such
Holder's Securities, in whole or in part in integral multiples of $1,000, at a
purchase price (the "Change of Control Purchase Price") in cash in an amount
equal to 101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of purchase (the "Change of Control Purchase Date"),
pursuant to the offer described below (the "Change of Control Offer"). The
Change of Control Offer shall remain open until the close of business on the
Change of Control Purchase Date or such later date as may be necessary for the
Trust to comply with requirements under the Exchange Act.
(b) Within 30 days following any Change of Control, the Trust shall
notify the Trustee thereof and give written notice of such Change of Control to
each Holder of Securities by first-class mail, postage prepaid, at the address
of such Holder appearing in the Security Register, stating, among other things,
(i) that the Change of Control has occurred and that such Holder has the right
to require the Trust to repurchase such Holder's Securities at the Change of
Control Purchase Price; (ii) the circumstances and relevant facts regarding such
Change in Control (including but not limited to information with respect to pro
forma historical income, cash flow and capitalization after giving effect to
such Change in Control); (iii) the Change of Control Purchase Date, which shall
be a Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act or any applicable securities laws or
100
regulations; (iv) that any Security not tendered will continue to accrue
interest; (v) that, unless the Trust defaults in the payment of the Change of
Control Purchase Price, any Securities accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date; and (vi) the instructions a Holder must follow in order
to have its Securities repurchased in accordance with paragraph (c) of this
Section
(c) Holders electing to have Securities purchased will be required to
surrender such Securities to the Trust at the address specified in the notice at
least five Business Days prior to the Change of Control Purchase Date. Holder
will be entitled to withdraw their election if the Trust receives, not later
than three Business Days prior to the Change of Control Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities delivered for purchase by the
Holder as to which his election is to be withdrawn and a statement that such
Holder is withdrawing his election to have such Securities purchased. Holders
whose Securities are purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the Securities surrendered.
(d) The Trust will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws and regulations in connection with a Change of Control Offer.
(e) Notwithstanding anything to the contrary contained herein, the
Substitution, made in compliance with the provisions of this Indenture, will not
constitute a Change of Control.
SECTION 1022. Obtaining a Rating on the Securities.
------------------------------------
The Trust will use its best efforts to obtain a rating on the Securities by S&P
and ▇▇▇▇▇'▇ on or before June 30, 1998.
SECTION 1023. Payment of Tax Sharing Payment.
------------------------------
(a) On and after the Substitution Date, the New Obligor will cause the
▇.▇. ▇▇▇▇ Real Estate Investment Trust to deposit, or cause to be deposited, in
a collateral account in favor of the New Obligor, that portion (the "Tax
Collateral") of any Tax Sharing Payment made by the Bank and its subsidiaries to
the ▇.▇. ▇▇▇▇ Real Estate Investment Trust and its subsidiaries (other than the
Bank and its subsidiaries), in an amount equal to the benefit, if any, under the
Tax Sharing Agreement, accruing to the New Obligor as a result of interest
expense on the Securities). The New Obligor will have a first priority security
interest in the Tax Collateral until the time such amounts are paid to the New
Obligor; provided that so long as no Event of Default has occurred and is
continuing, such amounts on deposit may be used, at the written direction of the
New Obligor, for the payment of interest on the Notes.
101
(b) On and after the Substitution Date, the New Obligor will, will
cause the ▇.▇. ▇▇▇▇ Real Estate Investment Trust to or will cause any other
appropriate person to, at any time and from time to time at the expense of the
▇.▇. ▇▇▇▇ Real Estate Investment Trust, promptly give, execute, deliver, file
and/or record any financing statement, notice, instruments, certificates and
other documents and take all further action that may be necessary or that the
New Obligor or the Trustee may reasonably request in order to create, preserve,
perfect or validate the first priority security interest in the Tax Collateral.
SECTION 1024. Amendments, Etc.
---------------
The Trust will not amend, modify, or change in any manner or permit
any of its Restricted Subsidiaries to amend, modify or change in any manner, any
term or condition of its or any of its Restricted Subsidiaries' certificates of
incorporation, charters, bylaws or other similar documents or instruments,
except amendments, modifications or changes that (i) would not have an adverse
effect on the rights and remedies of the Trustee or the Holders of the
Securities, (ii) are required by this Indenture or (iii) are required by law.
SECTION 1025. Waiver of Certain Covenants.
---------------------------
The Trust may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1007 through 1019, inclusive or
Section 1022, if before or after the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Securities, by Act of
such Holders, waive such compliance in such instance with such term, provision
or condition, but no such waiver shall extend to or affect such term, provision
or condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Trust, the Restricted
Subsidiaries and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Right of Redemption.
-------------------
The Securities will be redeemable at the option of the Trust, as a
whole or from time to time in part, subject to the conditions and at the
Redemption Prices specified in the form of Security, together with accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on the relevant record dates to receive interest due on an Interest
Payment Date), on the Redemption Date.
102
SECTION 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Trust or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article Eleven.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Trust to redeem any Securities pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Trust, the Trust shall, at least 60 days prior to the Redemption
Date fixed by the Trust (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities to be redeemed and shall deliver to the Trustee such documentation
and records as shall enable the Trustee to select the Securities to be redeemed
pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal of Securities; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Security not
redeemed to less than $1,000.
The Trustee shall promptly notify the Trust in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided for in
Section 107 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed.
103
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a partial redemption, the principal
amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Security, or the
portion thereof, to be redeemed, and that interest thereon will cease to
accrue on and after said date, and
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Trust shall be given by the Trust or, at the Trust's request, by the Trustee
in the name and at the expense of the Trust.
SECTION 1106. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Trust shall deposit with the Trustee
or with a Paying Agent (or, if the Trust is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Trust shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Trust at the Redemption Price, together with accrued interest, if any, to
the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more
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Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
309.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 1108. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part shall be surrendered
at the office or agency of the Trust maintained for such purpose pursuant to
Section 1002 (with, if the Trust or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Trust and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Trust shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SECURITY AND PLEDGE OF COLLATERAL
SECTION 1201. Grant of Security Interest.
--------------------------
The Trust grants to the Trustee, for the benefit of the Trustee and
the Holders, a security interest in all its present or future right, title and
interest in and to the following (the "Collateral"):
(a) the Custodian Accounts representing the Bank Collateral Account,
the Tax Payment Collateral Account and, from and after the Substitution,
the Bank Contribution Collateral Account;
(b) the shares of Bank Stock from time to time deposited to the Bank
Collateral Account pursuant to this Article Twelve (the "Pledged Bank
Stock"), together with the certificates representing the Pledged Bank
Stock, and, subject to Section 1207(a), all dividends, cash, instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such Pledged
Bank Stock;
(c) cash and U.S. Government Securities and Financial Assets
deposited to a Custodian Account from time to time pursuant to Section
1203, Certificates of Deposit
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(whether or not they are deemed to be instruments) in which such Collateral
(or proceeds thereof) may be invested from time to time, all other
investments from time to time pursuant to Section 1203(e), all notes,
checks and other instruments and all Certificates of Deposit (whether or
not they are deemed to be instruments) from time to time held in a
Custodian Account in substitution for or in addition to or upon payment or
collection of any or all of the foregoing and, subject to Section 1207(a),
all interest, dividends, cash, instruments and other property and proceeds
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any of the foregoing;
(d) all proceeds of any and all of the foregoing (including without
limitation proceeds constituting property of the types described above);
and
(e) all of the Trust's Security Entitlements with respect to the
foregoing.
SECTION 1202. Secured Obligations.
-------------------
This Indenture secures the payment of all obligations of the Trust now
or hereafter existing under this Indenture and the Securities, whether for
principal, interest, fees, expenses or otherwise (collectively, the "Secured
Obligations"). Without limiting the generality of the foregoing, this Indenture
secures the payment of all amounts that constitute part of the Secured
Obligations and would be owed by the Trust but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Trust.
SECTION 1203. Delivery, Investment and Release of Collateral.
----------------------------------------------
(a) On the date hereof, the Trust will deposit to the Bank Collateral
Account, as Collateral, to be credited to and accounted for in the Bank
Collateral Account, certificates evidencing all Bank Stock owned legally or
beneficially by the Trust on such date, indorsed in blank or accompanied by duly
executed instruments of indorsement in blank, all in form and substance
satisfactory to the Trustee.
(b) The Trust may, on any date, deposit to the Bank Collateral
Account, as additional Collateral, to be credited to and accounted for in the
Bank Collateral Account, cash, U.S. Government Securities, additional shares of
Bank Stock and/or the Trust's Security Entitlements with respect to any or all
of the foregoing.
At the time of any deposit of Bank Stock pursuant to this subsection
(b), the Trust shall deliver to the Custodian the same certificates and
documents with respect thereto as are referred to in Section 1203(a) with
respect to Bank Stock delivered to the Custodian on the date hereof.
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(c) Upon the occurrence and during the continuance of any Default or
Event of Default, the Trust will deposit, or cause to be deposited, to the Tax
Payment Collateral Account, as additional Collateral (the "Tax Payment
Collateral"), to be credited to and accounted for in the Tax Payment Collateral
Account, cash, U.S. Government Securities and/or the Trust's Security
Entitlements with respect to any or all of the foregoing, in an aggregate amount
equal to the Benefit Amount of each Tax Sharing Payment to be made by the Bank
and its subsidiaries to the Trust and its subsidiaries (other than the Bank and
its subsidiaries) pursuant to the Tax Sharing Agreement. The Trustee will have a
first priority lien on and security interest in the Tax Payment Collateral and
the Tax Payment Collateral Account to secure the Secured Obligations. If no
Default or Event of Default is continuing and the Tax Payment Collateral has not
been applied to the Secured Obligations pursuant to the terms of this Indenture
or applied pursuant to the terms of Section 1207(c), such Tax Payment Collateral
shall be released from the Lien of this Indenture and the Trustee shall direct
that such Collateral be returned to the Trust. For purposes of this Section
1203(c) "Benefit Amount" means, with respect to any Tax Sharing Payment, an
amount equal to the tax benefit to the Affiliated Group (as defined in the
definition of Tax Sharing Agreement) of the interest expense on the Securities
for the period to which such Tax Sharing Payment relates.
(d) The Trust will, on the Substitution Date, and immediately prior
to the Substitution, deposit or cause to be deposited to the Bank Contribution
Collateral Account established by the New Obligor with the Custodian, as
additional Collateral (the "Bank Contribution Collateral"), to be credited to
and accounted for in the Bank Contribution Collateral Account, cash in an
aggregate amount equal to the Bank Contribution Amount; provided, however, if
the Bank Contribution is paid by the Trust to the Bank at the Substitution Date
in accordance with and pursuant to the terms of this Indenture, no deposit will
be required pursuant to this Section 1203(d) and the establishment of a Bank
Contribution Collateral Account shall not be required pursuant to Section
1204(b). The Trustee will have a first priority lien on and security interest in
the Bank Contribution Collateral and the Bank Contribution Collateral Account to
secure the Secured Obligations.
(e) The Trust may from time to time direct the Trustee to exchange,
or cause to be exchanged, some of the Pledged Bank Stock for other Collateral to
be provided by the Trust on the basis specified in this Section 1203(e) and to
release, or cause to be released, the Pledged Bank Stock so exchanged from the
Lien of this Indenture. Such direction shall specify the number of shares of
Pledged Bank Stock to be exchanged and upon such exchange to be released from
the Lien of this Indenture. On the date on which it shall deliver such
direction to the Trustee, the Trust will deposit, or cause to be deposited, to
the Bank Collateral Account, as additional Collateral, to be credited to and
accounted for in the Bank Collateral Account, cash, U.S. Government Securities
and/or the Trust's Security Entitlements with respect to any or all of the
foregoing, the aggregate Collateral Value of which as of such date is at least
equal to $28,000 for each share of Pledged Bank Stock (adjusted to reflect any
splits or combinations of Bank Stock after the date hereof) that the Trust has
directed the Trustee to exchange for other Collateral.
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Promptly following its receipt of such direction, such substitute
Collateral, the Officers' Certificate required by Section 1203(g), the Opinion
of Counsel required by Section 1203(h) and any documents required by Sections
103 and 1213, and, if no Default or Event of Default shall have occurred and be
continuing, the Trustee will, or will cause the Custodian to, (if necessary,
after the Custodian has received from the Bank separate certificates evidencing
the Bank Stock to be delivered to the Trust and the Bank Stock that will
continue to be Pledged Bank Stock in exchange for the certificates evidencing
the Pledged Bank Stock) deliver to the Trust certificates evidencing the number
of shares of Pledged Bank Stock that the Trust shall have directed the Trustee
to release from the Lien of this Indenture. Any shares so released shall no
longer be included in the Pledged Bank Stock.
Collateral deposited to the Bank Collateral Account under this
subsection (e) shall be credited to and accounted for in the Bank Collateral
Account and shall not be released from the Lien of this Indenture except
pursuant to Section 1207(a) or Section 1212.
(f) The Trust may, from time to time, so long as no Default or Event
of Default shall have occurred and be continuing, direct the Custodian,
(i) to invest cash in the Bank Collateral Account, the Bank
Contribution Collateral Account and the Tax Payment Collateral Account, as
the case may be, in Certificates of Deposit and/or U.S. Government
Securities and to account for such investments in the applicable account,
and
(ii) to sell Certificates of Deposit and U.S. Government Securities
in, and account for the proceeds of such sale in, the Bank Collateral
Account, the Bank Contribution Collateral Account and the Tax Payment
Collateral Account, as the case may be.
Any brokerage costs and other fees or expenses related to such sale or
investment and amounts relating to accrued or accreted interest required to be
paid to purchase any investment shall be paid by the Trust at the time of its
direction to the Custodian pursuant to this subsection (f) and not from the
Collateral. If
(x) the principal amount paid to the applicable Custodian Account on
the maturity of any Certificate of Deposit or U.S. Government Security in
the Bank Collateral Account, the Bank Contribution Collateral Account or
the Tax Payment Collateral Account, as the case may be, shall be less than
the purchase price therefor paid by the Custodian and attributable to
principal, or
(y) the price paid to the applicable Custodian Account on the sale of
any Certificate of Deposit or U.S. Government Security in the Bank
Collateral Account, the Bank Contribution Collateral Account or the Tax
Payment Collateral Account, as the
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case may be, attributable to the principal amount thereof shall be less
than the purchase price therefor paid by the Custodian and attributable to
principal,
(such difference being a "Sale Deficit Amount"), the Trustee will so notify the
Trust and the Trust, within five days after its receipt from the Trustee of such
notice, will deposit or cause to be deposited to, to be credited to and
accounted for in the Bank Collateral Account, the Bank Contribution Collateral
Account or the Tax Payment Collateral Account, as the case may be, as additional
Collateral, cash or U.S. Government Securities, and/or the Trust's Securities
Entitlements with respect to any or all of the foregoing, the aggregate
Collateral Value of which is at least equal to such Sale Deficit Amount. Any
direction by the Trust to the Custodian pursuant to this subsection (f) shall
specify the investments to be made or sold by the Custodian and account from
which such investments are to be made or sold.
Any investments and any proceeds of any sale of Collateral pursuant to
this subsection (f) shall be recorded or held in the same account as the
Collateral that was used to purchase such investment or that was sold.
Any losses on investments of Collateral, or on Collateral deposited to
any Custodian Account, shall be for the account of the Trust.
(g) On each date (other than the date hereof) on which the Trust
shall deposit Collateral to a Custodian Account, and as a condition to the
release, exchange, sale or investment of any Collateral, the Trust will deliver
to the Trustee an Officers' Certificate, dated the date of such deposit or of
any direction to effect any such release, exchange, sale or investment (as
applicable), certifying, as of the date of such Officers' Certificate, to the
effect required by Section 103 and further certifying as follows:
(i) other than with respect to a deposit of Collateral, that no
Default or Event of Default has occurred and is continuing or would occur
after giving effect to any exchange, sale, investment or release of
Collateral to occur as of such date;
(ii) if such Officers' Certificate is being delivered in connection
with the deposit of any Collateral,
(A) to the effect set forth in Sections 1205(a), (b) and (c)
and, if the Collateral being deposited includes Bank Stock, the first
sentence of Section 1205(d),
(B) (1) if such Collateral consists of cash, that it has traced
the source of such cash (describing in reasonable detail such source)
and whether or not such cash constitutes direct or indirect proceeds
of the issue and sale of the Securities, and
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(2) if such Collateral consists of Bank Stock or U.S.
Government Securities, that it has traced the source of funds used for
the purchase of such Collateral (and describing in reasonable detail
the source of such funds) and whether or not such funds constitute the
direct or indirect proceeds of the issue and sale of the Securities;
(iii) if such Officers' Certificate is being delivered in connection
with the deposit of any Collateral to remedy a Sale Deficit Amount, that
the aggregate Collateral Value, as of the date of such Officers'
Certificate, of the cash and U.S. Government Securities and/or the Trust's
Security Entitlements with respect thereto being deposited is at least
equal to the Sale Deficit Amount then being remedied;
(iv) if such Officers' Certificate is being delivered in connection
with a direction that the Trustee exchange Pledged Bank Stock for other
Collateral, as to the aggregate number of shares of Voting Stock of the
Bank and Bank Common Stock outstanding as of the date of such Officers'
Certificate and that, immediately following the release of such Pledged
Bank Stock, the Pledged Bank Stock will constitute at least 66 2/3% of the
voting power of the Voting Stock of the Bank and at least 66 2/3% of such
aggregate number of shares of outstanding Bank Common Stock.
(h) On each date on which the Trust shall deliver Collateral
pursuant to this Section 1203, the Trust will deliver to the Trustee an Opinion
of Counsel with respect to such Collateral, substantially to the effect set
forth in Section 1213(c).
(i) Any Collateral released by the Trustee pursuant to this Section
1203 shall be assigned, transferred and delivered to the Trust at the Trust's
expense, together with any necessary assignment or endorsement, against receipt
but without any recourse, warranty or representation whatsoever. The Trustee
shall, in connection with any such release, at the request and expense of the
Trust, execute and deliver to the Trust an instrument or instruments
acknowledging the release of such Collateral from the Lien of this Indenture.
(j) In connection with any delivery of Collateral pursuant to this
Section 1203, the Trust will direct the Custodian to credit and to record such
Collateral in the Bank Collateral Account, the Bank Contribution Collateral
Account or the Tax Payment Collateral Account as required by this Indenture.
SECTION 1204. Delivery and Holding of Collateral.
----------------------------------
(a) If there shall occur a change in applicable law or regulations
regarding the steps necessary to obtain and maintain a perfected security
interest in U.S. Government Securities or any other Collateral, or if there is
Collateral for which the procedures set forth in this Article Twelve, the
applicable Custodian Agreement and any related agreement of the Custodian with
respect to control of such Custodian Account are not effective to perfect a
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security interest, immediately upon the Trust having knowledge thereof the Trust
will so notify the Trustee and will deliver to the Trustee an Opinion of Counsel
setting forth the steps necessary for the Trustee to obtain and maintain such a
perfected security interest in the Collateral affected by such change or for
which the foregoing procedures are not effective to perfect a security interest,
and the Trustee, instead of the actions set forth in this Article Twelve, the
applicable Custodian Agreement and any related agreement of the Custodian with
respect to control of such Custodian Account, shall take such other action, as
specified in such Opinion of Counsel, as will create and maintain such perfected
security interest.
(b) The Trust will establish with the Custodian the Custodian
Accounts (or one or more Custodian Accounts and sub-accounts; if any sub-account
is established, references herein to an account shall include such sub-account),
(i) the "Bank Collateral Account", (ii) at the time of the Substitution, if
there is Bank Contribution Collateral, the "Bank Contribution Collateral
Account", and (iii) the "Tax Payment Collateral Account", in which all of the
Collateral held, directly or indirectly, by the Custodian shall be credited,
recorded and deposited. Each Custodian Account shall be established in the name
of the Trust. Except as provided in this Indenture, no Collateral shall be paid,
delivered or released to or for the account of, or withdrawn by or for the
account of, the Trust or any other Person from such account.
(c) The Trustee shall not be obligated to, and shall not, accept any
Collateral from the Trust if it has knowledge of or has been advised by the
Trust of any adverse claim with respect thereto, that it is overdue or has been
dishonored or of any defense against or claim to it on the part of any Person.
(d) If and to the extent that any "money" (within the meaning of
Section 9-305 of the UCC) on deposit in a Custodian Account is not a Financial
Asset held by the Custodian as a Securities Intermediary under the applicable
Custodian Agreement, the Trust shall cause the Custodian, for the benefit of the
Trustee, to maintain possession and control of such money for the benefit of the
Trustee.
SECTION 1205. Representations, Warranties and Covenants.
-----------------------------------------
The Trust represents, warrants and covenants that:
(a) As of the time of its deposit of any Collateral in a Custodian
Account pursuant to this Indenture it will be the sole beneficial owner of
such Collateral, free and clear of any Lien, except for the Lien of this
Indenture.
(b) It has full power, authority and legal right to pledge all
Collateral in which a security interest is or shall be granted by it
pursuant to this Indenture.
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(c) Upon the credit and deposit of any Collateral to a Custodian
Account (indorsed in blank or accompanied by a duly executed indorsement in
blank, in the case of certificated securities), the crediting of such
account by the Custodian with respect to such Collateral and compliance by
the Custodian with the Custodian Agreement and the related agreement of the
Custodian with respect to control of such Custodian Account, the Trustee
will have a valid and perfected first-priority Lien on such Collateral,
securing payment of the Secured Obligations.
(d) The shares of Bank Stock owned by the Trust have been duly
authorized, are validly issued, fully paid and non-assessable. As of the
date of this Indenture (i) there are 10,000,000 shares of Bank Stock
authorized and 10,000 shares of Bank Stock outstanding; (ii) the Bank has
no Voting Stock or Bank Common Stock except for Bank Stock; (iii) there are
no outstanding options, warrants, calls, convertible securities or
commitments of any character relating to any authorized and unissued Bank
Stock; (iv) the Trust owns 8,000 shares of Bank Stock; and (v) such shares
constitute 80% of all shares of Bank Stock issued and outstanding.
(e) No authorization, approval or other action by, or notice to, or
filing with, any governmental authority or regulatory body is required
under existing laws and regulations on the date hereof
(i) for the grant or perfection of the security interests
contemplated hereby or for the execution, delivery or performance of
this Indenture by the Trust, except as may be set forth in Section
1204 with respect to actions to be taken by the Trustee, the Custodian
or another Securities Intermediary holding Collateral and except for
the filings referred to in Section 1206(b) that may be required in the
future, or
(ii) for the exercise by the Trustee of the voting or other
rights provided for in this Indenture or its rights and remedies in
respect of the Collateral pursuant to this Indenture, except
(A) as may be required in connection with the disposition
of Collateral by laws affecting the offering and sale of
securities generally, and
(B) with respect to Pledged Bank Stock, (i) for
authorizations, approvals, other actions, notices and filings
that may be required pursuant to 12 U.S.C. (S) 1817(j), 12 U.S.C.
(S) 1467a, 12 C.F.R. Part 563g, 12 C.F.R. (S) 567.13 or 12 C.F.R.
(S) 574, or any successor laws or regulations, (ii) for the
filing of copies of materials pursuant to 16 C.F.R. Section
802.8(b)(1) in the event of a sale by the Trustee of the Pledged
Bank Stock to one or more purchasers required to file a notice
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of change of control with the OTS pursuant to 12 U.S.C. Section
1817(j) and 12 C.F.R. Section 574.3(b) and (iii) for the filing
of a pre-merger notification pursuant to 15 U.S.C. Section 18a
and 16 C.F.R. Part 803 in the case of any purchaser of 15% or
more of the Pledged Bank Stock which purchaser would not be
required to obtain OTS approval for such purchase pursuant to 12
U.S.C. Section 1817(j), 12 U.S.C. 1467a or 12 C.F.R. Part 574.
(f) The chief executive office of the Trust is located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Trust uses no trade
name in connection with its operations.
SECTION 1206. Further Assurances.
------------------
(a) The Trust, at any time and from time to time, at its expense,
will promptly give, execute, deliver, file and/or record any financing
statement, notice, instruments, certificates and other documents and take all
further action that may be necessary or that the Trustee may reasonably request
in order to create, preserve, perfect or validate the first-priority security
interest granted or purported to be granted hereby or to enable the Trustee to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
(b) Without limitation of the foregoing, the Trust will file or cause
to be filed, promptly following the date of this Indenture, in the appropriate
filing offices in the State of Maryland, Uniform Commercial Code financing
statements adequately describing the Collateral and, thereafter, such renewals,
amendments or continuations thereof or such additional financing statements in
such additional offices in such jurisdictions or in the appropriate filing
offices in such additional jurisdictions as shall be required from time to time
under the Uniform Commercial Code in order to perfect and to continue the
perfection of the security interest in the Collateral.
SECTION 1207. Dividends; Voting Rights; Etc.
-----------------------------
(a) So long as no Default or Event of Default shall have occurred and
be continuing, the Trust shall be entitled to receive, free of the Lien of this
Indenture, all cash dividends and distributions (other than any dividends or
distributions constituting a return of capital) and interest paid in respect of
the Collateral held in the Bank Collateral Account, and the Trustee, promptly
upon its receipt thereof, if the same are not paid directly to the Trust or the
Custodian, shall deliver the same to the Trust. Upon the occurrence and during
the continuance of a Default or an Event of Default the Trustee shall be
entitled to retain in the applicable Custodian Account and subject to the Lien
of this Indenture all such dividends, distributions and interest as additional
Collateral, and all such dividends, other distributions and interest shall, if
received by the Trust, be received in trust for the benefit of the Trustee,
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be segregated from the other property or funds of the Trust, and be forthwith
deposited to the applicable Custodian Account to be retained as additional
Collateral in the same form as so received (with any necessary endorsement or
assignment); provided that, if such Default or Event of Default, and all other
Defaults or Events of Default that shall have thereafter occurred, shall be
cured prior to the acceleration of the Securities or the exercise by the Trustee
or the Holders of any other remedies hereunder, any such dividends,
distributions and interest then being held as additional Collateral shall be
distributed to the Trust, free of the Lien of this Indenture, promptly following
the Trust's request therefor. Dividends and distributions that constitute a
return of capital and interest that is to be retained as additional Collateral
shall be retained in the Custodian Account holding the underlying security,
investment, instrument or account on which such dividend or distribution is made
or such interest is earned.
(b) The Trustee shall be entitled to retain in the applicable
Custodian Account and subject to the Lien of this Indenture all cash dividends
and distributions and interest paid in respect of the Collateral held in the Tax
Payment Collateral Account and the Bank Contribution Collateral Account as
additional Collateral, and all such dividends and other distributions and
interest shall, if received by the Trust, be received in trust for the benefit
of the Trustee, be segregated from the other property or funds of the Trust, and
be forthwith deposited to the applicable Custodian Account to be retained as
additional Collateral (with any necessary endorsement or assignment). Thereafter
such additional Collateral will be subject to the same provisions and
requirements of this Indenture as the other Collateral on deposit in such
Custodian Account.
(c) So long as no Event of Default shall have occurred and be
continuing, the Trust shall be entitled to direct the Trustee and the Custodian
in writing (or to cause the Trustee to direct the Custodian) to use the
Collateral held in the Bank Contribution Collateral Account and the Tax Payment
Collateral Account to pay interest on the Securities on any Interest Payment
Date and the Trustee, upon receipt of such written direction, shall cause such
Collateral to be sold and the proceeds thereof to be used to pay such interest.
(d) The Trust shall be entitled to exercise any and all voting and
other consensual rights relating to Collateral or any part thereof for any
purpose; provided that no vote shall be cast, and no consent, waiver or
ratification given or action taken, that would be inconsistent with or violate
Section 1214 or any other provision of this Indenture or the Securities; and
provided further that
(i) with respect to Collateral other than Pledged Bank Stock, the
Trust shall no longer have such rights, and such rights shall be vested in
the Trustee, upon notice from the Trustee to the Trust following the
occurrence and during the continuance of a Default or an Event of Default,
and
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(ii) with respect to Pledged Bank Stock, the Trust shall no longer
have such rights, and such rights shall be vested in the Trustee, on five-
day's advance notice from the Trustee to the Trust following the occurrence
and during the continuance of an Event of Default and subject to the
satisfaction of any regulatory requirements.
(e) In order to permit the Trustee to exercise the voting and other
consensual rights which it may be entitled to exercise pursuant to Section
1207(d), and to receive all dividends and distributions that it may be entitled
to receive under Section 1207(a), the Trust will, upon written notice from the
Trustee, from time to time execute and deliver to the Trustee such proxies and
other instruments as the Trustee may reasonably request.
SECTION 1208. Trustee Appointed Attorney-in-Fact.
----------------------------------
The Trust appoints the Trustee as its attorney-in-fact, with full
authority in the place and stead and in its name or otherwise, from time to time
in the Trustee's discretion, to take any action and to execute any instrument
which the Trustee may deem necessary or advisable in order to accomplish the
purposes of this Article Twelve, including to receive, endorse and collect all
instruments made payable to the Trust representing any dividend, interest
payment or other distribution in respect of the Collateral or any part thereof
and to give full discharge for the same. This power, being coupled with an
interest, is irrevocable.
SECTION 1209. Trustee May Perform.
-------------------
If the Trust fails to perform any agreement contained in this Article
Twelve, the Trustee may, but shall not be obligated to, itself perform, or cause
performance of, such agreement, and the expenses of the Trustee incurred in
connection therewith shall be payable by the Trust under Section 607.
SECTION 1210. Remedies upon Event of Default.
------------------------------
If any Event of Default shall have occurred and be continuing, the
Trustee may exercise in respect of the Collateral, subject, in the case of
Pledged Bank Stock, to the satisfaction of any regulatory requirements, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies provided a secured party upon the default of
a debtor under the Uniform Commercial Code at that time, and the Trustee may
also, without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Trustee's offices or elsewhere, for cash, on
credit or for future delivery, upon such terms as the Trustee may determine to
be commercially reasonable, and the Trustee or any Holder may be the purchaser
of any or all of the Collateral so sold and, subject to any applicable
requirements of Section 9-504(4) of the Uniform Commercial Code, thereafter hold
the same, absolutely, free from any right or claim of whatsoever kind. The
Trust agrees that, to the extent notice of sale shall be required by law, at
least 30 days' notice to it (in the case of
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Pledged Bank Stock) or 10 days' notice to it (in the case of any other
Collateral) of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. The Trustee
shall not be obligated to make any sale of Collateral regardless of notice of
sale having been given. The Trustee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The Trustee shall incur no liability as a result of the sale of the
Collateral, or any part thereof, at any private sale conducted in a commercially
reasonable manner and in accordance with Section 9-504(3) of the Uniform
Commercial Code and any other applicable legal requirements. The Trust hereby
waives any claims against the Trustee arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at the public sale, even if the
Trustee accepts the first offer received and does not offer such Collateral to
more than one offeree.
The Trust recognizes that, by reason of certain prohibitions contained
in the Securities Act and applicable state securities laws, the Trustee may be
compelled, with respect to any sale of certain of the Collateral, to limit
purchasers to those who will agree, among other things, to acquire such
securities for their own account, for investment, and not with a view to the
distribution or resale thereof. The Trust acknowledges and agrees that any such
sale may result in prices and other terms less favorable to the seller than if
such sale were a public sale without such restrictions. The Trustee shall be
under no obligation to delay the sale of any of the Pledged Shares for the
period of time necessary to permit the Trust to register such securities for
public sale under the Securities Act, or under applicable state securities laws,
even if the Trust would agree to do so.
In connection with the exercise of its rights and remedies under this
Article Twelve or otherwise available to it, the Trustee is authorized to file
such notices, applications and filings as may be necessary or appropriate in
respect of the Pledged Bank Stock.
The Trustee is not authorized or empowered to take any action or
exercise any rights or remedies under this Article Twelve or otherwise available
to it that would expose any Holder to liability under the Capital Maintenance
Agreement or any capital restoration plan guaranty applicable to the Bank.
Neither this Indenture, nor the exercise by the Trustee or any Holder of any
remedies hereunder, nor the acquisition of the Pledged Bank Stock by the Trustee
or any other Person in any foreclosure sale or otherwise, is intended to cause
the Trustee, any Holder or any other Person to have any successor liability
under the Capital Maintenance Agreement.
SECTION 1211. Application of Proceeds.
-----------------------
Upon the occurrence and during the continuance of an Event of Default
and after the acceleration of the Securities pursuant to Section 502 (so long as
such acceleration has not been rescinded) any cash held as Collateral and all
cash proceeds received in respect of any
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sale of, collection from, or other realization upon, all or any part of the
Collateral, shall be applied by the Trustee in the manner specified in Section
506.
SECTION 1212. Continuing Lien; Termination.
----------------------------
Except as provided in Section 1203 and 1207(a) and this Section 1212,
this Indenture shall create a continuing Lien on the Collateral that shall (a)
remain in full force and effect until the payment in full of all Secured
Obligations, (b) be binding upon the Trust and its successors and assigns and
(c) inure to the benefit of the Trustee and its successors, transferees and
assigns.
Notwithstanding anything to the contrary in this Article Twelve, upon
(a) satisfaction by the Trust of the conditions set forth in Article
Four to the satisfaction and discharge of this Indenture,
(b) the payment in full of all Secured Obligations, or
(c) the defeasance of the Securities and this Indenture as provided
in Section 1302,
the security interests created under this Indenture shall terminate, and the
Trustee shall, at the request and expense of the Trust, cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral, to or on the order of the
Trust and shall execute and deliver to the Trust an instrument or instruments
acknowledging the release of such Collateral from the Lien of this Indenture.
SECTION 1213. Certificates and Opinions.
-------------------------
(a) The Trust will furnish to the Trustee, a certificate or opinion
of an engineer, appraiser or other expert as to the fair value:
(i) of any property or securities to be released from the Lien of
this Indenture, which certificate or opinion shall state that in the
opinion of the Person making the same the proposed release will not impair
the security under this Indenture in contravention of the provisions
thereof, and which certificate or opinion shall be made by an independent
engineer, appraiser or other expert, if the fair value of such property or
securities and of all other property or securities released since the
commencement of the then-current calendar year, as set forth in the
certificates or opinions required by this subsection (i), is 10% or more of
the aggregate principal amount of the Securities at the time Outstanding;
but such a certificate or opinion of an independent engineer, appraiser or
other expert shall not be required in the case of any
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release of property or securities, if the fair value thereof as set forth
in the certificate or opinion required by this subsection (i) is less than
$25,000 or less than 1% of the aggregate principal amount of the Securities
at the time Outstanding;
(ii) to the Trust of any securities, the deposit of which is to be
made the basis for the withdrawal of cash constituting a part of the trust
estate or the release of property or securities subject to the Lien of this
Indenture, and if the fair value to the Trust of such securities and of all
other such securities made the basis of any such withdrawal or release
since the commencement of the then current calendar year, as set forth in
the certificates or opinions required by this subsection (ii), is 10% or
more of the aggregate principal amount of the Securities at the time
Outstanding, such certificate or opinion shall be made by an independent
engineer, appraiser or other expert; but such certificate of an independent
engineer, appraiser or other expert shall not be required with respect to
any securities so deposited, if the fair value thereof to the Trust as set
forth in the certificate or opinion required by this subsection (ii) is
less than $25,000 or less than 1% of the aggregate principal amount of the
Securities at the time Outstanding; and
(iii) to the Trust of any property the subjection of which to the
Lien of this Indenture is to be made the basis for the withdrawal of cash
constituting a part of the trust estate, or the release of property or
securities subject to the Lien of this Indenture, and if
(A) within six months prior to the date of acquisition thereof
by the Trust, such property has been used or operated by a person or
persons other than such obligor, in a business similar to that in
which it has been or is to be used or operated by the Trust, and
(B) the fair value to the Trust of such property as set forth
in such certificate or opinion is not less than $25,000 and not less
than 1% of the aggregate principal amount of the Securities at the
time Outstanding,
such certificate or opinion shall be made by an independent engineer,
appraiser or other expert.
Any such certificate or opinion may be made by an officer or employee
of the Trust who is duly authorized to make such certificates or opinions by the
Trust from time to time, except in cases in which this subsection (a) requires
that such certificate or opinion be made by an independent person. In such
cases, such certificate or opinion shall be made by an independent engineer,
appraiser or other expert selected or approved by the Trustee in the exercise of
reasonable care.
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At the time it shall deliver to the Trustee any certificate pursuant
to clause (i) of this subsection (a), the Trust also shall deliver to the
Trustee an Officers' Certificate as to whether or not a Default or an Event of
Default has occurred and is at such time continuing.
(b) Promptly after the execution and delivery of this Indenture, the
Trust will deliver to the Trustee an Opinion of Counsel either stating that in
the opinion of such counsel this Indenture has been properly recorded and filed
so as to make effective the Lien intended to be created hereby, and reciting the
details of such action, or stating that in the opinion of such counsel no such
action is necessary to make such Lien effective.
(c) Not later than the 120th day after the end of each of its fiscal
years, beginning with its fiscal year ending in 1998, the Trust will deliver to
the Trustee an Opinion of Counsel either stating that in the opinion of such
counsel such action has been taken with respect to the recording, filing, re-
recording and refiling of this Indenture as is necessary to maintain the Lien of
this Indenture, and reciting the details of such action, or stating that in the
opinion of such counsel no such action is necessary to maintain such Lien. Such
Opinion of Counsel shall also state such actions as may be necessary or
appropriate in order to obtain and maintain a perfected security interest in the
Collateral, if such actions are other than as provided in this Indenture, or
shall state that no such actions shall be necessary or appropriate other than as
provided in this Indenture.
SECTION 1214. Additional Covenants of the Trust.
---------------------------------
Until such time as the Secured Obligations shall have been paid in
full, the Trust shall
(a) not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option or other right with respect to, any of the
Collateral, or create or permit to exist any Lien upon or with respect to
the Collateral, except (i) for the Lien of this Indenture, (ii) as
permitted under Section 1203(e) and (iii) for any such right that shall not
be effective until the Lien of this Indenture on the Collateral shall have
been terminated pursuant to Section 1212;
(b) not permit the Bank to adopt any resolution, by-law, charter
amendment or other proposal, or enter into any contractual restriction, the
effect of which would be to
(i) alter the number of shares of Voting Stock that must be
voted in favor of any matter to cause its adoption by the Bank or,
except to the extent required by law or that the charter of the Bank
may otherwise provide as of the date of this Indenture, permit any
charter, by-law or other provisions applicable to any class or series
of Voting Stock of the Bank to provide for a class or series vote or
that any action or resolution may be taken or adopted by holders of
the
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shares of such class or series other than by the vote of a majority
thereof at a meeting duly called and held at which a quorum is present
or the consent of holders of at least a majority of the shares of such
class or series then outstanding, or any class, or
(ii) classify any directors of the Bank (beyond any
classification in effect on the date hereof), permit cumulative voting
for directors or take any action that would diminish the ability of a
holder of Pledged Bank Stock to remove directors;
(c) not use any portion of the proceeds of the issue and sale of the
Securities for the purpose, whether immediate or incidental, of
(i) buying or carrying "margin stock" within the meaning of
Regulation G prior to April 1, 1998 or "Margin Stock" within the
meaning of Regulation U or any successor provision thereto on and
after April 1, 1998, or
(ii) buying, carrying or trading in "securities" within the
meaning of Regulation T (12 C.F.R. Part 220, as amended) or buying or
carrying any part of an investment contract security which shall be
deemed credit for the purpose of buying or carrying the entire
security; and
(d) not change its chief executive office, or change its name,
identity or corporate structure in any manner that might make any financing
or continuation statements filed hereunder seriously misleading within the
meaning of Section 9-402(7) of the Uniform Commercial Code (or any other
applicable provision of the Uniform Commercial Code), unless it shall have
given the Trustee at least 10 days' prior notice thereof (which notice also
shall specify the new principal place of business and chief executive
office of the Trust, if applicable) and an Opinion of Counsel to the effect
specified in Section 1213(c) and unless it shall have taken all such action
as may be required under Section 1206 as a result of such change.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Trust's Option to Effect Defeasance or Covenant
-----------------------------------------------
Defeasance.
----------
The Trust may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 1302 or Section 1303 be
applied to all Outstanding Securities upon compliance with the conditions set
forth below in this Article Thirteen.
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SECTION 1302. Defeasance and Discharge.
------------------------
Upon the Trust's exercise under Section 1301 of the option applicable
to this Section 1302, the Trust shall be deemed to have been discharged from its
obligations with respect to all Outstanding Securities on the date the
conditions set forth in Section 1304 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Trust shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Securities, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 1305 and the other Sections of this Indenture referred to in
(A) and (B) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Trust, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of
Outstanding Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section 1304, payments in
respect of the principal of (and premium, if any, on) and interest on such
Securities when such payments are due, (B) the Trust's obligations with respect
to such Securities under Sections 304, 305, 308, 1002 and 1003, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article Thirteen. Subject to compliance with this Article Thirteen, the Trust
may exercise its option under this Section 1302 notwithstanding the prior
exercise of its option under Section 1303 with respect to the Securities.
SECTION 1303. Covenant Defeasance.
-------------------
Upon the Trust's exercise under Section 1301 of the option applicable
to this Section 1303, the Trust shall be released from its obligations under any
covenant contained in Sections 801 and 1009 through 1024 (inclusive) with
respect to the Outstanding Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "covenant defeasance"), and the
Securities shall thereafter be deemed not to be "Outstanding" for the purposes
of any direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Trust may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 501(iv),
but, except as specified above, the remainder of this Indenture and such
Securities shall be unaffected thereby.
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SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
1302 or Section 1303 to the Outstanding Securities:
(1) The Trust shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 608 who shall agree to comply with the provisions of this
Article Thirteen applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A)
money in United States dollars in an amount, or (B) U.S. Government
Obligations (as defined below) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of (and premium, if
any, on) and interest on the Outstanding Securities on the Stated Maturity
(or Redemption Date, if applicable) of such principal (and premium, if any)
or installment of interest; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such U.S.
Government Obligations to said payments with respect to the Securities.
Before such a deposit, the Trust may give to the Trustee, in accordance
with Section 1103 hereof, a notice of its election to redeem all of the
Outstanding Securities at a future date in accordance with Article Eleven
hereof, which notice shall be irrevocable. Such irrevocable redemption
notice, if given, shall be given effect in applying the foregoing. For this
purpose, "U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which
its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of
1933, as amended), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such
U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal of or interest on the U.S. Government
Obligation evidenced by such depository receipt.
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(2) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as clause (x) and (xi) of Section 501 is concerned, at any time
during the period ending on the 91/st/ day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period).
(3) Such defeasance or covenant defeasance will not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Trust is a party or
by which it is bound.
(4) In the case of an election under Section 1302, the Trust shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Trust has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since March 25, 1998, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the Holders
of the Outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred.
(5) In the case of an election under Section 1303, the Trust shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant
defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
(6) The Trust must deliver to the Trustee an Opinion of Counsel to
the effect that after the 91/st/ day following the deposit or after the
date such Opinion of Counsel is delivered the trust funds will not be
subject to the effect of any applicable bankruptcy, insolvency,
receivership, conservatorship, reorganization or similar laws affecting
creditors' rights generally (including, without limitation, laws relating
to fraudulent and avoidable transfers).
(7) The Trust must deliver to the Trustee an Officers' Certificate
stating that the deposit was not made by the Trust with the intent of
preferring the Holders of the Securities over the other creditors of the
Trust or with the intent of defeating, hindering, delaying or defrauding
creditors of the Trust.
(8) No event or condition may exist that would prevent the Trust from
making payments of the principal of (and premium, if any, on), and interest
on the Securities, on the date of such deposit.
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(9) The Trust shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1302
or the covenant defeasance under Section 1303 (as the case may be) have
been complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
-----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
---------------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee--collectively for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Trust acting
as its own Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal
(and premium, if any) and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Trust shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Trust from time to time upon Trust Request
any money or U.S. Government Obligations held by it as provided in Section 1304
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance, as
applicable, in accordance with this Article.
SECTION 1306. Reinstatement.
-------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Trust's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1302 or 1303, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 1305; provided, however, that if the Trust makes any payment of
principal of (or premium, if any, on) or interest on any Security following the
reinstatement of its obligations, the Trust shall be
124
subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE FOURTEEN
SUBSTITUTION OF NEW OBLIGOR
SECTION 1401. Substitution of Obligor Under the Indenture.
-------------------------------------------
The Trust may at any time on or after January 1, 1999, so long as no
Default or Event of Default has occurred and is continuing under this Indenture,
without the consent of the Holders of the Securities and notwithstanding, except
as set forth below, the other provisions of this Indenture, transfer the Capital
Stock of the Bank and any other Collateral (in each case subject to the Lien of
the Indenture) owned by the Trust, make the Bank Contribution and contribute
capital in the form of Cash Equivalents, in each case to a corporation formed by
the Trust (the "New Obligor") and substitute (the "Substitution") the New
Obligor as the debtor in respect of all obligations arising from the Securities
and the Indenture (as amended pursuant to Section 1402), including the
obligation to make a Change of Control Offer and to purchase the Securities in
connection therewith, if:
(a) the New Obligor is a corporation duly organized and validly
existing under the laws of the United States of America, any state thereof
or the District of Columbia and, at the time of the Substitution and
immediately after giving effect thereto, the New Obligor has no assets,
other than ownership of the Capital Stock of the Bank, the Collateral, the
Bank Contribution and Cash Equivalents, no indebtedness other than the
Securities, and no operations;
(b) the New Obligor has obtained all necessary governmental approvals
and authorizations for the Substitution, including with respect to the
ownership of the common stock and the Voting Stock of the Bank;
(c) if the Securities have been registered for resale with the
Commission, such Securities will continue to be so registered after the
Substitution, and if the Securities have not been so registered, the New
Obligor will assume the obligations of the Trust under the Registration
Rights Agreement;
(d) no "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or, as a
result of the Substitution, becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all securities that such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or
125
indirectly, of more than 50% of the total voting power of the Voting Stock
of the New Obligor;
(e) at the time of the Substitution, the New Obligor becomes the
direct legal and beneficial owner of all outstanding common stock and
Voting Stock of the Bank owned by the Trust immediately prior thereto;
(f) the obligations of the New Obligor under the Indenture and the
Securities are secured by a first priority perfected security interest in
the Pledged Bank Stock and the other Collateral, if any;
(g) legal opinions, in form and substance satisfactory to the
Trustee, shall have been delivered to the Trustee (from whom copies will be
available) (in each case dated the date of the Substitution) from
independent legal counsel selected by the Trust and reasonably satisfactory
to the Trustee, confirming, as appropriate and with respect to applicable
law, that upon the Substitution taking place (1) the requirements of the
Indenture and the Securities as to the giving of notice to the Holders of
the Securities have been met, (2) the Securities, the Indenture (as amended
pursuant to Section 1402) and the Registration Rights Agreement are legal,
valid and binding obligations of the New Obligor enforceable in accordance
with their terms under the laws of the State of New York and the
jurisdiction of organization of the New Obligor, (3) the Trustee, on behalf
of the Holders of the Securities, has a valid perfected first priority
security interest in the Collateral, (4) the New Obligor is not required to
be registered as an investment company under the Investment Company Act of
1940, (5) the new Obligor has all necessary government authorizations and
approvals with respect to the Substitution and no registration with respect
to the transfer is required by any state or federal securities law that has
not been obtained, (6) the Substitution and related transfers described
above will not constitute a fraudulent conveyance, and (7) the Holders of
the outstanding Securities will not recognize income, gain or loss for
federal income tax purposes as a result of the Substitution and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Substitution had not
occurred;
(h) immediately after giving effect to the Substitution on a pro
forma basis, no Default or Event of Default under the Securities or the
Indenture (as amended pursuant to Section 1402) will have occurred and be
continuing;
(i) immediately after giving effect to the Substitution on a pro
forma basis, the Consolidated Net Worth of the Bank is equal to or greater
than the Consolidated Net Worth of the Bank immediately prior to the
Substitution and the Consolidated Net Worth of the New Obligor is positive
(determined, in the case of the New Obligor, excluding the Bank and its
subsidiaries and the Securities), and the Trustee, on behalf of the Holders
of the Securities, will have received a solvency opinion from a nationally
126
recognized expert as to the solvency of the New Obligor after giving effect
to the Substitution;
(j) the New Obligor expressly assumes, by a supplemental indenture in
form satisfactory to the Trustee, the Trust's obligation for the due and
punctual payment of the principal of, premium, if any, and interest on all
the Securities and the performance and observance of every covenant of the
Indenture (as amended pursuant to Section 1402) on the part of the Trust to
be performed or observed; and
(k) at the time of the Substitution the Trust will have delivered, or
caused to be delivered, in form and substance reasonably satisfactory to
the Trustee, an Officers' Certificate and an Opinion of Counsel, each
stating that the Substitution, and the supplemental indenture required in
connection therewith, comply with the requirements of the Indenture and
that all conditions precedent therein provided for relating to such
transaction have been complied with.
At the Substitution Date and immediately prior to the Substitution,
the Trust will, at its option, either (a) make a cash capital contribution to
the Bank or (b) make a cash payment or contribution to the New Obligor that will
be deposited into the Bank Contribution Collateral Account with the Custodian,
in either case in an amount equal to the Bank Contribution.
Upon consummation of the Substitution in accordance with the terms of
the Indenture, the New Obligor shall succeed to, and be substituted for, and may
exercise every right and power of, the Trust under the Indenture (as amended
pursuant to Section 1402) and the Securities, except as specifically provided in
the Indenture. When the New Obligor assumes all the obligations of the Trust
under this Indenture (as amended pursuant to Section 1402), the Securities and
the Registration Rights Agreement, the Trust shall be released from those
obligations.
Notice of the Substitution will be mailed at least 30 days but not
more than 60 days before the Substitution Date to each Holder of Securities at
such Holder's last address as it appears in the Security Register.
SECTION 1402. Supplemental Indenture.
----------------------
Upon the Substitution, and pursuant to the supplemental indenture to
be entered into by the New Obligor, the Trustee and the Trust in connection
therewith:
(a) all references in this Indenture and the Securities to the
"Trust" will be read to be references to the "New Obligor" and all
references to "Board of Trustees" will be read to be references to the
"Board of Directors";
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(b) The definitions of "Advisory Fees," "Disinterested Trustee,"
"Management Agreements," "Nonrecourse Indebtedness," "Permitted Subsidiary
Indebtedness," "Real Estate Property," "Reimbursement Agreement," "Retail
Notes" and "Single Asset Subsidiary" and Section 1018 and this Article
Fourteen will be deleted in their entirety.
(c) The following definitions will be added to the Indenture:
"Board of Directors" means either the board of directors of the New
Obligor or any duly authorized committee of that board.
"Current Interest Loan" means unsecured Indebtedness of the New
Obligor, the proceeds of which are used to pay interest on the Securities,
made pursuant to a loan that (a) does not mature prior to 2 years after the
final Stated Maturity of the Securities, (b) requires no payment of
principal or interest (except as provided under clause (b)(xi) of Section
1011) prior to the final Stated Maturity of the Securities, (c) will not
permit acceleration or the occurrence of an event of default thereunder
prior to the final Stated Maturity of the Securities and (d) requires the
maker of such loan to agree not to join in any petition for the involuntary
bankruptcy of the New Obligor.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the Board of Directors of the
New Obligor who does not have any material direct or indirect financial
interest in or with respect to such transaction or series of related
transactions.
"Pledged Subsidiary" has the meaning set forth in clause (b)(ix) of
Section 1011.
(d) The definitions of "Asset Sale", "Cash Flow--Indenture",
"Permitted Indebtedness", "Permitted Investment", "Restricted Subsidiary" and
"Unrestricted Subsidiary" will be amended and restated in their entirety to read
as follows:
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a
"transfer"), directly or indirectly, in one or a series of related
transactions, of (a) any Capital Stock of any Restricted Subsidiary; (b)
all or substantially all of the properties and assets of any division or
line of business of the New Obligor or its Restricted Subsidiaries; or (c)
any other properties or assets of the New Obligor or any Restricted
Subsidiary other than in the ordinary course of business. For the purposes
of this definition, the term "Asset Sale" shall not include any transfer of
properties or assets or Capital Stock (i) that is governed by the
provisions of the Indenture described under Article Eight, (ii) in
compliance with the Section 1011, or (iii) of any Restricted Subsidiary
(other than the Pledged Subsidiary) to the New Obligor or any other
Restricted Subsidiary.
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"Cash Flow--Indenture" means with respect to the New Obligor, for any
period, all as determined in accordance with GAAP on a consolidated basis
for the New Obligor and its Restricted Subsidiaries (other than the Bank
and its Subsidiaries) and without duplication, the sum of the following
items for such period: (a) consolidated net income (or loss), plus (b)
depreciation and amortization expense, plus (c) interest expense, plus (d)
equity in losses of investments, less (e) equity in earnings of
investments, plus (f) losses on sales of property, less (g) gains on sales
of property, plus (h) non-cash charges, less (i) non-cash gains, plus (j)
cash distributions received from investments, plus (k) the provision for
federal, state, local and foreign income taxes, plus (l) tax sharing
payments received by the New Obligor, plus (m) dividends received by the
New Obligor from the Bank or any other Restricted Subsidiary.
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of the New Obligor pursuant to the Securities;
(b) obligations of the New Obligor or any Restricted Subsidiary
pursuant to Interest Rate Agreements designed to protect the New Obligor or
such Restricted Subsidiary, as the case may be, against fluctuations in
interest rates in respect of Indebtedness of the New Obligor or such
Restricted Subsidiary, as the case may be, which obligations do not exceed
the aggregate principal amount of such Indebtedness;
(c) Indebtedness of the New Obligor or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of purchase
price adjustments in connection with the acquisition or disposition of
assets;
(d) Indebtedness of any Restricted Subsidiary under any
warehouse lines of credit, repurchase agreements or similar facilities that
(a) is incurred for the purpose of funding the origination or purchase of
credit card receivables, home equity loan receivables, automobile loans,
leases or installment sales contracts, other consumer receivables, mortgage
loans or mortgage notes that are initially intended to be sold to investors
and (b) is secured by credit card receivables, home equity loan
receivables, automobile loans, leases or installment sales contracts, other
consumer receivables, mortgage loans, mortgage notes, mortgage-backed
securities or any combination thereof owned by such Restricted Subsidiary;
(e) Indebtedness of the New Obligor or any Restricted Subsidiary
in an aggregate principal amount outstanding at any one time (without
duplication) not in excess of $20,000,000 plus 50% of the increase in
Consolidated Net Worth of the New Obligor from the Substitution Date;
provided, however, that such increase in Consolidated Net Worth of the New
Obligor will exclude the
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effect of any change in the valuation of the initial investment in the Bank
as recorded on the Substitution Date;
(f) Indebtedness of the New Obligor (at such time as the New
Obligor is not a Wholly Owned Subsidiary of the Trust) to any Person (other
than the Bank or its Subsidiaries) under Current Interest Loans in an
aggregate amount outstanding at any time to all such Persons not in excess
of $40,000,000 (plus any accrued and unpaid interest);
(g) Indebtedness of any Wholly Owned Restricted Subsidiary
(other than the Bank and its Subsidiaries and the Pledged Subsidiary) to
the New Obligor, to the extent permitted by Section 1011, except that any
transfer of any such Indebtedness by the New Obligor to any other Person
shall be deemed to be an incurrence of Indebtedness;
(h) obligations of the New Obligor under the Capital Maintenance
Agreement; provided, however, that this clause (h) is not intended to
include any Indebtedness incurred by the New Obligor in connection with
complying with its obligations pursuant to such agreement;
(i) Indebtedness of the Pledged Subsidiary incurred pursuant to
clause (b)(ix) of Section 1011;
(j) obligations of the Pledged Subsidiary pursuant to hedge
transactions incurred in the ordinary course of business to protect such
Restricted Subsidiary's loan portfolio against fluctuations in prices
resulting from changes in interest rates;
(k) Indebtedness of the New Obligor to the Pledged Subsidiary,
the proceeds of which are used to pay interest on the Securities, except
that any transfer of such Indebtedness by the Pledged Subsidiary will be
deemed to be an incurrence of Indebtedness by the New Obligor; and
(l) any renewals, extensions, substitutions, refinancings or
replacements and any successive refinancings (each, for purposes of this
clause (l), a "refinancing") by the New Obligor or any Restricted
Subsidiary of any Indebtedness of the New Obligor or such Restricted
Subsidiary referred to in clause (e) of this definition and any
Indebtedness of the New Obligor or any Restricted Subsidiary incurred in
accordance with Section 1011 (other than Permitted Indebtedness), so long
as (i) any such new Indebtedness shall be in a principal amount that does
not exceed the principal amount (or, if such Indebtedness being refinanced
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof,
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such lesser amount as of the date of determination) so refinanced, plus the
amount of any premium required to be paid under the terms of the instrument
governing such Indebtedness being so refinanced or the amount of any
premium reasonably determined by the New Obligor or such Restricted
Subsidiary, as the case may be, as necessary to accomplish such refinancing
through means of a tender offer or privately negotiated transaction and
(ii) in the case of any refinancing of Indebtedness that is Subordinated
Indebtedness, (A) such new Indebtedness is made subordinate to the
Securities at least to the same extent as the Subordinated Indebtedness
being refinanced and (B) such new Indebtedness has an Average Life to
Stated Maturity and final Stated Maturity of principal that exceeds the
Average Life to Stated Maturity and final Stated Maturity of the
Subordinated Indebtedness being refinanced).
"Permitted Investment" means any Investment (i) in cash, (ii) in Cash
Equivalents, (iii) of up to $10,000,000 in Wholly Owned Restricted
Subsidiaries, (iv) in or by the Bank or its Subsidiaries, (v) in
consideration, not constituting Cash Equivalents, received pursuant to an
Asset Sale made in compliance with Section 1017 in an aggregate amount of
up to 25% of the consideration received with respect to such Asset Sale,
(vi) constituting cash advances on an intercompany open account basis (A)
from the New Obligor to its Restricted Subsidiaries required for working
capital, the payment of interest and premium, if any, on and principal of
any Indebtedness, expenditures for maintenance and capital improvements,
and other operating expenses, to the extent Restricted Subsidiaries have
advanced cash to the New Obligor or (B) from any Restricted Subsidiary to
the New Obligor, of excess cash on hand from time to time, in each case
made in the ordinary course of business and consistent with past practice,
or (vii) in any Wholly Owned Restricted Subsidiary of the New Obligor
resulting from the acquisition of such Subsidiary for Qualified Capital
Stock of the New Obligor or for Qualified Capital Stock of the Trust, such
Subsidiary at the time of such acquisition owning Qualified Capital Stock
of the Bank and having no other assets in excess of $1,000,000 and no
Indebtedness or operations.
"Restricted Subsidiary" means the Bank and its Subsidiaries, the
Pledged Subsidiary and any other Subsidiary of the New Obligor that is not
an Unrestricted Subsidiary.
"Unrestricted Subsidiary" means (i) any Subsidiary of the New Obligor
that at the time of determination shall be an Unrestricted Subsidiary (as
designated by the Board of Directors as provided below) and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may
designate (a "Designation") any Subsidiary of the New Obligor (other than
the Bank or any of its Subsidiaries, or a Subsidiary that owns any Capital
Stock of, or owns, or holds any Lien on, any property of the New Obligor or
any other Restricted Subsidiary of the New Obligor that is not a Subsidiary
of the Subsidiary to be so designated) to be an Unrestricted Subsidiary if:
(a) no
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Default or Event of Default shall have occurred and be continuing at the
time of or after giving effect to such Designation; and (b) the New Obligor
could make an Investment in such Unrestricted Subsidiary at the time of
such Designation (assuming the effectiveness thereof) in an amount (the
"Designation Amount") equal to the Fair Market Value of the Capital Stock
of such Subsidiary on such date. In the event of any such Designation, the
New Obligor shall be deemed to have made an Investment constituting a
Restricted Payment pursuant to Section 1011 of this Indenture for all
purposes of this Indenture in the Designation Amount. The Board of
Directors may revoke (a "Revocation") any Designation of a Subsidiary as an
Unrestricted Subsidiary if: (a) no Default or Event or Default shall have
occurred and be continuing at the time of and after giving effect to such
Revocation; and (b) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if
incurred at such time, have been permitted to be incurred under the
Indenture. Any Designation or Revocation must be evidenced by a Board
Resolution certifying compliance with the foregoing provisions.
(e) Sections 1010, 1011, 1012, 1014, 1016, 1017, 1018 and 1019 will
be amended and restated in their entirety to read as follows:
Section 1010. Limitation on Indebtedness. The New Obligor will not,
--------------------------
and will not permit any Restricted Subsidiary (other than the Bank and its
Subsidiaries) to, create, issue, assume, guarantee or otherwise in any
other manner become directly or indirectly liable for the payment of, or
otherwise incur (collectively, "incur"), any Indebtedness (including any
Acquired Indebtedness), other than Permitted Indebtedness, unless at the
time of such incurrence the New Obligor's Operating Cash Flow Coverage
Ratio for the four full fiscal quarters immediately preceding the
incurrence of such Indebtedness (or, if the period since the Substitution
Date is less than four fiscal quarters, such shorter period on an
annualized basis; provided that in no event will such shorter period be
less than one fiscal quarter), taken as one period and after giving pro
forma effect to (i) the incurrence of such Indebtedness (and all other
Indebtedness incurred by the New Obligor and its Restricted Subsidiaries
since the end of the most recently completed fiscal quarter of the New
Obligor preceding the date of determination) and (if applicable) the
application of the net proceeds therefrom (and from any such other
Indebtedness), including to refinance other Indebtedness, as if such
Indebtedness (and any such other Indebtedness) had been incurred on the
first day of such four-quarter period (or, if the period since the
Substitution Date is less than four fiscal quarters, the first day of such
shorter period) and (ii) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any
company, entity or business acquired or disposed of by the New Obligor or
its Restricted Subsidiaries, as the case may be, since the first day of
such four quarter period (or, if the period since the Substitution Date is
less than four fiscal quarters, the first day of such shorter period), as
if such acquisition or disposition occurred on the first day of such four
quarter period (or, if the period since the Substitution Date is less
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than four fiscal quarters, the first day of such shorter period), would
have been greater than or equal to (x) 2.0 to 1.0 prior to April 1, 1999,
(y) 2.25 to 1.0 on and after April 1, 1999 and prior to April 1, 2000 and
(z) 2.50 to 1.0 thereafter.
Section 1011. Limitation on Restricted Payments. (a) The New
---------------------------------
Obligor will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, take any of the following actions:
(i) declare or pay any dividend on, or make any distribution
to holders of, any shares of the Capital Stock of the New Obligor
(other than dividends or distributions payable solely in shares of the
Qualified Capital Stock of the New Obligor or in options, warrants or
other rights to acquire such shares of Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Capital Stock of the New Obligor or any
direct or indirect parent of the New Obligor or any options, warrants
or other rights to acquire such Capital Stock;
(iii) declare or pay any dividend on, or make any distribution
to holders of, any Capital Stock of any Restricted Subsidiary (other
than with respect to (A) any such Capital Stock held by the New
Obligor or any of its Wholly Owned Restricted Subsidiaries or (B) any
such Capital Stock of the Bank or any of its Subsidiaries) or
purchase, redeem or otherwise acquire or retire for value, any Capital
Stock of any Subsidiary of the New Obligor (other than (A) any such
Capital Stock of any Wholly Owned Restricted Subsidiary (other than
the Bank and its Subsidiaries), (B) any Capital Stock held by the Bank
or its Subsidiaries of any of their Subsidiaries or (C) any Capital
Stock of any Securitization Entity that is a Subsidiary of the Bank);
(iv) make any principal payment on or repurchase, redeem,
defease or otherwise acquire or retire for value, prior to any
scheduled principal payment, scheduled sinking fund payment or
maturity, any Subordinated Indebtedness;
(v) incur, create or assume any guarantee of Indebtedness of
any Affiliate of the New Obligor (other than with respect to (A)
guarantees of Indebtedness of any Wholly Owned Restricted Subsidiaries
of the New Obligor by the New Obligor or by any Restricted Subsidiary
(other than by the Bank or any of its Subsidiaries), (B) guarantees of
Indebtedness of the Bank or any of its Subsidiaries by another
Subsidiary of the Bank or any guarantee by the Bank of Indebtedness of
any of its Subsidiaries, (C) guarantees of Indebtedness of the New
Obligor by any Restricted Subsidiary (other than the Bank and its
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Subsidiaries) or (D) guarantees of Indebtedness of the Bank or its
Subsidiaries by any Affiliate of the New Obligor); or
(vi) make any Investment in any Person
(each of the foregoing actions described in (but not excluded from) clauses
(i) through (vi), other than any such action that is a Permitted Payment
(as defined below), is referred to herein as a "Restricted Payment"),
provided that such Restricted Payments may be made by the New Obligor or
any Restricted Subsidiary (other than the Bank and its Subsidiaries) if,
after giving effect to the proposed Restricted Payment (the amount of any
such Restricted Payment, if other than cash, as determined in good faith by
the Board of Directors of the New Obligor, whose determination shall be
conclusive and evidenced by a Board Resolution), (1) no Default or Event of
Default shall have occurred and be continuing and (2) the aggregate amount
of all such Restricted Payments declared or made after the date of the
Indenture shall not exceed the sum (without duplication) of:
(A) 50% of the aggregate Consolidated Net Income (Loss) of the
New Obligor accrued on a cumulative basis during the period beginning
on the Substitution Date and ending on the last day of the New
Obligor's last fiscal quarter ending prior to the Interest Payment
Date immediately preceding the date of such proposed Restricted
Payment (or, if such Consolidated Net Income (Loss) shall be a loss,
minus 100% of such loss);
(B) the aggregate net cash proceeds received after the
Substitution Date by the New Obligor from the issuance or sale (other
than to any of its Subsidiaries) of shares of Qualified Capital Stock
of the New Obligor or warrants, options or rights to purchase shares
of such Qualified Capital Stock of the New Obligor;
(C) the aggregate net cash proceeds received after the
Substitution Date by the New Obligor as capital contributions;
(D) the aggregate net cash proceeds received after the
Substitution Date by the New Obligor (other than from any of its
Subsidiaries) upon the exercise of options, warrants or rights to
purchase shares of Qualified Capital Stock of the New Obligor;
(E) the aggregate net cash proceeds received after the
Substitution Date by the New Obligor from the issuance or sale (other
than to any of its Subsidiaries) of debt securities that have been
converted into or exchanged for Qualified Capital Stock of the New
Obligor, together with the aggregate net
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cash proceeds received by the New Obligor at the time of such
conversion or exchange; and
(F) the sum of (i) the Available Amount on the Substitution
Date, if any, and (ii) $7,500,000;
provided that the provisions of paragraph (a) will not restrict the payment
of any dividend within 60 days after the date of declaration thereof if, at
such date of declaration, such declaration and payment were permitted by
the provisions of paragraph (a).
(b) Notwithstanding paragraph (a) above, the New Obligor and its
Restricted Subsidiaries may take the following actions (each a "Permitted
Payment") so long as (other than with respect to (1) clause (v) below to
the extent such exchange is required by the OTS and (2) clause (viii) below
with respect to the Investment of funds by the Bank and its Subsidiaries in
the normal course of business) no Default or Event of Default shall have
occurred and be continuing:
(i) the purchase, redemption or other acquisition or
retirement for value of any shares of Capital Stock of the New
Obligor, in exchange for, or out of the net cash proceeds of, a
substantially concurrent issuance and sale (other than to any of its
Subsidiaries) of shares of Qualified Capital Stock of the New Obligor;
(ii) (A) the repurchase, redemption, defeasance or other
acquisition or retirement for value by the Bank of the 13% Preferred
Stock or the Series B Preferred Stock, in exchange for, or out of the
net cash proceeds of, a substantially concurrent issuance and sale
(other than to a Subsidiary of the New Obligor) of, shares of
Qualified Capital Stock of the Bank or out of the net cash proceeds of
a substantially concurrent incurrence (other than to a Subsidiary of
the New Obligor) of new Indebtedness of the Bank which has no Stated
Maturity of principal (or any required repurchase, redemption,
defeasance or sinking fund payments, other than as a result of a
change of control provision similar to the Securities) on or prior to
the final Stated Maturity of principal of the Securities or (B) the
acquisition by an Affiliate of the Bank of the 13% Preferred Stock or
the Series B Preferred Stock (and the contribution thereof to the Bank
for retirement and cancellation) with the proceeds of a cash
distribution from the Bank out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a Subsidiary
of the New Obligor) of shares of Qualified Capital Stock of the Bank
or out of the net cash proceeds of a substantially concurrent
incurrence (other than to a Subsidiary of the New Obligor) of new
Indebtedness of the Bank which has no Stated Maturity of principal (or
any required repurchase, redemption, defeasance or sinking fund
payments, other than as a
135
result of a change of control provision similar to the Securities) on
or prior to the final Stated Maturity of principal of the Securities;
provided that, after giving effect to such issuance and sale or such
incurrence and repurchase, redemption, defeasance or other acquisition
or retirement, or such acquisition and contribution and distribution,
the Bank has (i) a leverage (core) capital ratio equal to or in excess
of 5.5%, (ii) a tier 1 risk-based capital ratio equal to or in excess
of 6.5% and (iii) a total risk-based capital ratio equal to or in
excess of 11%, as such ratios are calculated in accordance with 12
C.F.R. Section 567 or any successor law or regulation;
(iii) the repurchase, redemption, defeasance or other
acquisition or retirement for value by the Bank or any of its
Subsidiaries of Preferred Stock of the Bank or its Subsidiaries (other
than the 13% Preferred Stock and the Series B Preferred Stock);
provided that, after giving effect to such repurchase, redemption,
defeasance or other acquisition or retirement, the Bank has (i) a
leverage (core) capital ratio equal to or in excess of 5.5%, (ii) a
tier 1 risk-based capital ratio equal to or in excess of 6.5% and
(iii) a total risk-based capital ratio equal to or in excess of 11%,
as such ratios are calculated in accordance with 12 C.F.R. Section 567
or any successor law or regulation;
(iv) the redemption by the Bank of any of the PIK Preferred
Stock;
(v) the exchange of the CCPCC Preferred Stock for the Series B
Preferred Stock;
(vi) the purchase, redemption, defeasance or other acquisition
or retirement for value of any Subordinated Indebtedness (other than
Redeemable Capital Stock) in exchange for or out of the net cash
proceeds of a substantially concurrent issuance and sale (other than
to a Subsidiary of the New Obligor) of shares of Qualified Capital
Stock of the New Obligor;
(vii) the repurchase of any Subordinated Indebtedness at a
purchase price not greater than 101% of the principal amount of such
Subordinated Indebtedness in the event of a Change of Control pursuant
to a provision similar to Section 1021; provided that prior to such
repurchase the New Obligor has made the Change of Control Offer as
provided in Section 1021 with respect to the Securities and has
repurchased all Securities validly tendered for payment in connection
with such Change of Control Offer;
(viii) Permitted Investments;
(ix) the transfer or distribution to the New Obligor or a
Wholly Owned Restricted Subsidiary of the New Obligor (other than the
Bank and its
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Subsidiaries) of all of the Capital Stock of one and only one
Subsidiary of the Bank (such Subsidiary or, in the event such
Subsidiary is merged with and into such Wholly Owned Restricted
Subsidiary, such Wholly Owned Restricted Subsidiary, is referred to as
the "Pledged Subsidiary"); provided that (1) the Fair Market Value of
the equity of the Pledged Subsidiary is not in excess of 5% of the sum
of (A) the Fair Market Value of the equity of such Subsidiary and (B)
the Fair Market Value of the Qualified Capital Stock of the Bank owned
by the New Obligor at the time of such transfer, (2) at the time of
such distribution the Trustee receives a first priority lien on and
security interest in the Capital Stock of the Pledged Subsidiary to
secure the payment of the Secured Obligations, (3) any Indebtedness
incurred in connection with, or in contemplation of such transfer or
distribution will not exceed the greater of (x) $10,000,000 or (y) 80%
of the Fair Market Value of the equity of the Pledged Subsidiary, (4)
the New Obligor will not, and will not permit the Pledged Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist
any kind of Lien on or with respect to the property or assets of such
Pledged Subsidiary or any income, profits or proceeds therefrom other
than a Lien in favor of the Bank or a Lien with respect to
Indebtedness incurred pursuant to clauses (d) and (j) of the
definition of Permitted Indebtedness (which Liens will be permitted
notwithstanding Section 1015), (5) the Pledged Subsidiary will not
have at the time of such transfer or thereafter any Subsidiaries, and
(6) the Pledged Subsidiary will not make loans to or Investments in
any Affiliate of the New Obligor (other than the Bank and except as
otherwise permitted by clause (a)(ii) of Section 1014) or make any
distributions on or with respect to, or redeem, its Capital Stock;
provided that the merger permitted by this clause (ix) will not be a
change in Collateral requiring amendment or consent under this
Indenture so long as the Consolidated Net Worth of the resulting
entity is not less than that of the Subsidiary distributed by the
Bank;
(x) the purchase, redemption or other acquisition or
retirement for value, directly or indirectly, of any shares of
Qualified Capital Stock of the Bank (other than Preferred Stock) by
the Bank;
(xi) the making of a Current Interest Loan pursuant to clause
(f) of the definition of Permitted Indebtedness and the repayment of
any such Current Interest Loan so long as at the time of such
repayment (a) the New Obligor has paid the interest on the Securities
for the two consecutive Interest Payment Dates immediately preceding
such repayment and (b) during such period the New Obligor has incurred
no additional Indebtedness pursuant to clause (f) of the definition of
Permitted Indebtedness; provided that until such time as all Current
Interest Loans have been repaid, the New Obligor will not be permitted
to make any Restricted Payment in cash pursuant to clause (a)(i) of
this Section
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1011; provided further that repayments of Current Interest Loans may
only be made pursuant to the conditions in this clause (b)(xi);
(xii) the making and repayment of any loan from the Pledged
Subsidiary pursuant to clause (k) of the definition of "Permitted
Indebtedness"; and
(xiii) the repurchase, redemption or other acquisition or
retirement for value of Subordinated Indebtedness (other than
Redeemable Capital Stock), in exchange for, or out of the net cash
proceeds of a substantially concurrent issue and sale (other than to a
Subsidiary) of new Subordinated Indebtedness of the New Obligor (such
a transaction, a "refinancing"); provided that any such new
Indebtedness of the New Obligor (A) shall be in a principal amount
that does not exceed an amount equal to the sum of (1) 101% of an
amount equal to the principal amount so refinanced less any discount
from the face amount of the Indebtedness to be refinanced expected to
be deducted from the amount payable to the holders of such
Indebtedness in connection with such refinancing, (2) the amount of
any premium expected to be paid in connection with such refinancing
pursuant to the terms of the Subordinated Indebtedness refinanced or
the amount of any premium reasonably determined by the New Obligor as
necessary to accomplish such refinancing by means of a tender offer,
privately negotiated repurchase or otherwise and (3) the amount of
expenses of the New Obligor incurred in connection with such
refinancing; provided further that for purposes of this clause (A),
the principal amount of any Indebtedness shall be deemed to mean the
principal amount thereof or, if such Indebtedness provides for an
amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration thereof, such lesser amount as of
the date of determination; (B) (x) if such refinanced Subordinated
Indebtedness has an Average Life to Stated Maturity shorter than that
of the Securities or a final Stated Maturity earlier than the final
Stated Maturity of the Securities, such new Indebtedness shall have an
Average Life to Stated Maturity no shorter than the Average Life to
Stated Maturity of such refinanced Indebtedness and a final Stated
Maturity no earlier than the final Stated Maturity of such refinanced
Indebtedness or (y) in all other cases, each Stated Maturity of
principal (or any required repurchase, redemption or sinking fund
payments) of such new Indebtedness shall be on or after the final
Stated Maturity of principal of the Securities; and (C) is (x) made
expressly subordinate to the Securities to substantially the same
extent as the Subordinated Indebtedness being refinanced or (y)
expressly subordinated to such refinanced Subordinated Indebtedness.
The actions described in clauses (i), (vi) and (vii) of this paragraph (b)
shall be Restricted Payments that shall be permitted to be taken in
accordance with this paragraph (b) but shall reduce the amount that would
otherwise be available for
138
Restricted Payments under clause (2) of paragraph (a) above to the extent,
in the case of clauses (i) and (vi), the New Obligor receives net cash
proceeds and applies them as described in such clauses (i) and (vi), and
the actions described in clauses (ii), (iii), (iv), (v), (viii), (ix), (x),
(xi), (xii) and (xiii) of this paragraph (b) shall be Restricted Payments
that shall be permitted to be taken in accordance with this paragraph and
shall not reduce the amount that would otherwise be available for
Restricted Payments under clause (2) of paragraph (a).
Section 1012. Limitation on Issuances and Sales of Capital Stock of
-----------------------------------------------------
Restricted Subsidiaries. The New Obligor (i) will not permit any of its
-----------------------
Restricted Subsidiaries (other than the Bank and its Subsidiaries) to issue
any Capital Stock (other than to the New Obligor or a Wholly Owned
Restricted Subsidiary of the New Obligor) and (ii) other than with respect
to Capital Stock of the Bank and its Subsidiaries, will not permit any
Person (other than the New Obligor or a Wholly Owned Restricted Subsidiary)
to own any Capital Stock of any of its Restricted Subsidiaries; provided,
however, that this covenant shall not prohibit (A) the issuance and sale of
all, but not less than all, of the issued and outstanding Capital Stock of
any Restricted Subsidiary owned by the New Obligor or any of its Restricted
Subsidiaries in compliance with the other provisions of the Indenture or
(B) the ownership by directors of director's qualifying shares or the
ownership by foreign nationals of Capital Stock of any Restricted
Subsidiary, to the extent mandated by applicable law; provided further,
however, that the Bank will not, and will not permit any Subsidiary of the
Bank to, create any class of common stock if such class of common stock
provides for, or entitles any holder thereof to, the payment of dividends
or distributions of any kind on any basis other than on a pro rata basis,
consistent with the ownership interests of all the holders of the common
stock of the Bank or of such Subsidiary, as the case may be, to the holders
of all classes of common stock of the Bank or such Subsidiary, as the case
may be.
Section 1014. Limitation on Transactions with Affiliates. (a) The
------------------------------------------
New Obligor will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with any
Affiliate of the New Obligor (except that the Bank and any of its
Subsidiaries may enter into any transaction or series of related
transactions with any Subsidiary of the Bank and the New Obligor and any
Wholly Owned Restricted Subsidiary of the New Obligor (other than the Bank
and its Subsidiaries) may enter into any transaction or series of related
transactions with any other Wholly Owned Restricted Subsidiary without
limitation under this covenant) unless (1) such transaction or series of
related transactions is in writing on terms that are no less favorable to
the New Obligor or such Restricted Subsidiary of the New Obligor, as the
case may be, than would be available in a comparable transaction in an
arm's-length dealing with a Person that is not such an Affiliate or, in the
absence of such a comparable transaction, on terms that in good faith would
be offered to a Person that is not an Affiliate, (2) with respect to any
transaction
139
or series of related transactions in which the New Obligor and its
Restricted Subsidiaries will receive or render value or incur obligations
or make aggregate payments in excess of $5,000,000, the New Obligor
delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (1)
above and such transaction or series of related transactions has been
approved by a majority of the Disinterested Directors of the Board of
Directors of the New Obligor and (3) with respect to any transaction or
series of related transactions in which the New Obligor and its Restricted
Subsidiaries will receive or render value or incur obligations or make
aggregate payments in excess of $20,000,000, or in the event no members of
the Board of Directors of the New Obligor are Disinterested Directors with
respect to any transaction or series of related transactions included in
clause (2), the New Obligor delivers to the Trustee a written opinion of a
nationally recognized expert with experience in appraising the terms and
conditions of the type of transaction or series of transactions for which
approval is required to the effect that the transaction or series of
transactions are fair to the New Obligor and such Restricted Subsidiary
from a financial point of view; provided, however, that this covenant will
not restrict (i) transactions entered into pursuant to any agreement in
effect on the Substitution Date and not made in contemplation of the
Substitution, (ii) residential mortgage, credit card and other consumer
loans to an Affiliate who is an officer, director or employee of the New
Obligor or any of its Subsidiaries, (iii) any transaction or series of
related transactions in which the total amount involved does not exceed
$100,000, (iv) payment of legal expenses incurred on behalf of the New
Obligor or its Subsidiaries; provided, however, that such expenses paid by
the Bank and its Subsidiaries for or on behalf of the New Obligor or any
other Restricted Subsidiary (other than a Subsidiary of the Bank) shall not
exceed $500,000 in any fiscal year, (v) transactions permitted under
Section 1011, (vi) checking or other deposit products and investment
management and advisory services and insurance products, in each case that
the Bank and its subsidiaries customarily offer to their respective
customers in the ordinary course of business, (vii) payments pursuant to
the Tax Sharing Agreement, (viii) payments by the New Obligor to the Bank
pursuant to the Capital Maintenance Agreement, and (ix) the contribution of
Cash Equivalents to the New Obligor or any Restricted Subsidiary (other
than the Bank and its Subsidiaries) in return for Qualified Capital Stock
of the New Obligor or such Restricted Subsidiary.
(b) If the Bank shall fail to comply with any of its Regulatory
Capital Requirements set forth in clauses (i) and (ii)(x) of the definition
thereof, then the New Obligor shall not and shall not permit any of its
Restricted Subsidiaries (other than the Bank or its Subsidiaries) to,
directly or indirectly, make any payments pursuant to clause (a)(iv) above,
any Restricted Payments otherwise permitted by clause (a)(2) of Section
1011, any Permitted Payments, other than actions permitted by clauses (iv),
(v) and (xiii) of paragraph (b) of Section 1011, or any Investments in any
Person (other than Permitted Investments permitted by clause (i), (ii),
(iv) or (vi) of the definition thereof) or otherwise engage in any activity
(including purchases, acquisition by lease
140
and other acquisitions of additional real property and buildings) other
than operating its then existing businesses in the ordinary course until
the Bank shall have complied with such Regulatory Capital Requirements.
Section 1016. Restriction on Transfer of Assets to Subsidiaries. The
-------------------------------------------------
New Obligor will not sell, convey, transfer or otherwise dispose of its
assets or property to any of its Subsidiaries except for sales,
conveyances, transfers or other dispositions of assets or property in an
amount permitted by Section 1011.
Section 1017. Limitation on Sale of Assets. The New Obligor will not,
----------------------------
and will not permit any of its Restricted Subsidiaries (other than the Bank
and its Subsidiaries) to, engage in any Asset Sale unless (i) the
consideration received by the New Obligor or such Restricted Subsidiary for
such Asset Sale is not less than the fair market value of the Capital Stock
or assets sold (as determined by the Board of Directors of the New Obligor,
whose determination shall be conclusive and evidenced by a Board
Resolution) and (ii) the consideration received by the New Obligor or the
relevant Restricted Subsidiary in respect of such Asset Sale consists of at
least 75% Cash Equivalents.
Section 1018. [Intentionally omitted]
Section 1019. Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries. The New Obligor will not, and will not
---------------------------------
permit any of its Restricted Subsidiaries (other than the Bank and its
Subsidiaries) to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any such Restricted Subsidiary to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock or any other interest or participation in, or measured by, its
profits, (b) pay any Indebtedness owed to the New Obligor or any other
Restricted Subsidiary, (c) make loans or advances to the New Obligor or any
other Restricted Subsidiary, (d) transfer any of its properties or assets
to the New Obligor or any Restricted Subsidiary or (e) guarantee any
Indebtedness of the New Obligor or any Restricted Subsidiary, except for
such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) customary non-assignment provisions of any lease
governing a leasehold interest or equipment of the New Obligor or any
Restricted Subsidiary, (iii) customary due on sale and other restrictions
on transfer contained in mortgages and deeds of trust, (iv) the Indenture
and (v) any Indebtedness incurred by the Pledged Subsidiary pursuant to
clause (d) of the definition of "Permitted Indebtedness."
This Indenture may be signed 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 Indenture.
141
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
▇.▇. ▇▇▇▇ REAL ESTATE
INVESTMENT TRUST
By__________________________
Title:
Attest:_______________________
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By__________________________
Title:
EXHIBIT A
[FACE OF NOTE]
▇. ▇. ▇▇▇▇ REAL ESTATE INVESTMENT TRUST
9 3/4% [Series B]/*/ Senior Secured Note due 2008
CUSIP
No. ________ $
▇. ▇. ▇▇▇▇ REAL ESTATE INVESTMENT TRUST, an unincorporated business
trust existing and operating under a declaration of trust governed by the laws
of the State of Maryland (the "Trust," which term includes any successor under
the Indenture hereinafter referred to), for value received, promises to pay to
________________, or its registered assigns, the principal sum of _________
($__________), on April 1, 2008.
[Initial Interest Rate: 9 3/4% per annum.]/**/
[Interest Rate: 9 3/4% per annum.]/*/
Interest Payment Dates: October 1 and April 1, commencing
October 1,1998.
Regular Record Dates: September 15 and March 15 .
This Note is a nonrecourse obligation of the Trust, and the sole
recourse for collection of principal, premium, if any, and interest on this Note
will be against the Pledged Bank Stock and the other Collateral. The Trust's
obligations under this Note are not guaranteed directly or indirectly by the
Trust or any of its subsidiaries (including the Bank and its subsidiaries), and
the Trust shall not be liable in any respect (except to the extent of its
interest in the Pledged Bank Stock and the other Collateral) for the payment of
any obligation due under this Note.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
__________________________
/*/ Include only for Exchange Securities.
/**/ Include only for Exchange Securities.
A-2
IN WITNESS WHEREOF, the Trust has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: ▇. ▇. ▇▇▇▇ REAL ESTATE
INVESTMENT TRUST
By:_________________________________________
Title:
Attest:________________________________
Title:
A-3
(Form of Trustee's Certificate of Authentication)
CERTIFICATE OF AUTHENTICATION
This is one of the 9 3/4% [Series B]/*/ Senior Secured Notes due 2008 described
in the within-mentioned Indenture.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
as Trustee
By:________________________
Authorized Signatory
___________________
/*/ Include only for Exchange Securities.
A-4
[REVERSE SIDE OF NOTE]
▇. ▇. ▇▇▇▇ REAL ESTATE INVESTMENT TRUST
9 3/4% [Series B]/*/ Senior Secured Note due 2008
1. Principal and Interest.
----------------------
The Trust will pay the principal of this Note on April 1, 2008.
The Trust promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at the rate of 9 3/4%
per annum (subject to adjustment as provided below) [except that interest
accrued on this Note (or the predecessor Note hereto) pursuant to the
penultimate paragraph of this Section 1 for periods prior to the applicable
Exchange Date (as such term is defined in the Registration Rights Agreement)
will accrue at the rate or rates borne by the predecessor Note hereto from time
to time during such periods pursuant to the Registration Rights Agreement as set
forth below]./*/
Interest will be payable semiannually on each Interest Payment Date,
commencing October 1, 1998, to the holders of record of the Notes or any
predecessor Notes at the close of business on the September 15 or March 15
immediately preceding the Interest Payment Date.
[The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated as of March 25, 1998, between the Trust and
the Initial Purchasers party thereto (the "Registration Rights Agreement"). In
the event that (i) the Exchange Offer Registration Statement is not filed with
the Commission on or prior to the 45th calendar day following the date hereof,
(ii) the Exchange Offer Registration Statement is not declared effective on or
prior to the 150th day following the date hereof, or (iii) the Exchange Offer is
not consummated prior to the 180th day following the date hereof or a Shelf
Registration Statement with respect to the Registrable Notes is not declared
effective on or prior to the 180th day following the date hereof, the interest
rate borne by the Notes shall be increased by one-half of one percent per annum
following such 45-day period in the case of clause (i) above, following such
150-day period in the case of clause (ii) above or following such 180-day period
in the case of clause (iii) above, which rate will be increased by an additional
one-half of one percent per annum for each 30-day period that any additional
interest continues to accrue, provided that the aggregate increase in such
interest rate will in no event exceed one percent per annum. Upon (x) the
filing of the Exchange Offer Registration Statement after the
_________________________
/*/ Include only for Exchange Securities.
A-5
45-day period described in clause (i) above, (y) the effectiveness of the
Exchange Offer Registration Statement after the 150-day period described in
clause (ii) above or, (z) consummation of the Exchange Offer, or the
effectiveness of the Shelf Registration Statement, as the case may be, after the
180-day, period described in clause (iii) above, the interest rate borne by the
Notes from the date of such filing, effectiveness or consummation, as the case
may be, will be reduced to the original interest rate if the Trust is otherwise
in compliance with this paragraph; provided, however, that, if after any such
reduction in interest rate, a different event specified in clauses (i), (ii) or
(iii) above occurs, the interest rate will again be increased and thereafter
reduced pursuant to the foregoing conditions. If the Trust issues a notice that
the Shelf Registration Statement is unusable pending the announcement of a
material corporate transaction, or such a notice is required under applicable
securities laws to be issued by the Trust, and the aggregate number of days in
any consecutive twelve-month period for which all such notices are issued or
required to be issued exceeds 30 days per occurrence or more than 90 days in the
aggregate in a calendar year, then the interest rate borne by the Notes will be
increased by one-half of one percent per annum following the date that such
Shelf Registration Statement ceases to be usable beyond the period permitted
above, which rate shall be increased by an additional one-half of one percent
per annum for each subsequent 30-day period that such additional interest
continues to accrue; provided that the aggregate increase in such annual
interest rate may in no event exceed one percent per annum. Upon the Trust
declaring that the Shelf Registration Statement is usable after the interest
rate has been increased pursuant to the preceding sentence, the interest rate
borne by the Notes will be reduced to the original interest rate if the Trust is
otherwise in compliance with this paragraph; provided, however, that if after
any such reduction in interest rate a different event of the kind described in
the preceding event occurs, the interest rate will again be increased and
thereafter reduced pursuant to the foregoing conditions.]/*/
If certain Defaults specified in the Indenture, occurs and are
continuing, or an Event of Default occurs and is continuing, the interest rate
borne by the Notes will be increased by 2% per annum until such Default or Event
of Default, as the case may be, is cured or waived. Such interest will accrue
from the date of such Default or Event of Default, as the case may be, and will
be payable after the time the Trust has knowledge of such Default or Event of
Default. If not paid on any Interest Payment Date, the Trust may elect to make
payment of any such interest to the Persons in whose names the Note (or
predecessor Note) is registered at the close of business on a Special Record
Date or in any other lawful manner not inconsistent with the requirements of any
Securities exchange on which the notes are listed.
Interest on this Note will accrue from the most recent date to which
interest has been paid [on this Note or the Note surrendered in exchange
therefor]/**/ or, if no interest has
______________________
/*/ Include only for Initial Securities.
/**/ Include only for Initial Securities.
A-6
been paid, from March 25, 1998; provided that, if there is no existing default
--------
in the payment of interest and if this Note is authenticated between a Regular
Record Date referred to on the face hereof and the next succeeding Interest
Payment Date, interest shall accrue from such Interest Payment Date. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
The Trust will pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum equal to the rate of interest applicable to the Notes.
2. Substitution of Obligor on the Notes
------------------------------------
The Indenture provides that, subject to certain conditions, the Trust
may elect to transfer the obligations under the Notes and the Indenture,
together with the ownership of the Pledged Bank Stock and the other Collateral,
to the New Obligor (as defined in the Indenture). Thereafter, the Note will be
a nonrecourse obligation of the New Obligor, and the sole recourse for
collection of principal, premium, if any, and interest on this Note will be
against the Pledged Bank Stock and the other Collateral. The New Obligor's
obligations under this Note will not be guaranteed directly or indirectly by the
New Obligor or any of its subsidiaries (including the Bank and its
subsidiaries), and the New Obligor shall not be liable in any respect (except to
the extent of its interest in the Pledged Bank Stock and the other Collateral)
for the payment of any obligations under this Note.
3. Method of Payment.
-----------------
The Trust will pay interest (except Defaulted Interest and Additional
Interest) on the principal amount of the Notes on each October 1 and April 1 to
the persons who are Holders (as reflected in the Security Register at the close
of business on the September 15 or March 15 immediately preceding the Interest
Payment Date), in each case, even if the Note is canceled on registration of
transfer or registration of exchange after such record date. The Trust will pay
the principal of this Note to the Holder that surrenders this Note to any Paying
Agent on or after April 1, 2008.
The Trust will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private, debts. However, the Trust may pay principal, premium, if
any, and, except to the extent otherwise provided in the Indenture, interest by
its check payable in such money. The Trust will pay interest payable by check
by mailing such check to a Holder's registered address (as reflected in the
Security Register). If a payment date is a date other than a Business Day,
payment may be made on the next succeeding day that is a Business Day and,
subject to the provisions of the Indenture, no interest shall accrue for the
intervening period.
A-7
4. Paying Agent and Registrar.
--------------------------
Initially, the Trustee will act as authenticating agent, Paying Agent
and Securities Registrar. The Trust may change any authenticating agent, Paying
Agent or Securities Registrar upon written notice thereto. The Trust, any
Subsidiary or any Affiliate of any of them may act as Paying Agent, Securities
Registrar or co-registrar.
5. Indenture; Limitations.
----------------------
The Trust issued the Notes under an Indenture, dated as of March 25,
1998 (the "Indenture"), between the Trust and Norwest Bank Minnesota, National
Association as trustee (the "Trustee"). Capitalized terms herein are used as
defined in the Indenture unless otherwise indicated. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act. The Notes are subject to all such terms,
and Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Note and the terms of the
Indenture, the terms of the Indenture shall control.
The Notes are secured general obligations of the Trust, secured by the
Collateral. The Indenture limits the aggregate principal amount of the Notes to
$200,000,000.
6. Redemption.
----------
The Notes may be redeemed at the option of the Trust, as a whole or
from time to time in part, at any time on or from time to time on or after April
1, 2003 at the following Redemption Prices (expressed in percentages of
principal amount), plus accrued and unpaid interest, if any, to but excluding
the Redemption Date (subject to the right of Holders of record on the relevant
Regular Record Date to receive interest due on the applicable Interest Payment
Date), if redeemed during the 12-month period beginning April 1 of each of the
years set forth below:
Redemption
Year Price
---- ------
2003........................................ 104.875%
2004........................................ 103.250%
2005........................................ 101.625%
2006 and thereafter......................... 100.000%
Notice of a redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Notes to be redeemed
at such Holder's last address as it appears in the Security Register. Notes in
original denominations larger than
A-8
$1,000 may be redeemed in part in integral multiples of $1,000. On and after the
Redemption Date, interest ceases to accrue on Notes or portions of Notes called
for redemption, unless the Trust defaults in the payment of the Redemption
Price.
In addition to the optional redemption of the Notes in accordance with
the provisions of the preceding paragraph, at any time prior to April 1, 2003,
the Notes will be redeemable at the option of the Trust, in whole or in part, on
not less than 30 nor more than 60 days' prior written notice to each holder of
Notes to be redeemed, at a redemption price equal to the sum of (x) the
principal amount thereof, plus (y) accrued and unpaid interest, if any, to the
applicable date of redemption, plus (z) the Applicable Premium.
7. Repurchase upon a Change in Control.
-----------------------------------
Upon the occurrence of a Change in Control, the Trust shall be
obligated to make an offer to repurchase such Holder's Notes, in whole or in
part, in integral multiples of $1,000, at a purchase price in cash in an amount
equal to 101% of the principal amount thereof, plus accrued interest (if any) to
the date of purchase (the "Change in Control Payment").
A notice of each Change in Control will be mailed within 30 days after
such Change in Control occurs to each Holder at his last address as it appears
in the Security Register. Notes in original denominations larger than $1,000
may be sold to the Trust in part. On and after the Change in Control Purchase
Date, interest ceases to accrue on Notes or portions of Notes surrendered for
purchase by the Trust, unless the Trust defaults in the payment of the Change in
Control Payment.
8. Denominations; Transfer; Exchange.
---------------------------------
The Notes are in registered form without coupons, in denominations of
$1,000 and multiples of $1,000 in excess thereof. A Holder may register the
transfer or exchange of Notes in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not register the transfer or
exchange of any Notes selected for redemption (except the unredeemed portion of
any Note being redeemed in part). Also, it need not register the transfer or
exchange of any Notes for a period of 15 days before a selection of Notes to be
redeemed is made.
9. Persons Deemed Owners.
---------------------
A Holder may be treated as the owner of a Note for all purposes.
10. Unclaimed Money.
---------------
A-9
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to the Trust. After that, Holders entitled to the money must look to
the Trust for payment, unless an abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
11. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of greater than 50% in
aggregate principal amount of the Notes then outstanding, and any existing
default or compliance with any provision may be waived with the consent of the
Holders of greater than 50% in aggregate principal amount of the Notes then
outstanding. Without notice to or the consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity or inconsistency provided such change does not
adversely affect in any material respect the interests of the Holders of the
Notes.
12. Restrictive Covenants.
---------------------
The Indenture contains certain covenants, including but not limited
to, covenants with respect to the following matters: (i) limitation on
indebtedness; (ii) limitation on restricted payments; (iii) limitation on
transactions with affiliates; (iv) limitation on asset sales; (v) restriction on
transfer of assets to subsidiaries; (vi) limitation on Restricted Subsidiaries;
(vii) limitation on dividend and other payment restrictions affecting Restricted
Subsidiaries; (viii) limitation on issuances and sales of Restricted Subsidiary
stock; (ix) required ownership of Bank common stock; (x) limitation on disposal
of, or liens on, the Collateral; (xi) restriction on use of proceeds to purchase
securities; (xii) change of control; and (xiii) restrictions on merger,
consolidation and sale of assets of the Trust. At the end of each fiscal
quarter, the Trust must report to the Trustee on compliance with such covenants.
13. Successor Persons.
-----------------
When a successor Person assumes all the obligations of its predecessor
under the Notes and the Indenture in accordance with the Indenture (including,
but not limited to, the New Obligor), the predecessor Person will be released
from those obligations.
A-10
14. Defaults and Remedies.
---------------------
If an Event of Default shall occur and be continuing, the principal of
all the Notes may be declared due and payable in the manner and with the effect
provided in the Indenture.
15. Security.
--------
This Note is secured by a security interest in certain Collateral, as
provided in the Indenture, and is entitled to the benefits thereof.
16. Trustee Dealings with Trust.
---------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Notes and may make loans to, accept
deposits from, perform services for, and otherwise deal with, the Trust and its
Affiliates as if it were not the Trustee.
17. Authentication.
--------------
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
18. Abbreviations.
-------------
Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).
19. Defeasance.
----------
The Indenture contains provisions for defeasance, at any time, of the
Indebtedness represented by this Note or the covenants governing the
Indebtedness represented by this Note, upon compliance by the Trust with certain
conditions set forth in the Indenture.
20. Copy of Indenture.
------------------
The Trust will furnish a copy of the Indenture to any Holder upon
written request and without charge. Requests may be made to ▇. ▇. ▇▇▇▇ Real
Estate Investment Trust, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secretary.
21. No Personal Liability.
---------------------
A-11
The covenants and obligations set forth in this Note and in the
Indenture as having been made by the Trust have been made or assumed by the
trustees or officers of the Trust acting as such trustees or officers pursuant
to the authority vested in them under the Declaration of Trust under which the
Trust is governed. This Note and the Indenture have been executed by trustees
or officers of the Trust in their capacities as trustees or officers under such
Declaration of Trust, and not individually, and, in accordance with the
provisions of the Declaration of Trust, the covenants and obligations of the
Trust or the trustees of the Trust hereunder and under the Indenture are not
personally binding upon, nor shall resort be had to the private property of, any
of the trustees or shareholders, officers, employees or agents of the Trust, but
the property of the Trust only shall be bound.
No recourse shall be had for the payment of the principal of or the
interest on this Note, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture supplemental
thereto, personally, against any organizer of the Trust, holder of shares of
beneficial interest of the Trust, officer or trustee, past, present or future,
as such, of the Trust or of any predecessor or successor of the Trust whether by
virtue of any constitution, statute or rule of law or equity, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
22. Defined Terms.
-------------
Capitalized terms not otherwise defined in this Note shall have the
meaning ascribed to them in the Indenture.
A-12
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
----------------------------------
___________________________________________
___________________________________________
(Please print or typewrite name and address including zip code of assignee)
___________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
___________________________________________
its attorney to transfer such Note on the books of the Trust with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT OFFSHORE PHYSICAL
CERTIFICATES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of the (i) date of an effective Registration Statement
or (ii) three years after the later of the original issuance of this Note or the
last date on which this Note was held by a Affiliate of the Trust, the
undersigned confirms that without utilizing any general solicitation or general
advertising:
[Check One]
---------
[_] (a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by
Rule 144A thereunder,
or
--
A-13
[_] (b) this Note is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this Note in the name of any Person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Date:___________
__________________________________________
NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the within-mentioned instrument in
every particular, without alteration or any
change whatsoever.
Signature Guarantee/*/:____________________________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it or such account is a "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act of 1933, as
amended, and that each is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Trust as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that each is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:______________ _______________________________________
NOTICE: To be executed by an
executive officer
____________________________
/*/ Guarantor must be a member of the Securities Transfer Agents Medallion
Program ("STAMP"), the New York Stock Exchange Medallion Signature Program
("MSP") or the Stock Exchange Medallion Program ("SEMP").
A-14
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Trust pursuant to
Section 1021 of the Indenture, check the Box: [_].
If you wish to have a portion of this Note purchased by the Trust
pursuant to Section 1021 of the Indenture, state the amount (in original
principal amount) below:
$__________.
Date:______________
Your Signature:______________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee/*/:___________________________________________________
____________________________
/*/ Guarantor must be a member of the Securities Transfer Agents Medallion
Program ("STAMP"), the New York Stock Exchange Medallion Signature Program
("MSP") or the Stock Exchange Medallion Program ("SEMP").
EXHIBIT B
---------
Form of Certificate
to Be Delivered upon
Termination of Restricted Period
--------------------------------
On or after May 4, 1998
Norwest Bank Minnesota,
National Association, as Trustee
Norwest Center
Sixth Street and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: ▇. ▇. ▇▇▇▇ Real Estate Investment Trust (the "Trust") 9
3/4%[Series B]/*/ Senior Secured Notes due 2008 (the
------------------------------------------------------
"Securities")
------------
Ladies and Gentlemen:
This letter relates to $____________________ principal amount of
Securities represented by the global note certificate (the "Offshore Global
Security"). Pursuant to Section 201 of the Indenture dated as of March 25, 1998
relating to the Securities (the "Indenture"), we hereby certify that (1) we are
the beneficial owner of such principal amount of Securities represented by the
Offshore Global Security and (2) we are a Non-U.S. Person to whom the Securities
could be transferred in accordance with Rule 904 of Regulation S promulgated
under the U.S. Securities Act of 1933, as amended ("Regulation S").
Accordingly, you are hereby requested to issue a Offshore Physical Security
representing the undersigned's interest in the principal amount of Securities
represented by the Offshore Global Security, all in the manner provided by the
Indenture.
You and the Trust are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:____________________________________
Authorized Signature
______________________
/*/ Include only for Exchange Securities
EXHIBIT C
---------
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
-------------------------------------------------------
[Date]
▇. ▇. ▇▇▇▇ Real Estate Investment Trust
c/o Norwest Bank Minnesota, N.A., as Trustee
Corporate Trust Services
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: ▇. ▇. ▇▇▇▇ Real Estate Investment Trust (the "Trust")
9 3/4% Senior Secured Notes due 2008 (the "Securities")
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of $
aggregate principal amount of the Securities, we confirm that:
1. We have received such information regarding the Trust and Chevy
Chase Bank, F.S.B. as we deem necessary in order to make our investment
decision.
2. We understand that the Securities have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") or any other
applicable law; and may not be offered, sold, or otherwise transferred
except as permitted in the following sentence. We agree on our own behalf
and on behalf of any investor account for which we are purchasing the
Securities to offer, sell or otherwise transfer such Securities prior to
the date which is two years after the later of the date of original issue
and the last date on which the Trust or any affiliate of the Trust was the
owner of such Securities, or any predecessor thereto (the "Resale
Restriction Termination Date") only (a) to the Trust, (b) pursuant to a
registration statement which has been declared effective under the
Securities Act, (c) for so long as the Securities are eligible for resale
pursuant to Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom
notice is given that the transfer is being made in reliance on Rule 144A,
(d) pursuant to offers and sales to non-U.S.
C-2
persons that occur outside the United States within the meaning of
Regulations S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of
Rule 501 of Regulation D under the Securities Act with total assets in
excess of $5,000,000 that is acquiring the Securities for its own account
or for the account of such an institutional "accredited investor" for
investment purposes and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities
Act or (f) pursuant to any other available exemption from the registration
requirements of the Securities Act, subject in each of the foregoing cases
to any requirement of law that the disposition of our property and the
property of such investor account or accounts be at all times within our or
their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the
Resale Restriction Termination Date. If any resale or other transfer of the
Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter
to the Trustee (the "Trustee") under the Indenture pursuant to which the
Notes are being issued a letter from the transferee substantially in the
form of this letter, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act
with total assets in excess of $5,000,000 and that it is acquiring such
Securities for investment purposes and not for distribution in violation of
the Securities Act. We acknowledge that the Trust and the Trustee reserve
the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clauses (d), (e)
and (f) above to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Trust and the
Trustee.
3. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) with
total assets in excess of $5,000,000 purchasing for our own account or for
the account of such an institutional "accredited investor," and we are
acquiring the Securities 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, and we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment.
4. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
5. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party
in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
C-3
Very truly yours,
By: (NAME OF PURCHASER)
Date:
Upon transfer, the Securities should be registered in the name of the
new beneficial owner as follows:
Name:________________________
Address:_____________________
Taxpayer ID Number:__________
EXHIBIT D
---------
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
------------------------
[Date]
Norwest Bank Minnesota,
National Association, as Trustee
Norwest Center
Sixth Street and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: ▇. ▇. ▇▇▇▇ Real Estate Investment Trust (the "Trust")
9 3/4% Senior Secured Notes due 2008 (the "Securities")
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____ aggregate principal amount of
Securities, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S ("Regulation S") under the Securities Act of 1933,
as amended (the "Securities Act"), and accordingly, we hereby certify as
follows:
1. The offer of the Notes was not made to a person in the United
States (unless such person or the account held by it for which it is acting
is excluded from the definition of "U.S. person" pursuant to Rule 902(o) of
Regulation S under the circumstances described in Rule 902(i)(3) of
Regulation S) or specifically targeted at an identifiable group of U.S.
citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer was
outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market, and neither we nor any person acting on our
behalf knows that the transaction was pre-arranged with a buyer in the
United States.
D-2
3. Neither we, any of our affiliates, nor any person acting on our or
their behalf has made any directed selling efforts in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable.
4. The proposed transfer of Notes is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
5. If we are a dealer or a person receiving a selling concession or
other fee or remuneration in respect of the Notes, and the proposed
transfer takes place before the Offshore Note Exchange Date referred to in
the Indenture, dated as of March 25 1998, among the Trust and the Trustee,
or we are an officer or director of the Trust or a distributor, we certify
that the proposed transfer is being made in accordance with the provisions
of Rules 903 and 904(c) of Regulation S.
You and the Trust are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:_________________________________
Authorized Signature
EXHIBIT E
---------
Rule 144A Certificate
To: Norwest Bank Minnesota,
National Association, as Trustee
Norwest Center
Sixth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0069
Attention: Corporate Trust Division
Re: ▇.▇. ▇▇▇▇ Real Estate Investment Trust (the "Trust")
9 3/4% Senior Subordinated Notes due 2008 (the "Notes")
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $____ aggregate principal
amount of Notes, we confirm that such sale has been effected pursuant to and in
accordance with Rule 144A ("Rule 144A") under the Securities Act of 1933, as
amended (the "Securities Act"). We are aware that the transfer of Notes to us
is being made in reliance on the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A. If the Trust is not subject to
Section 13 or 15(d) of the Exchange Act, prior to the date of this Certificate
we have been given the opportunity to obtain from the Trust the information
referred to in Rule 144A(d)(4), and have either declined such opportunity or
have received such information.
You and the Trust are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: __________ __, 199_
EXHIBIT F
---------
SUBORDINATION AGREEMENT
AGREEMENT, dated as of _______ __, ____ between ▇.▇. ▇▇▇▇ REAL ESTATE
INVESTMENT TRUST, an unincorporated business trust existing and operating under
a declaration of trust governed by the laws of the State of Maryland (the
"Trust"), and ____________________, a _______________________________ (the
"Subsidiary")
RECITAL
A. The Trust has issued and may in the future issue its 9 3/4%
Senior Secured Notes due 2008 and 9 3/4% Series B Senior Secured Notes due 2008
pursuant to the Indenture (the "Indenture") dated as of March 25, 1998 between
the Trust and Norwest Bank Minnesota, National Association, as Trustee.
Capitalized terms used herein and not otherwise defined have the respective
meanings specified in the Indenture.
B. Indebtedness of the Trust to the Subsidiary at _____________, 1998
amounted in to $___________________ in aggregate principal amount (such
indebtedness in such principal amount being the "Initial Indebtedness"), which
such amount remains unchanged as of March 25, 1998 except with respect to such
changes as may be effected by the Tax Sharing Agreement.
C. The Subsidiary may, from time to time after _______________, 1998,
provide additional loans to the Trust (such loans, whether or not constituting a
refunding or refinancing of the Initial Indebtedness, being the "New Subsidiary
Loans").
D. It is a condition to permitting the New Subsidiary Loans under
certain covenants of the Indenture, and the Subsidiary and the Trust desire,
that all such loans from the Subsidiary to the Trust be, governed by and subject
to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises hereof, and for other
good and valuable consideration, the parties agree as follows:
Section 1. Subordination. (a) Definition of Senior Indebtedness.
------------- ---------------------------------
For purposes of this Agreement, "Senior Indebtedness" means all principal of and
premium, if any, and interest on (such interest, wherever referred to in this
Agreement, being deemed to include interest accruing after the filing of a
petition initiating any proceeding pursuant to any bankruptcy law in accordance
with and at the rate (including any applicable default rate, to the
F-2
extent lawful) specified in any document evidencing such Senior Indebtedness,
whether or not the claim for such interest is allowed as a claim after such
filing in any proceeding under such bankruptcy law) the Securities.
(b) Subordination of New Subsidiary Loans. The Trust and the
-------------------------------------
Subsidiary each covenants and agrees that, to the extent and in the manner
hereinafter set forth in this Section, the New Subsidiary Loans owing from time
to time by the Trust to the Subsidiary and the payment of the principal of and
premium, if any, and interest on the New Subsidiary Loans are hereby expressly
made subordinate and subject in right of payment to the prior payment in full,
in cash or cash equivalents, of the Senior Indebtedness.
This Agreement shall constitute a continuing offer to all persons who
become Holders, and such provisions are made for the benefit of the holders of
Senior Indebtedness, and the Holders are made obligees hereunder and any one or
more of them may enforce such provisions. Holders need not prove reliance on
the subordination provisions hereof.
(c) Payment Over of Proceeds Upon Dissolution, etc. In the event of
----------------------------------------------
(i) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to the Trust or to its creditors, as such, or to its assets,
or (ii) any liquidation, dissolution or other winding up of the Trust, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (iii) any assignment for the benefit of creditors or any other marshalling of
assets and liabilities of the Trust, then and in any such event:
(1) the holders of all Senior Indebtedness shall be entitled to
receive payment in full, in cash or cash equivalents, of all amounts due or
to become due on or in respect of all Senior Indebtedness, or provision
shall be made for such payment in cash or cash equivalents, before the
Subsidiary is entitled to receive any payment on account of principal of
(or premium, if any) or interest on the New Subsidiary Loans; and
(2) any payment or distribution of assets of the Trust of any kind or
character, whether in cash, property or securities, by set-off or
otherwise, to which the Subsidiary would be entitled but for the provisions
of this Agreement, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness
of the Trust being subordinated to the payment of the New Subsidiary Loans,
shall be paid by the liquidating trustee or agent or other person making
such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the Trustee, to the extent
necessary to make payment in full, in cash or cash equivalents, of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Subsidiary shall have received any such payment or
distribution of assets of the Trust of any kind or character, whether in
cash, property or securities, on account
F-3
of the New Subsidiary Loans, including any such payment or distribution
which may be payable or deliverable by reason of the payment of any other
indebtedness of the Trust being subordinated to the payment of the New
Subsidiary Loans, before all Senior Indebtedness is paid in full, in cash
or cash equivalents, then and in such event such payment or distribution
shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person
making payment or distribution of assets of the Trust for application to
the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, in cash or cash
equivalents, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness.
(d) No Payment When Specified Senior Indebtedness in Default. (1)
--------------------------------------------------------
(i) In the event of and during the continuation of any default in the payment of
principal of (or premium, if any) or interest on any Senior Indebtedness beyond
any applicable grace period with respect thereto, or (ii) in the event that any
other Event of Default with respect to any Senior Indebtedness shall have
occurred and be continuing and shall have resulted in such Senior Indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, then no payment shall be made by the
Trust on account of the principal of (or premium, if any) or interest on the New
Subsidiary Loans or on account of the purchase or redemption or other
acquisition of New Subsidiary Loans, unless and until such Event of Default
shall have been cured or waived or shall have ceased to exist or any
acceleration of the Senior Indebtedness shall have been rescinded or annulled or
the Holders or their agents shall have waived the benefits of this Section or
the Senior Indebtedness shall have been paid in full.
In the event that, notwithstanding the foregoing, the Trust shall make
any payment to the Subsidiary prohibited by the foregoing provisions of this
Section, then and in such event such payment shall be paid over and delivered
forthwith to the Trustee.
(e) Payment Permitted if No Default. Nothing contained in this
-------------------------------
Section shall prevent the Trust, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Trust referred to in Subsection (c) above or under the conditions described in
Subsection (d) above, from making payments at any time of principal of (and
premium, if any) or interest on the New Subsidiary Loans.
(f) Subrogation to Rights of Holders of Senior Indebtedness. Subject
-------------------------------------------------------
to the payment in full, in cash or cash equivalents, of all Senior Indebtedness,
the Subsidiary shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the New Subsidiary Loans shall be paid in full.
(g) Provisions Solely to Define Relative Rights. The provisions of
-------------------------------------------
this Section are and are intended solely for the purpose of defining the
relative rights of the
F-4
Subsidiary on the one hand and the holders of Senior Indebtedness on the other
hand. Nothing contained in this Article or elsewhere in this Agreement is
intended to or shall (1) impair, as among the Trust, its creditors other than
holders of Senior Indebtedness and the Subsidiary, the obligation of the Trust,
which is absolute and unconditional, to pay to the Subsidiary the principal of
(and premium, if any) and interest on the New Subsidiary Loans as and when the
same shall become due and payable in accordance with their terms; or (2) affect
the relative rights against the Trust of the Subsidiary and creditors of the
Trust other than the holders of Senior Indebtedness; or (3) prevent the
Subsidiary from exercising all remedies otherwise permitted by applicable law
upon default under the New Subsidiary Loans, subject to the rights, if any,
under this Section of the holders of Senior Indebtedness (i) in any case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshalling of assets and liabilities of the Trust
referred to in Subsection (c) above, to receive, pursuant to and in accordance
with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (ii) under the conditions
specified in Subsection (d), to prevent any payment prohibited by such
Subsection.
(h) No Waiver of Subordination Provisions. No right of any present or
-------------------------------------
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Trust or by any act or failure to act, in good
faith, by any such holder, or by any non-compliance by the Trust with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Subsidiary, without incurring
responsibility to the Subsidiary and without impairing or releasing the
subordination provided in this Section or the obligations hereunder of the
Subsidiary to the holders of Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection of Senior Indebtedness; and (4)
exercise or refrain from exercising any rights against the Trust and any other
Person.
(i) Notice to Subsidiary. The Trust shall give prompt written notice
--------------------
to the Subsidiary of any fact known to the Trust which would prohibit the making
of any payment to the Subsidiary in respect of the New Subsidiary Loans.
(j) Rescission. The provisions of this Section shall continue to be
----------
effective or be reinstated, as the case may be, if at any time any payment in
respect of any Senior Indebtedness is rescinded or must otherwise be returned by
the holder thereof upon the insolvency, bankruptcy or reorganization of the
Trust or otherwise, all as though such payment had not been made.
F-5
Section 2. Allocation of Repayments First to Initial Indebtedness.
------------------------------------------------------
All repayments of Indebtedness owing by the Trust to the Subsidiary shall be
applied first to the Initial Indebtedness and second to the New Subsidiary
Loans.
Section 3. Amendments, Etc. No amendment or waiver of any
----------------
provision of this Agreement, or consent to depart therefrom is permitted at any
time for any reason, except with the consent of the Holders of greater than 50%
in aggregate principal amount of the Outstanding Securities.
Section 4. Assignment. No party to this Agreement may assign, in
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whole or in part, any of its rights and obligations under this Agreement, except
to its legal successor-in-interest.
Section 5. Third Party Beneficiaries. The Trustee and the Holders
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shall be third party beneficiaries to this Agreement and shall have the right to
enforce this Agreement against the Trust and the Subsidiary.
Section 6. Headings. Section and Subsection headings in this
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Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 7. Entire Agreement. This Agreement sets forth the entire
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agreement of the parties with respect to its subject matter and supersedes all
previous understandings, written or oral, in respect thereof.
Section 8. Governing Law. This agreement shall be governed by and
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construed in accordance with the laws of the State of New York.
Section 9. Termination of Agreement. This Agreement shall
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terminate at such time as the Lien of the Indenture on the Collateral shall
terminate pursuant to Section 1212 of the Indenture or the Trust shall be
released from its obligations under the covenants contained in Section 1010 of
the Indenture upon the exercise of its option under Section 1301 thereof to
effectuate a covenant defeasance under Section 1303 thereof.
F-6
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
day and year first above stated.
▇.▇. ▇▇▇▇ REAL ESTATE INVESTMENT TRUST
By____________________________________
Title:
______________________________________
By____________________________________
Title: